Fighting identity fraud with AI-enabled ID document verification

  • Edward lilly
  • April 24, 2020
  • 6 minutes read
  • 1521

It’s no secret that identity fraud has become one of the most increasing problems for online businesses. According to a report on identity fraud statistics, there were 14.4 million victims of crimes related to identity theft and fraud in 2018 only. Moreover, as online transactions increase due to the lockdown during COVID-19, the number of fraudulent transactions and data breaches and the instances of cyber frauds are also increasing. 

On the other hand, online ID document scanning solutions are also becoming increasingly popular. Integrated with advanced technologies, ID verification solutions ensure customer authentication using govt-issued ID documents. AI-based identity document verification makes it possible to accurately process, authenticate and verify the identities at scale. Here’s how AI-enabled document verification helps secure businesses against identity frauds.

How AI uses document verification to fight fraud?

Most of us have experienced this moment either during an account opening or performing any transaction, where a person is required to submit a govt-issued ID document (driver’s license, ID card or passport). The verification officer verifies the details on the document and matches the picture on an ID document against the face of the customer to make sure that the person is not an impersonator trying to pull a fast one.

These days AI is playing the same role as that of the verification officer, using the software that allows ID validation remotely through online document verification. This method allows businesses to carry out transactions remotely by verifying that the person on the other end of the transaction is who they say they are. 

As the fraudsters are becoming more sophisticated it is important to keep up because there are so many ways to create fake documents and allow someone to claim the identity of another person. However, technology helps in detecting and eliminating the frauds.

Here are a few categories of document fraud that fraudsters use to fake the identity:

Illegitimate documents

Illegitimate documents are completely false documents. They lack the characteristics of original documents such as holograms, rainbow prints and other current standards on the original ID documents.

False Documents

False documents aren’t forged or manipulated documents but they are physically stolen documents that fraudsters use to bypass the document verification.

Modified Documents

These are original documents that are altered to fool the verification. Most of the modified documents are created by fraudsters in such a way that it becomes difficult for humans to identify any alterations. However, AI-enabled document verification solutions can identify the tempered documents by checking the font and changings in the pixels. 

How to scale document authentication using AI and machine learning?

AI-enabled document verification solutions test various elements of the ID documents while verifying the customer identity. Some of these checks include

Authenticity Checks

AI and machine learning models make sure that the document submitted for verification is genuine/authentic.

Format Identification

AI-based solutions have the ability to identify the exact format of the documents. For instance, Shufti Pro has the ability to verify documents from 3000+ document templates from 230 countries and territories in 150+ languages. 

Authenticating MRZ code

AI checks the authenticity of the machine-readable zone (MRZ) code by evaluating if this field has been edited or tampered within the document. After ensuring the authenticity of the document, it decodes the MRZ and matches it against the information on the document.  

Detecting crumpled/folded edges

As the documents are made of paper, therefore they are prone to wear and tear. AI 

system performs checks to identify folded/crumpled edges on the document that might affect their authenticity.

Detecting signs of tempering/forgery/photoshop

Upon training of the accurate data, AI models become capable of accurately detecting any signs of forgery even if it is a slightest change in a single pixel. These kinds of forged documents are difficult to detect with the naked human eye. 

Confirming holograms/rainbow prints

Government-issued identity documents contain specific holograms and rainbow prints. AI-based document verification solutions have the ability to detect any change or tempering in these holograms and rainbow prints.

Verifying Special paper and Ink

To confront identity frauds, govt-issued ID documents use special paper and inks. AI has the capability to verify the special paper and ink on the documents.

Checking the micro prints

Government-issued ID documents have microprint as an additional security layer to prevent fraud. The AI checks microprinting for authenticating documents.

Benefits of using AI for document verification

By verifying the authenticity of documents, AI-based ID document verification contributes to the fight against fraud, the improvement of compliance and the optimization of the customer experience. Here are some examples of what you can accomplish with online document verification solutions:

Provide the speed and convenience to your customers

According to a study, speed and convenience are most important to consumers in terms of customer experience. Manual verification of identity is a slow and tedious procedure. With Shufti Pro’s ID document verification, customers can prove their identity quickly and easily using a passport, driver’s license or identity card, by simply uploading a photo of the document from their computer, or by taking a photo of the ID and sending it using their mobile device. 

Reduce risk and onboard real customers

As your digital business grows, verifying the identity of the customer becomes more and more important, both for you and for your customers. According to a 2018 report on global fraud, the lack of a visible security process is the main reason why customers abandon an online transaction. ID document Verification reduces business risks, increases customer confidence and helps in compliance with local regulations (KYC – Know Your Customer regulations), all automatically and generating fewer errors than manual processes.

ID document Verification works behind the scenes to ensure that only valid ID is recognized. This solution analyzes the unique information contained in the identity documents to check their validity, then ensures that the name appearing in the agreement is identical to that of the identity document, so that only the authorized person can access the contract.

By enabling AI-based document verification services, businesses could easily prevent identity frauds and save their customers and business from fraudulent losses that occur due to identity theft frauds online.