The financial world and its dynamics are ever changing. When it comes to this dynamic landscape, technology has undoubtedly played a crucial role. With the development of technology, not only did the rest of the world evolve but also the financial criminals. This advancement in criminal techniques has led to smart ways that the criminals are using to advance themselves.
In such a situation, staying ahead requires rapid innovation to enhance security, efficiency, and compliance. All these characters are essential for the safety of the public and customers, as well as a successful business.
Enter Electronic ID Verification (EIDV) which is a game-changer within the financial sector.
Electronic ID verification is rapidly revolutionizing customer onboarding processes. Such processes allow for ways for fraud prevention efforts while ensuring seamless financial services.
What is EIDV or Electronic ID Verification
Electronic ID verification is as simple as the name implies. Ever since documented citizenship has existed, we have acquired the need for verification of individuals for various purposes. This included access to places of royalty, adult-restricted places, etc.
Today, with progressing technology, we have even more places that require that ID verification. With e-commerce, fintech, and crypto the need for digital IDV has skyrocketed. Electronic ID verification uses computer technology to collect customer IDs to authenticate and cross-verify them, as per need.
EIDV in the Financial Sector: Transforming Customer Onboarding and Fraud Prevention
The financial industry is a strong pillar or foundation of the global economy. It aids in facilitating transactions, investments, and economic growth.
As mentioned before, the digital age led a revolution within the domain of financial crime. Criminals are always eager to pick up new techniques that they can use to their benefit. Since technology is constantly evolving, criminal tactics are too. For this particular reason, traditional customer onboarding methods are in a constant need of a significant overhaul.
Furthermore, the financial industry is particularly sensitive to money laundering and thus, requires extensive electronic ID verification and customer due diligence. As per estimates, about 5% of the global GDP goes towards money laundering every year.
Electronic verification of identity is thus essential.
The Evolution of Customer Onboarding
Traditional customer onboarding
Traditional customer onboarding refers to a series of manual processes. For this process, Individuals provide physical documents for identity verification. Authorities collect these documents, and carry out manual verification. This process is exhaustive, time-consuming and ridiculously prone to errors.
Moreover, the problematic thing about such old-school methods is the great room that these leave for identity fraud and financial crimes.
Electronic ID verification Solutions
E check verification is transforming the global landscape thanks to its efficient, digital, and secure methods for identity verification. However, even the early days of EIDV were slow and inaccurate.
In the 1990s, the development of digital certificates, IDs, and other electronic authentication methods revolutionized eIDV checks. These methods made it possible to verify identities online in a more secure and efficient manner. Later, in the 2000s, the growth of online fraud and identity theft built a focus on eIDV. Organizations began to adopt more sophisticated EIDV solutions, such as those that use facial recognition and biometrics. Today, these technologies supported by smart IDs, blockchain, and artificial intelligence are accelerating electronic id verification.
Preventing Financial Fraud
One of the major advantages of online EDIV solutions lies in their ability to fight, control, and limit financial fraud. By using advanced data analytics, financial institutions can identify discrepancies and irregularities in customer information. This approach minimizes the risk of fraudulent activities, protecting both the institution and its customers. Online EIDV solutions help limit financial fraud in the following ways:
Limiting ID theft and protecting victims
By verifying the identity of individuals before they can access financial accounts or services, electronic ID verification solutions play a key role in limiting ID theft. This verification can help prevent fraudsters from opening accounts in other people’s names. Similarly, they are also stopped from using stolen identities to access accounts.
By detecting fraudulent transactions
Electronic ID verification systems can work to analyze transactions. These can look for suspicious activity thoroughly and much better than humans. For example, the system can mark all transactions that come from a person repeatedly engaged in financial crime, or has a bad credit score. In this way, financial businesses can flag all such transactions. This is important because manually checking each entry is essentially impossible. Furthermore, manual scanning also boasts a great risk of error. Similarly, if a first time customer places an oddly large purchase, it can also be flagged.
By providing real-time fraud alerts
Once an EIDV system is automated, it can be set up to ensure that all users go on the website or portal to submit their data, the system processes, and the results are displayed. In this way the business can outsource a big chunk of its world load. If ever a person or ID stirs up doubt for the system, the management will be notified in real time.
To sum up
EIDV has come a long way, today, and will see even more evolution. In the future, we can expect improved accuracy, better data security, and better facial reading for ID pictures.
Thanks to electronic ID verification we can now bridge the gap between stringent security measures and customer-centric services, paving the way for a secure, efficient, and customer-focused financial future on a global scale.
Electronic ID Verification is a game changer for transformation within the financial sector. As technology consistently keeps evolving and regulatory demands keep increasing, electronic ID verification will continue to play a critical role.