Identity fraud in the UK is increasing at an alarming rate of £783.8 million in 2020. Document authentication has become a necessity for financial and non-financial institutions. Financial bodies like FATF, FinTRAC, and FinMA have established strict KYC and AML policies to prevent identity scams. These policies required comprehensive customer diligence measures and KYC verification of end-users to prevent any malicious activity. Government and financial organizations required in-person KYC verification of end-users. Thanks to the revolution of artificial intelligence which empowered businesses to comply with KYC regulations. This will help businesses ensure that only the verified end-users access their services while preventing wrongdoers from illegal activities.
How AI-based Document Authentication is performed?
Businesses can utilize AI-based document verification solutions to perform seamless verification of their end-users and prevent criminals from gaining illegal access to their services. This solution minimizes the risk of identity fraud by making it easier for businesses to detect the forged and fake ID documents.
Here’s how the document authentication process is carried out.
- End-user captures or uploads the image of ID document (passport, driving license, ID, and Credit cards).
- Optical Character Recognition (OCR) technology fetches the information from the ID document.
- It is checked that the document is authentic and issued by some government authority.
- After successful identity verification, the results are delivered via an API and secured in the back office.
How is AI Document Authentication Different from Physical Document verification?
Physical document authentication involved manual KYC procedures to verify the identity of the end-user. This was a time taking process. It was not efficient against the detection of illegal or false documents. It enabled criminals to exploit this vulnerable process for their malicious activities. Artificial Intelligence-based document verification solution facilitates businesses to perform immediate and secure digital verification of their end-users. It verifies the end-user by analyzing the unique ID document information provided against the agreement. It assists businesses to perform digitized KYC procedures to identify the end-user. Reducing the risk of fraud by detecting false or fake ID documents in real-time.
Use Cases of Document Verification Solution
At the time when identity frauds have taken over all the industries, every business requires a documents verification service. Here we will discuss a few of them and how the solution can help to mitigate fraudulent attacks.
Financial regulatory bodies such as FinMA and FATF have initiated firm KYC regulations to minimize entity and financial fraud risk. If a business fails to observe KYC regulations these financial authorities impose high penalties. This solution helps banks to observe KYC regulations. It performs real-time verification of the end user’s ID document, saving both the time and effort of banks.
A larger community depends on fintech for money management. Criminals are using sophisticated ways to exploit fintech businesses for their illicit money-making activities. Fintechs are adopting this solution to prevent identity threats and onboard customers with complete authentication of their identity considering the KYC regulations. This digital verification solution enables fintech businesses to deter illegal transactions and engage with viable customers at the same time.
Recent research by juniper shows that e-commerce businesses will probably lose $20 billion due to online scam activities in 2021. The e-commerce industry is facing the major risk of identity theft. Criminals make use of stolen identities to exploit sensitive information. This information is used for acquiring shopping accounts of legitimate customers.
Ecommerce businesses should use a document verification solution to perform a detailed KYC background inspection on the end-user through ID documents to prevent false impersonators from using their services and secure the sensitive data of the end-user.
Criminals fake their identity to exploit cryptocurrency platforms for money laundering purposes. This solution assures that the approved investor with verified ID documents undergoes the KYCC process and removes false or high-risk entities.
Educational institutes utilize document verification solutions to verify examination slips or the identity of the students. This solution compares the facial features of the student through a webcam against the ID document. This ensures that the verified candidate takes the examination.