Increasing Fraud In Digital Platforms Calls For Identity Verification Online

The digital world of today has made it incredibly easy to work remotely and handle payments online, but these luxuries come with the risk of fraud. It’s often tough to determine whether the person interacting through digital platforms is a legitimate person or a criminal.

Identity verification is an age-old process and the most basic security step to prevent fraud. But old ways of verifying identities are now out-dated. Especially when considering online platforms, businesses are encouraged to perform identity verification online.

Threats to Identity In Online Platforms

Fraudsters are using technology to their advantage in creating sophisticated ways to manipulate verification systems. For this reason, the simple verification just doesn’t work anymore.

Not only the customers of the business, but also the company itself faces adverse consequences when they unintentionally get involved in such crimes. A bank’s value also gets degraded when credit cards are used for fraudulent activities.

Banks and fintech companies are forced to pay compliance fines when large amounts of money from their customers’ accounts is stolen. The bank loses customers’ trust and it’s reputation is at stake. Regulatory authorities around the globe have encouraged businesses with digital platforms to perform identity verification online, and avoid identity fraud.

Synthetic Identity Theft

Synthetic identity is a name given to a type of fake identity where authentic information from someone else’s identity documents is mixed with fake information to get verified. Since part of synthetic identity documents are original information, they are often tough to detect. Fraudsters use this type of identity fraud to carry out unauthorized activities on digital platforms.

Credit Cards & Social Security

Credit card fraud is a common crime which happens due to customers’ negligence and the tactics of the criminals. Users are not vigilant when it comes to protecting their passwords and PINs for credit cards, and hence become victims of this type of fraud. Making a transaction is very easy for criminals that get their hands on someone’s credit card information, but it becomes a nightmare for the customer.

Similarly, the social security number is an important characteristic that must be protected. Fraudsters often manipulate systems to steal social security numbers and use them for benefits like registering businesses and avoiding taxes.
Online Identity Verification Services
Increased digitization of businesses has prompted them to perform identity verification online due to the increase in fraud cases. Crimes like money laundering and terrorist financing are bound to happen if there is no customer authentication system. Identity authentication services provide the solution to end the problem of identity fraud at the onboarding stage itself.

By performing identity verification online, businesses can improve the overall experience for their customers. Various technologies are used to verify every aspect of the customer, from their facial characteristics to their past transactions and other background information.

Identification using Biometrics

Identity verification process uses biometrics to ensure that only real customers get access to their accounts. Facial recognition captures details of the person’s face and analyzes the expressions and contours to verify their identity. Liveness detection technology helps to differentiate between a real person on video and spoofing tricks like deep fake or photoshop.

Knowledge-based Authentication

Knowledge-based authentication is an older technique of identity verification. This is a common process during account opening and taking business services.

KBA ensures that fraudsters don’t get access to customer accounts by involving questions like the name of the customers’ pet or the model of their first car. Only the real customer will know the answer to these questions, so the fraudsters are easily filtered out.

However, KBA cannot be completely trusted because criminals often get the answers to these simple questions in no time. Although it provides an extra layer of security, the technique itself isn’t that secure because the information required is quite basic.

As an improvement to knowledge-based authentication, incorporating identity verification online and including questions regarding the customers’ recent activity can make the system more effective. For example, asking them about their last transaction.

The online identity verification services don't end with just the face or the personalized questions. Their payments and transactions, and connections to political entities are also key characteristics that are monitored. This is because most money laundering cases involve the funds generated from political activities and this has made PEPs (politically exposed persons) a red flag.

Final Thoughts

To sum everything up, businesses must prevent their customers from becoming victims of identity theft and financial crime. To ensure safe dealing in an online environment it’s important to perform identity verification online.