Electronic ID verification or an EID check refers to the usage of digitally stored data for remote identity verification purposes. Electronic identity verification is a security measure that is a requirement by law for certain types of businesses to implement and regulate.
While it is only compulsory for some, almost all businesses can benefit from identity verification services in one way or another.
Electronic ID verification and the Law – KYC and AML Regulations
Electronic ID verification is part of the Know Your Customer (KYC) as well as the anti-money laundering (AML) regulations. KYC and AML regulations are required to be implemented by certain businesses including those offering financial services.
By law, businesses for whom ID verification is a requirement include banks, fintech institutions, crypto-exchange platforms, currency-exchange businesses, online casinos, any business with a significant chance of fraud, and those dealing with age-restricted content.
KYC and AML laws are serious regulations and failure to comply with them can have serious implications such as hefty fines or shutting down of business.
Identity verification as a balance between security and customer convenience
In just the year 2021, $721.3 billion were lost to identity fraud with an overall increase of 68% from 2020. These numbers are alarming and are only steadily increasing. Such numbers make strict Electronic ID verification an absolute necessity. However, while the higher the security measures, the less the likelihood of fraud is true, it is also extremely important to understand that strict electronic ID checks can instead turn customers away leading to website abandonment. Research has shown that for every two visitors, one will leave a website if it takes more than 6 seconds to load.
This is why maintaining the ideal balance between security and customer convenience is extremely important. Electronic ID verification is a great way to simplify the identification process without any distress to the customer. Identification system only takes a few seconds to process customer onboarding and authentication helping businesses offer the ideal level of customer service. This is a great way to build trust among users promising them the highest level of security.
Automating Electronic Identification – Boosting efficiency and accuracy
Electronic ID verification helps businesses overcome strains of physical/manual ID verification. This can be of extra benefit for businesses dealing with age-restricted content such as online games. Such websites have received a great influx of young children since the pandemic lockdowns; dealing with this through electronic age verification can help make the process much faster with fewer errors.
Besides improving efficiency and speed, online ID checks offer a much larger dataset to validate a customer’s profile. This means more accuracy, which further creates a more secure business.
Electronic ID verification for Better Financial Prospects
In 2020, the e-commerce industry was valued at $10.36 million. Consumers are what matter most in this industry, and for 57% of online retail consumers, digital identity security is a top priority. This means that you are more likely to be trusted by consumers if your business is perceived as being secure. Electronic document verification can be a great way to ensure that customers and users feel safe online. This can greatly help elevate sales.
Using and implementing systems for electronic ID verification can be a step towards improving financial prospects at not just the business level but also at the national level. According to McKinsey Global Institute, maximum implementation of electronic ID systems can help increase a country’s GDP by 3-13% by 2023.
Online ID checks for Employee Verification
57% of all fraud is due to employee involvement .This is a mind-blowing statistic and makes it all the more important for businesses to perform regular electronic ID verification on all employees. Identity Verification systems can be set up for remote hirings, log-in, and log-out timings, as well as for accessing any and all sensitive data or information.
How Electronic ID verification works
Electronic ID verification or digital document verification. The system works by using some form of a government-issued ID document to process and then verify the user’s identity. The process consists of 3 straightforward steps.
When a user tries to sign up or sign into a digital service that requires electronic document verification, they are asked to submit a government-issued photo ID. This can be something like a passport or a driver’s license.
Electronic ID check – Processing
Once the two required documents are submitted, then its starts the electronic ID verification process. First, the identity document is checked for originality. Once authenticated, PII or the Personally Identifiable Information of the user is extracted from the document using image-to-text systems. This PII is then matched with the information provided in text form, such as name and address, by the user to the system. The selfie is also matched with the photo provided on the government ID, using facial recognition software.
Displaying the results.
Once the electronic ID verification process is done, the system displays the results as a successful match or a failure in verifying the user.