Customer due diligence is one of the major concerns of businesses thriving in a global era. Most of the businesses are dealing with a global clientele in one way or the other. Customer due diligence, KYC/AML compliance is inevitable for all industries. Fraud is increasing at a huge pace and the regulatory authorities are becoming more stringent towards businesses regarding KYC/AML compliance practices.
Businesses are exposed to a global risk these days and manual verification methods have failed. When everything is available online then why not id verification of customers? To address the risk coming from global stakeholders businesses are moving towards digital ID screening solutions.
What is a digital ID screening?
Digital ID screening is the process of verification and authentication of a customer’s id document for due diligence purposes. Id documents that are screened include ID card, passport, driving license, etc.
Digital ID screening is conducted through a document verification or id verification solution. Such solutions use artificial intelligence and machine learning to fetch the personal credentials of a person from the id document and then matched it with the information that the end-user has entered manually while registering with a business platform. In case the information matches the end-user is allowed access to the platform or denied in case any mismatch is found in the information. Also, digital verification solutions check the default format of the id document that the end-user shows so, the use of fake or forged id documents is mitigated in a matter of seconds.
The id verification industry is growing and businesses from every corner of the world are using them due to several benefits that such solutions offer.
Why digital ID screening solutions are becoming a norm among businesses?
Businesses are moving towards digital ID screening solutions due to below-mentioned reasons:
Outsourcing is not a big deal
There are several businesses offering id verification and ID screening services. Some are offering national-level services and others are offering global services. Every business finds some solution that is feasible as per their cost, scope, and technological needs.
Most of the businesses these days are using outsourced ID screening and document verification solutions to perform necessary due diligence on their customers. Such solutions are good to go with single API integration. No hefty technological resources are required and the integration can be completed within minutes.
Digital ID screening solutions are quite cost-and-time effective in comparison to manual verification and developing an in-house solution. Some companies are offering budget solutions that can be customized as per your budget and verification needs. Also, the digital KYC solutions deliver verification results within 30-60 seconds.
Regulatory authority Financial Action Task Force (FATF) has issued a global digital ID system guide. This guide has added more credibility to the effectiveness of the digital ID systems.
FATF has issued the first draft of the guidance for suggestions from the stakeholders. This guidance includes the process of digital ID verification, technological requirements and the stakeholders of such solutions.
To wrap up, digital ID screening solutions are the next big thing and most probably the favorite customer due diligence tool of the businesses in 2020. We can expect that global businesses will invest more in KYC and AML compliance due to hefty regulations. Most of the businesses are integrating technology in their organizations for customer ease and digital identity verification solutions add credibility to their platform. It helps businesses deal with KYC/AML compliance, fraud prevention, and customer due diligence in a proactive manner. The risk is global for businesses so the cover should be globally efficient too. Hence the reason most of the businesses these days are investing in online identity verification solutions.