Id Verification Services

What are the Different Types and Solutions of ID Verification?

Customer identification is not an option for some businesses, it’s a must. Ignoring due diligence could get them in legal trouble. This article looks at the types and solutions of ID verification. It also looks at why customer due diligence is critical for financial institutions, and what they should look for while evaluating ID verification services.

Types of ID Verifications

Different companies require different types of ID verifications. The ‘type’ depends on the nature of the business. For example, banks have more security checks and layers, as opposed, say, a website, that simply wants to collect verified email addresses. 

Biometric is the most common form of identity verification. It verifies an individual through one or more unique biological traits. Fingerprints, retina and iris patterns, etc. are the classic methods of biometric verification. Add document verification to it and this combination fortifies the identity verification.

Drivers Licence, passport, a government-issued identity document, are the most common papers used in this process. Additionally, a document issued by a credible organization such as the credit bureau might also be used. 

For instance, if a business would like to; identify an individual online, verify their passport, and then match their live face with the picture on the passport, this can be done in no time. How? Let us show you. Shufti Pro offers a free demo. 

Who Regulates ID Verification Services?  

ID verification services help companies achieve anti-money laundering (AML) and know your customer (KYC) compliance. In the US, the Financial Crimes Enforcement Network Fincen is the main body regulating the compliance procedure. In the UK, the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) – under the Financial Conduct Authority FCA –  checks the AML compliance.

Similarly, other countries have their own regulatory bodies that ensure that banks and financial institutes (FIs) follow due diligence. 

What about the Old Form of Verification?

The old style of identity verification, known as knowledge-based authentication (KBA) asks personal questions from the user to verify their identity. This process is still used as an alternative. However, this is not considered as safe; information about someone can be found easily through social media. 

In addition, KBA is slow. Answering questions about someone’s pet’s name or their first school can be irritating. People want instant access; one-touch should unlock phone, doors, start a car, give access to the bank account and on and on.

There are several ways verification solution providers help businesses. Since the majority of businesses operate online, they need services that can be integrated into their business through the internet. 

Integrating Verification Solutions

APIs are used extensively to connect business portals with verification solution providers. These are used for desktops and websites. Similarly, plug and play solutions are available for Android and iOS devices. And in case, a company does not have a team of developers then hosted verification solutions are also available. Check out different integration options at Shufti Pro.

The world demands faster services; faster browsing, faster package delivery, and of course faster verification. Solutions such as Shufti Pro that use artificial intelligence and machine learning verify customers in real time. This is especially helpful for businesses since they fear the loss of revenue from the friction that compliance processes create.

Electronic Identification

Global businesses face an additional challenge; they have to comply with regional as well as international regulations. This can get complicated. Not many identification services can truly call themselves global. Accurate compliance rests on exhaustive legal and technical work, integrated with the business process to ensure streamlined and compliant user experience.

Trustworthy services mitigate risk by taking the burden of customer verification from companies. It also helps reduce revenue losses due to ID fraud. Trust increases which creates an aura of safety around the business. People like to do business with companies they trust, which check all the safety boxes. 

Id Verification Services help increase customer retention and acquisition. They also assist with due diligence. What this means is that services check the customer’s identity across different lists to make sure that the person is not a financial risk to the company.   

Documents Verification

An entire universe of documents is used for verification. For instance, Shufti Pro verifies 3000+ different types of documents. Among other tools, we use optical character recognition (OCR) to read and verify documents. It reads documents – including handwritten notes – like a human.

Data Sources

A truly helpful verification solution should be robust in checking a customer’s identity across sanction lists and watch lists. These include, among others; the anti-money laundering list, anti-terrorism, and politically exposed person (PEP) lists. This highlights the growing need for customer identification. Shufti Pro checks a person’s name across 1000+ sanction lists plus 3000+ databases. Its own AML database updates every 15 minutes to ensure the most accurate compliance.  

Bear in mind that the quality and authenticity of the database the verification reliable. For high-risk transactions government, credit, and utility data sources serve the best. For low-risk processes or as a supplement, the solution providers might use consumer sources.

Customer Due Diligence

What is Customer Due Diligence CDD?

Customer due diligence is a process that helps achieve KYC and AML compliance. Background checks, customer identification, and verification are standard diligence procedures.

What is Enhanced Due Diligence EDD?

Sometimes a customer carries additional risk, and plain due diligence just doesn’t cut it. They might need constant monitoring. Some politically exposed individuals (PEPs) fall in this category.

A credible identity verification service should;

  1. Ascertain the identity and location of the potential customer.  This will not only help to know your customer but it will give you an insight into their business. A combination of biometric verification and document verification is effective in achieving that.
  2. Give you clear and concise reporting. If you have to sift through layers upon layers of useless information before you get to what you were looking for, then you might reconsider your decision. 
  3. Alert you if there is a high-risk profile that might need EDD. Also, check if it has the capability of frequent or consistent monitoring.

An aspect that lies in the periphery is third parties that also need to go through CDD. Your business might have partners and collaborators, which have access to your resources. It makes perfect sense to vet them as well. See if your service takes care of ‘know your customer’s customer’ or KYCC.

