Digital Identity enables customers to open online accounts and perform secure transactions keeping intact trust & transparency required in a business relationship
Given the unprecedented rise in online products and services, money laundering, terrorist financing and other outsider risks have gone up as well. As a need of the hour, safeguarding the identity of clients becomes a top priority for entities whether they are operating in the financial or corporate sector. Verifying the digital identity of users is an important part of due diligence procedures carried out for customer onboarding.
What is Digital Identity?
As per the Digital Identity Trust Framework by the UK government, a user’s representation in the online space is referred to as digital identity. It enables businesses to make sure the customer they are onboarding is a trusted individual. For instance, a digital wallet may contain many pieces of trusted information such as their first and last name, date of birth, and address data. Often called attributes, these provide clues to determine the user’s identity allowing service providers to process secure transactions remotely.
What is Online Identity Verification?
Digital or online identity verification (IDV) is the process through which individuals (end-users, employees, customers, business clients and investors and stakeholders) are verified using a remote channel. The procedure entails cross-checking identity information provided using government-certified documents such as an ID card, passport, driving licence, or similar identity proof including utility bill, credit card or bank statements in some particular cases.
Digital identity verification service providers offer solutions which by and large combine face verification with document checks. This acts as an additional layer of security as the live selfie is compared with the ID photo enabling a foolproof verification mechanism.
Which Industries Use Digital Identity Verification?
With the advent of high-end technology, and the continuously evolving consumer needs, businesses operating in various industries are employing online identity verification for transparent and safe B2B and B2C relations. Given different industries have varying frameworks and customers, they have one thing in common which is very important – making sure their customer is not a potential criminal. This is important to reduce financial crime and identity theft carried out by perpetrators who manage to acquire business services through impersonation or deceiving the system.
Here are some industries that incorporate digital identity verification in their daily operations:
- Electronic Gaming: Verifying online players’ identity has two-fold benefits – it reduces consumption of violent and R-rated gaming content by underage users, and in turn saves online platform from hefty penalties
- Online Gambling: E-betting and online casino operators can employ digital identity authentication protocols to make sure the well-being of minors is not affected by age-restricted content
- Alcohol/Tobacco: As harmful as tobacco and alcohol-based products are for adults, they are for children as well, which is why liquor e-stores and online vapes shops must incorporate digital identity verification while onboarding new customer
- Finance: Entities operating in the financial industry like banks, insurance companies, crypto exchanges, credit unions, and brokerage firms
- Real Estate: Buying and selling of property in the real estate sector often is riddled with money laundering risks due to which IDV services are necessary
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