Almost every day, people face situations where it's necessary to prove their identity, whether they’re using a credit card, withdrawing money from their bank account, or ordering a glass of wine. In these situations, identity verification is an appropriate and simple way to ensure people are who they say they are. It helps protect the identity of the person who is asked to show their ID, and the business that requires it.
It's not as easy (or as secure) to verify someone's identity during digital transactions — and manual identification processes can result in a less-than-ideal customer experience. Further, it can also put businesses at reputation and financial risk. Digital identity verification is an important step in businesses' digital transformation journeys — an essential capability to provide seamless and secure digital experiences.
When it comes to business transactions, identity verification is the process of authenticating and proving the identity of a person, and is typically done before a sensitive or important transaction.
Digital ID verification is the same process explained above but applied to online transactions – and it's a critical part of the agreement-signing process. Because this verification doesn't happen in person and some types of transactions are more susceptible to fraud, this identification process can be more challenging and require more verification steps.
ID verification can be manual or automated, and the process can vary depending on the type of transaction and the method used.
An applicant or customer provides a physical ID or documents with traditional identity verification. A photo ID is compared with the person presenting it and other verification documents can be compared with the information already available to the business via public databases.
With electronic ID verification, a simple email verification may be enough to verify identity. Additional methods may be required for higher-value or riskier transactions. Such methods may include sending a two-factor authentication code to a cell phone or requesting a customer send a photo ID along with a real-time selfie. More of these methods are described below.
Digital ID verification is effective in minimizing risk, reducing fraud, and protecting consumers, among other things:
ID verification helps minimize risks for many types of online transactions by helping ensure valid signatures are gathered from verified people. Digital ID verification also helps facilitate compliance with banking regulations like KYC and Anti-Money Laundering (AML).
Other occasions in which digital identity verification may be required include:
As digital identity theft becomes more common, it's never been more important to strike a balance between client experience and fraud protection. Notarizations — an age-old method of identity verification — can be done online through the Notarize platform, allowing you to provide a seamless, digital customer experience while helping to mitigate the risk of fraud.