Identity Verification and Online Validation: A Complete Guide

Key takeaways

 

1. Advanced Identity Verification: Identity verification using technologies like NFC and biometrics is crucial for ensuring user authenticity, providing an extra layer of security in online transactions.

2. Regulatory Compliance: Adhering to AML and eIDAS guidelines is not just a legal obligation but also boosts user trust by demonstrating the company's commitment to security and privacy.

3. Optimized User Experience: Identity verification systems like Didit allow users to undergo the verification process just once, enhancing usability and customer satisfaction across various services.

4. Machine Learning Technology: The implementation of Machine Learning continuously improves the effectiveness of identity verification systems, adapting to new threats and minimizing fraud risks.

What is identity verification? For some businesses and organizations, identity validation and verification is a crucial process that ensures the person undergoing this procedure is truly who they claim to be. For others, it's part of their KYC process (Know Your Customer).

Conducting this in person can be straightforward, but online, it's a different story. How is security ensured in this process when conducted over the internet?

In this post, we aim to answer these questions and more, exploring the best methods for online identity verification.

Steps Towards Identity Verification

But what do we mean by identification? It can be defined as the information individuals provide to undergo this validation process, along with other external characteristics that enhance analysis and additional checks by companies. We could refer to this stage where companies collect and store user information as identification.

Once this stage is complete, it's time to verify the user's identity, or in other words, ensure the information provided is legitimate and authentic. Advanced technologies like NFC and biometrics are employed to confirm individuals are who they claim to be.

Then comes authentication. This final stage makes the verified data useful and valid whenever the individual intends to use the service.

Is it possible to reuse an identification for authentication across different services?

Yes, it is. Advanced identity verification systems, like Didit, allow individuals to go through the process once and use it across various services. This way, these providers can offer a better user experience, with identity verification that can be completed with just a single click.

Why is IDV Important?

Identity verification is crucial in certain sectors to prove that a person intending to perform a specific action is, firstly, real, and secondly, who they claim to be. Additionally, it's a matter of regulation and compliance in industries like cryptocurrencies or gambling.

Scammers are relentless, exploiting any loophole to use fake IDs and bypass weaker KYC processes. The emergence of Dark Web sites creating AI-generated fake documentation highlights that some verification systems are outdated. Indeed, identity theft in neobanks has surged recently.

Regulations and Standards in Online Verification

AML (Anti-Money Laundering) and eIDAS (electronic IDentification, Authentication, and Trust Services) directives set the guidelines for online identity verification.

What do these regulatory frameworks entail? The first addresses the critical need to combat economic fraud, money laundering, and terrorism financing. The second focuses on identification, authentication, and trust services to ensure interactions are secure, fast, and efficient, as stated by the European body itself.

Common Uses of Online Identity Validation

In some scenarios, online identity validation is mandatory to provide security for the business and its users. Here are some solutions where identity verification can help:
 

• Opening bank accounts or conducting financial transactions.
• Registering and signing up on centralized cryptocurrency markets.
• Preventing fraud in the telecommunications sector, like in our collaboration with Orange.

How to Use Identity Verification in Your Business

While many businesses prefer to outsource identity verification services, others opt to keep it in-house. However, many of these in-house processes are outdated, manual, and prone to human error. Outsourcing this service is often more affordable, ensuring you're always up-to-date with current regulations. Here's how Didit Business works.

Document Reading and Validation

After photographing the document to read its information, NFC technology comes into play. Bringing a mobile device close to the document, our technology can read the encoded chip inside IDs or passports, ensuring the information is accurate. It's the most secure technology since the information is issued by Governments or representatives.

Biometric Data and Liveness Detection

Biometrics refers to the physical aspects that make us unique and identifiable. At this stage, we verify that the person matches their documentation and is not a static entity, thus preventing frauds like deepfakes or the use of photographs.

Additional Factors

Reviewing AML (Anti-Money Laundering) and PEP (Politically Exposed Persons) directives is also part of our identity verification process. We check whether the individual attempting to validate their information is subject to any sanctions that might compromise the security of your platform.

Moreover, our Machine Learning technology is continuously learning from each verification to counter the most sophisticated deceptions.

At Didit, we are committed to the privacy of individuals, and our identity verification developments, as well as our other solutions, are designed to make interactions on the internet more human-centric. Of course, we do this while adhering to regulatory frameworks and always providing the best possible user experience.