Monetary benefits are often the motivation behind criminals’ fraudulent activities. Data breaches, identity thefts, synthetic identity fraud, and account takeover fraud are among the illegal activities of criminals that continue to challenge financial organizations.
To prevent criminals from infiltrating their systems, financial institutions employ identity proofing processes. User identity verification and document authentication play a significant role in how financial firms manage to protect their clients’ confidential information and funds. Accordingly, effective identity verification solutions strengthen organizations’ reputations, improve client trust, comply with regulations, and counter criminals’ illegal activities.
However, criminals are using more sophisticated and malicious approaches to circumvent conventional verification methods. Consequently, traditional Know Your Customer (KYC) processes and other traditional authentication methods are inadequate in deterring fraudulent identity threats, mainly in this digital era where many businesses and their customers shift to using digital channels for their transactions.
Therefore, to improve security and regulatory compliance, particularly during remote onboarding of clients, financial institutions must replace outdated, manual checks with modern identity proofing solutions. Innovative identity verification methods, such as online identity verification, are more efficient when onboarding clients and prohibiting the bad guys from accessing their networks.
Banking firms can use biometric identification solutions, which provide a less invasive identity verification process and support omnichannel customer identification. They can also employ multifactor authentication solutions, which the Federal Financial Institutions Examination Council (FFEIC) recommends for financial firms as it involves the use of two or more verification criteria. Individuals can authenticate their identity by providing something that is known to them (password, PIN, account number), something that they have (bankcard or token), or something that they are (biometrics).
Businesses in the financial sector know the value of modern user identity verification and document authentication. Implementing identity authentication processes allows companies to protect the confidential data and funds entrusted to them and to prevent criminals from infiltrating their systems while exercising due diligence to identity verification regulations. This infographic from Ipsidy provides more details about identity verification and identity document authentication.
