How ID Verification via OCR can transform Digital World?

Richard M. November 19, 2018 11 minutes read

01 Why ID Verification is Crucial?
02 How does ID Verification Works?
03 OCR Technology for ID Verification
04 Compliances

ID verification is hailed as the ultimate savior for businesses operating multiple digital channels to increase their profits but before we discuss the utility of a reliable ID verification service, let us discuss, why it is becoming a need of every business that understands the value of identity theft prevention and digital fraud protection.

The digital world is haunted currently with the ever-evolving menace of digital fraud and online scams. Businesses utilizing any online channel for increasing their revenue streams have to face a tough challenge of keeping out users with fake credentials. According to a recently released survey, the majority of business managers are concerned with digital fraud cutting down on their online revenues and in fact, creating a sense of vulnerability regarding their investments made on digital channels.

Why ID Verification is Crucial?

This susceptibility to online frauds is not just limited to digital assets of real-world companies but it extends to sensitive customer data stored in the databases of a company. Let it be a banking organization, a social media giant or an e-commerce website, the public fall out from a substantial data breach of customer data can wreak havoc to the credibility of a company. It means that companies are required not only to secure their online channels but also need to restrict access to their centralized databases as well. Some other issues that can come up because of lack of a technically superior ID verification solution include but are not limited to:

Unauthorized transactions
Digital Identity theft
Corporate Espionage
Cybercrime

ID verification is the logical solution to avoid becoming a victim of any of the above stated digital threats. It is imperative for a prime-quality user experience to authenticate customer identity at the time of registration and even while performing crucial actions on various digital channels.

But what kind of ID verification should be performed to make the entire process hassle free? What kind of IDs should be allowed for ID Verification? What should be the benchmarks that an identity document should meet to perform ID verification? All of these are important questions and answering them would help companies to not only adopt a highly effective ID verification solution but understand the true worth of such a solution as well.

How does ID Verification Works?

There is no singular method to perform ID verification but most of the companies are using 3rd party services to verify identity documents of their incoming users. They either integrate their digital platforms with APIs and SDKs or require their customers to install 3rd party plugins in order to validate their identities. Some Identity verification services require their customers to direct incoming traffic on their portal, where they verify the users themselves and after verification process is completed, they re-direct the traffic to the main website or mobile application.

Some ID Verification services are limited to a specific region, which means that they can offer verification for only a limited number of IDs. Some KYC verification services offer verification for 100+ countries belonging to different continents but unfortunately, most of them have support for only official ID cards to perform ID verification. Shufti is an exceptional service as it offers official ID support for more than 225 countries and can even verify the identity of a user with the help of

Official ID Card
Driving License
Passport
Customized identity documents (employee card etc.)

For address verification, Shufti even provides support not only for official identity documents but also for

Utility Bill
Bank Statements

But these two documents cannot be older than 3 months, otherwise, they are not the eligible source of ID verification for Shufti. For an e-commerce and other online payment websites, Shufti can even verify

Credit Cards
Debit Cards

Shufti utilizes a hybrid of Human Intelligence and Artificial Intelligence to check for the authenticity of an ID displayed for identity verification. Pattern recognition and Machine learning algorithms are leveraged to provide risk-free authentication service to Shufti customers.

OCR Technology for ID Verification

Effortless verification procedures are the main USP of Shufti and what better way to make an ID verification entirely hands free for end-users with the help of OCR technology. OCR stands for Optical Character Recognition and it is a technology that can extract written information from any document, whether in digital format or physical format. An ID verification that takes help from OCR technology essentially means that all the personal information of the end users e.g. Name, Date of Birth, Address, Nationality, and Gender are extracted from an official identity document. This not only substantially reduces the time required to fulfill the verification process but also makes the input from end-user minimal. All they need to do is display their preferred identity document in front of a webcam/phone camera or upload an image on Shufti’s verification iFrame. After that, Shufti will do its magic.

After personal information is extracted by OCR technology from an official document, Shufti’s automated system fills it in an information form and displays it to end-user for confirmation. In case a user finds any text field empty or finds any mistake in extracted information, they can correct it manually before the information form is forwarded to Shufti for verification. So, Shufti has automated the information extraction process for identity verification but has kept the final say with the end-user to approve the credentials being forwarded for verification. As transparency rests at the heart of AI-powered verifications from Shufti, that’s why it has been ensured that the users have the necessary rights to edit the information extracted by our OCR technology. We have 100% trust in our product but we are not going to let our trust in technology lose sight of a customer’s right to their true identity. After all, technology processes are constantly improving field and machine learning from Shufti will help perfect identity verification processes for Shufti customers and end-users who will have to undergo identity verification processes for authentication of their personal information.

