Gone are the days when people had to wait endless hours at banks or other places to have their identity verified. In the 21st Century digital day and age, a mobile-clicked image or video is all people need to avail of services or an opportunity. And guess what is driving this digital/online identity verification? One word – Artificial Intelligence.
But how exactly does Artificial Intelligence help with identity verification? Read along to find out.
This blog talks about everything from artificial intelligence and identity verification to what role AI plays in ID verification.
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What is Artificial Intelligence?
Artificial Intelligence is the simulation of human intelligence in machines, like computer systems; these machines are programmed to think like human beings and mimic human actions; the AI system ingests large amounts of data and analyzes them for correlations and patterns. It then uses these patterns to make predictions about the future. Here are some examples of Artificial Intelligence at play:
- Self-Driving Cars
- Alexa, Siri, Google Assistant, etc.
- Conversational Bots
- Netflix Recommendations
- Email Spam Filters
What is Identity Verification?
Identity verification, as the name suggests, is a process tasked with ensuring that a particular person is who they claim to be.
In the past few years, primarily because of the COVID-19 breakout, government and private organisations have upgraded to digital identity verification. The upgrade has helped companies reach customers even in remote areas, improving their customer base and thus revenue.
Common examples of digital identity verification methods are:
- Biometric Verification: This type of verification refers to any means by which individuals get identified by assessment of their distinguishable biological traits.
- Liveness Detection: This method of identity verification is similar to biometric verification. It helps prevent identity frauds that people commit by wearing a face mask or by clicking photos of photos.
- ID Document Verification: Here, the IDs issued by a government get checked for legitimacy. Photographs on the front and back of the document are uploaded; Verifier uses these photographs to check against the government records.
- OTP (One Time Password): In this method, a one-time password, usually a 4–8-digit number, is sent to the registered mobile number or email of the individual. The fact that the OTP is sent only to the registered contact helps establish their identity.
- KBA or Knowledge-Based Authentication: This method of digital ID verification requires the individual to answer some questions, the responses to which have already been submitted.
What Industries Need Digital Identity Verification?
● Gambling
Companies in the online gambling sector use ID verification to identify and ban players with criminal intentions. Several fraudsters use such platforms to launder money by creating fake IDs. However, digital ID helps reduce the risk to a minimum.
● Alcohol
Underage alcohol consumption is forbidden in many countries. However, sometimes kids tend to forge IDs and purchase alcohol, which is illegal.
So, the companies that deal with the sale of alcohol use digital ID verification to ensure no unlawful consumption happens.
● Finance
Companies in the finance sector like banks, insurance companies, and other payment platforms focus on making the customer onboarding process a breeze. And they use digital ID verification for the same. Digital identity verification not only makes customer onboarding easier, but also helps prevent fraud.
Role of Artificial Intelligence in Identity Verification
● AI Helps with Fraud Detection
With technological advancements, hackers are getting increasingly innovative. Every new innovation helps them find ways to defraud organisations using fake IDs.
However, with AI in place, companies can easily prevent such frauds from taking place. Using AI, companies are able to spot the difference between a fake ID and a real one and thus reduce the cases of fraud.
● AI Helps Improve Customer Onboarding Experience and Retain More Customers
A lengthy KYC and customer onboarding process is not something customers particularly like. In fact, according to Consult Hyperion, 25% of the applicants abandoned the onboarding process due to KYC friction.
Fortunately, with AI, companies can comb through millions of photo IDs and other data within seconds to decrease the overall time taken to onboard a customer. They save on time and the reduced customer drop rates improve customer retention.
● AI Helps Scale the Identity Verification Process
For a company that deals with a few customers weekly, verifying the IDs manually, is not particularly challenging. However, if a business receives millions of requests each week, manual verification becomes an impossibility. Besides being time-consuming, it will lead to an increase in the margins.
However, as AI works several thousand times faster than humans, companies can use it to scale their ID verification process with ease. Regardless of the number of verification requests a company gets, with AI, it all sounds like a piece of cake.
● AI Helps Mitigate False Positives
Sometimes companies, especially financial institutions, opt for a rule-based system to prevent fraud. While this may seem pretty smart a move, a rule-based system can be tricky as well. It reports every transaction that fails to meet the set criteria as fraudulent. Most of which are false alerts.
Even Reuters reported that 95% of the alerts are usually closed in the first-phase review as false positives.
Fortunately, AI helps solve this problem. Artificial Intelligence first checks the relevance of the alert before flagging it as suspicious or fraudulent. Furthermore, as AI-based verification systems aren’t just based on a set of rules and learn constantly, they are way more effective and accurate.
This way, companies can mitigate false positives and thus save a lot of time and effort. In addition, with the help of specialised algorithms, AI systems can detect suspicious patterns that are key to preventing money laundering.
Wrapping Up
As more and more businesses/companies are upgrading to digital identity verification, the chances of identity theft are increasing too. One study by FTC or Federal Trade Commission reveals that it received over 1.4 million reports of identity theft in 2021. How can corporations prevent such attacks?
Well, this is when companies like Hyperverge come into the picture. Hyperverge offers services such as ID verification, video KYC, and face authentication, powered by Artificial Intelligence.
Liveness detection is another service offered by Hyperverge. Here, an advanced form of AI distinguishes the digital representations of a person’s face by checking their facial movements.
With Hyperverge services, companies across the globe can ensure customer security. In addition, Hyperverge, through its bouquet of services, makes the ID verification process, customer KYC, and the customer onboarding process super easy.
So, to make their KYC process seamless, improve customer retention, prevent money laundering, and onboard more customers, businesses should look no further than Hyperverge.