An identity verification service is used by businesses to ensure that users or customers provide information that is associated with the identity of a real person. The service may verify the authenticity of physical identity documents such as a

driver's license A driver's license, driving licence, or driving permit is a legal authorization, or the official document confirming such an authorization, for a specific individual to operate one or more types of motorized vehicles—such as motorcycles, ca ...

passport A passport is an official travel document issued by a government that certifies a person's identity and nationality for international travel. A passport allows its bearer to enter and temporarily reside in a foreign country, access local aid ...

, or a nationally issued

identity document An identity document (abbreviated as ID) is a documentation, document proving a person's Identity (social science), identity. If the identity document is a plastic card it is called an ''identity card'' (abbreviated as ''IC'' or ''ID card''). ...

through documentary verification. Additionally, also involve the verification of identity information (fields) against independent and authoritative sources, such as a

credit bureau A credit bureau is a data collection agency that gathers account information from various creditors and provides that information to a consumer reporting agency in the United States, a credit reference agency in the United Kingdom, a credit report ...

or proprietary government data.

Background

Identity verification services were developed to help companies comply with Anti-Money Laundering (AML) and

Know Your Customer Know your customer (KYC) guidelines and regulations in financial services require professionals to verify the identity, suitability, and risks involved with maintaining a business relationship with a customer. The procedures fit within the broad ...

(KYC) rules, identity verification is now a vital component to the transaction ecosystems of eCommerce companies, financial institutions, online gaming, and even

social media Social media are interactive technologies that facilitate the Content creation, creation, information exchange, sharing and news aggregator, aggregation of Content (media), content (such as ideas, interests, and other forms of expression) amongs ...

. Through adopting digital fraud prevention methods, businesses can achieve AML and KYC compliance while addressing the risks associated with fraud. In financial industries, verifying identity is often required by regulations known as

or Customer Identification Program. In the US, one of the many bodies regulating these procedures is the

Financial Crimes Enforcement Network The Financial Crimes Enforcement Network (FinCEN) is a bureau within the United States Department of the Treasury that collects and analyzes information about financial transactions to combat domestic and international money laundering, terrori ...

(FinCEN). The Financial Actions Task Force (FATF) is a global anti-money laundering and terrorist financing watchdog organization. A nondocumentary identity verification requires the user or customer to provide personal identity data, which is sent to the identity verification service. The service checks public and proprietary private databases for a match on the information provided. Optionally, knowledge-based authentication questions can be presented to the person providing the information to ensure that he or she is the owner of the identity. An identity "score" is calculated, and the identity of the user or customer is either given the "verified" status or not, based on the score. Customers of various businesses, such as retail merchants, government entities, or financial institutions, are often required to present an identification to complete a transaction. For instance, a merchant may require customer identification for various types of purchases (e.g., alcohol, lottery, or tobacco purchases) or when certain types of payments (e.g., checks, credit cards) are presented to pay for transactions. Financial institutions usually require customers to present a form of identification to complete a withdrawal or deposit transaction, cash a check, or open a new account. Government entities may require identification for access into secure areas or other purposes. Other businesses may also require identification from customers. An additional method to service Identity Verification that is gaining industry prominence is

artificial intelligence Artificial intelligence (AI) is the capability of computer, computational systems to perform tasks typically associated with human intelligence, such as learning, reasoning, problem-solving, perception, and decision-making. It is a field of re ...

, more commonly referred to as artificial intelligence–based identity verification. ID verification is performed through a webcam, and the results are available in real time and are more accurate than the untrained eye. However, there have been concerns about Eurocentric bias in artificial intelligence and how that could affect the accuracy of results.

Application

Industries that use identity verification services include financial services, digital businesses, travel and leisure, sharing economy businesses, telecom, FinTech, gaming and entertainment. Identity verification services exist both online and in-person to verify identities. These services are used in the financial service industry, e-commerce platforms,

social networking sites A social networking service (SNS), or social networking site, is a type of online social media platform which people use to build social networks or social relationships with other people who share similar personal or career content, interests ...

, Internet forums, dating sites, and

wiki A wiki ( ) is a form of hypertext publication on the internet which is collaboratively edited and managed by its audience directly through a web browser. A typical wiki contains multiple pages that can either be edited by the public or l ...

s to curb sockpuppetry, underage signups,

spamming Spamming is the use of messaging systems to send multiple unsolicited messages (spam) to large numbers of recipients for the purpose of commercial advertising, non-commercial proselytizing, or any prohibited purpose (especially phishing), or si ...

and illegal activities like harassment, Identity fraud, and

money laundering Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...

. For example, in banking, identity verification may be required in order to open a bank account. There is an increasing call for regulation with the rise in popularity of

cryptocurrency A cryptocurrency (colloquially crypto) is a digital currency designed to work through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. Individual coin ownership record ...

exchanges. In December 2020 the U.S. government's

(FinCEN) has proposed rules to require banks and money service businesses (“MSBs”) such as cryptocurrency wallets to submit reports, keep records, and verify the identity of users who perform transactions with convertible virtual currency.

References

{{DEFAULTSORT:Online Identity Identity management systems Internet privacy

Background

Application

See also

References