AI quickens verification Process

Shufti has strategically employed the power of Artificial Intelligence to not only make the entire verification process error free but to provide real-time verification results to its customers. All identity verification services from Shufti are offered with a turn around time of 30-60 seconds, which means that it takes under 1 minute to collect all the verifiable information from end-users. OCR technology brings down this time duration for the collection of data even lower as the end-user will not have to spend any time in filling out any information form that then has to be verified with the help of an identity document. The smart system of Shufti can collect the information on its own.

It is important to mention here that an official document is verified before any useful customer information is collected from it. This ensures quicker verification process as an AI-based system will decline any request of OCR based ID verification as soon as it detects that a fake document is being used to verify a person’s identity.

Another important aspect of Shufti is that its Artificial Intelligence is based on Machine Learning, which means any new attempt to utilize doctored or fake documents is not only declined but the system “remembers” the pattern of fraud and takes lesser time, next time someone tries to verify their identity document with the same method of forgery. It means that with each verification Shufti verification system becomes smarter, favoring its customer for their continued loyalty to Shufti verification services. KYC verification and other forms of identity verification become entirely risk-free with Shufti at your side.

Use Cases for Swift KYC

ID Verification supported by OCR technology can be beneficial for a large number of businesses around the globe. Especially, identity verification service from Shufti that covers 200+ countries and territories has support for multiple document formats can be beneficial for businesses around the globe. Even the multi-national companies offering services in different territories can take advantage from multiple document formats supported by Shufti for verification for its various offices/branches located in multiple countries. No other KYC software can promise similar service standards while performing KYC checks.

Address Verification – Using OCR technology for ID verification can come in handy while authenticating address of a potential user who has placed an order on an e-commerce website. This form of digital KYC will help bring down the cashback requests and if used on a credit card, it can even secure online shipping services from credit card scams, something that other fraud protection services cannot do at such swift pace.

AML Compliance – Many KYC solutions are limited to provide only identity verification services to its customers but Shufti can even provide AML compliance to its customers as well. Shufti takes help from a large data bank compiled from 3000 databases, 1000 sanction lists and watch lists, in addition to a large list of politically exposed persons to perform AML background checks. So, not only you can verify the true identity of a user with the help of OCR based ID verification services of Shufti but can also measure financial risk attached to bringing onboard potential customers.

Insurance fraud prevention – International Insurance industry can use an identity verification service such as Shufti to integrate a highly efficient online id verification system with their pre-existing digital resources. As explained earlier on, Shufti is fully capable of verifying not only official identity documents but its OCR based ID verification functions perfectly for a customized document such as insurance card as well. False insurance claims for life insurance and medical care insurance can easily be detected by Shufti by extracting the data from the customized document.

Compliances

There are several KYC verification solutions available but most of them pose a great danger to their naive customers. Some KYC software lacks proper PCI certification to carry out a reliable verification over a secure network. Vital financial information is at risk of hacking that is forwarded by a client to their chosen online identity verification solution that in return lacks PCI certification.

GDPR is another concern when it comes to online ID verification. If you think that you are not based in EU and thus, you are secure from provisions of GDPR, then you must re-think your strategy. This data privacy law is applicable to any business that is handling vital personal information of EU citizens and law allows EU authorities to take action against companies that are not based originally in EU. So, a KYC check performed using ID verification without compliance with GDPR can land you in a heap of trouble.

Shufti, on the other hand, is not only fully compliant to PCI and GDPR regulations, but it adheres to compliance regulation put forth by several other data protection agencies as well. We collect data of end-users through secure channels and then safeguard that data from any potential data breach as well. We also never use verification data for any monetary gains by selling it to any 3rd party marketing firm or personal information harvesting companies. We are in data verifying business, not in data selling the business.

Conclusion

ID verification by OCR technology is the right way to authenticate the identities of a user in the coming future, as it not only reduces the risk of registering users with fake credentials but also significantly reduces the verification turnaround time. Coming from an already swift KYC software such as Shufti, online businesses can be rest assured that no other solution can provide verification status for their incoming traffic as quick as Shufti.

With proof of verification available in Shufti back office and mandatory approval from end-user before verification data is sent to Shufti, ensures transparency for both Shufti customers as well end-users performing ID verification via Shufti.