The difference between KYC and KYCC is minimal. Only the subject changes in KYCC, it’s your customer’s customer under verification check. Verifying; identity, location, the nature of the business, etc. remain the standard. All of these ensure that your partners are not mixing their dirty money in your business.   

To Conclude

Most businesses find it not only convenient but feasible to hire the services of a credible provider regarding compliance. It surely is a steep climb in keeping up with the latest regulatory changes regarding compliance. But, you should do your due diligence on your potential verification service. Find out who their existing clients are. This is generally a good sign of competent service. Check out Shufti Pro’s client portfolio For ID Verification Services.

ID Verification

Age Verification – Must Have For Age Restricted Retailers

Mobile e-commerce makes up for nearly 29% of the entire e-commerce sales in the US. A majority of the millennial users – 86% – make online purchases through their smartphones. Such unrestricted access to products and services online, makes it harder for businesses dealing in age-restricted merchandise to regulate their services. Verifying customers’ age is difficult in person as it is. It reaches a whole different level of challenging for online purchases. In a day and age where a user can access goods online by simply providing genuine credit card details. Making sure the person using them is of the appropriate or legal age is part of the obligations online merchants have to fulfil. Thus, ID verification becomes crucial, particularly so for age-restricted vendors.

A study conducted in the US estimates that nearly 60 per cent of online businesses selling alcohol had negligible age checks in place. However, with the increasing legal obligations to verify customers before selling them goods, online retailers must take into account online age verification for users. Merely entering a date of birth or verifying customers through their social media profiles is no longer enough. Resourceful teenagers have found ways to fool such methods and gain access to amenities like online gaming and alcohol. Industries like pharmaceuticals, alcohol and tobacco industry have incredibly stringent regulations. Not verifying users under 18 can lead to heavy fines, legal ramifications and, most importantly, lead to reputational damage.

ID Verification for Age Restricted Commerce

Different regions around the world, including the UK, have now legislated age verification measures for businesses like gambling, alcohol, tobacco, online dating apps and adult content websites. Different states in the US are now also observing age regulation laws. This has created the need for an effective method for online retailers to verify their users accurately. Online identity verification services can be an adequate solution for verifying the age of their customers.

An age verification solution for online businesses authenticates its users through online ID document verification. The verification software authenticates the user’s age by scanning their date of birth from their ID document. Online merchants can further corroborate their customers’ identities by facial recognition scans.

E-merchants, dealing in age-restricted commerce, are fast realising the need for an effective online ID verification solution in order to prevent underage usage. Some businesses that fall under the bracket of age-restricted commerce and are in need of ID verification services;

  • Pharmaceuticals

Online pharmacies while being a convenience for patients, pose a major risk of being accessed by underage users with a drug habit. There are certain regulatory bodies that manage records of online pharmacies. However, this is not enough to urge them to verify the buyer’s age. Therefore, it becomes imperative for online pharmaceutical companies to make sure whether their customers are of legal age of purchasing prescription drugs. Online age checks can ensure safer business practices for online pharmacies and help them build trust with regional regulatory bodies.

  • Alcohol and Tobacco

Both alcohol and tobacco are stringently regulated globally. The Food and Drug Administration (FDA) in the US prohibited the sale of cigarettes to underage individuals. Similarly, the sale of alcohol is prohibited to anyone under 21 in the US and under 18 in the UK. These laws are as much applicable for online retailers as they are for physical vendors. Appropriate age and identity checks must be observed by online stores before delivering their products.

  • Online Gaming

Children, particularly adolescents, are attracted to online gaming. However, studies show that children are likely to develop problematic playing habits with excessive online gaming. This alone should be enough to convince gaming services to control access to their websites by implementing online age verification. In other instances, online gaming also involves online interaction with players from all over the world. Children can easily fall for a scam, offensive language and even bullying through such unfettered interactions. However, in a lot of countries, children are able to access gaming platforms with simply providing credit card details. Adequate verifying checks must be put in place, particularly for more aggressive or intense games.

  • Gambling

Online gambling has also garnered enough traction over the years. Studies have shown that over 50,000 children under the age of 17 have developed a gambling problem. This problem must be addressed by properly regulating online gambling services. While online betting might seem difficult to regulate, it is up to the platforms running these services to take measures to do so.

 

  • Weapons

With the amount of suggestive content available over the internet, anything nowadays can constitute as a weapon. It is extremely easy to influence children these days as they tend to have access to the internet and mobile devices at all times. Most of the responsibility falls on parental control, however, some of it must be taken up by businesses selling such merchandise ID Verification. This is especially important after the case emerged of a 16-year-old buying a knife off of Amazon and using it to stab a schoolboy. Weapons and firearms must, therefore, be put a stringent check on to regulate their usage.

  • Dating Services

Online dating apps and websites are amongst those online services that have extremely unfettered access. This is particularly disturbing in the light of multiple cases of underage assault have emerged over the years. Both the victims as well as the assailants are found using services like Tinder and Grindr. Governments and regulators are becoming increasingly concerned about such online services, and are pushing owners to implement adequate age checks. It is extremely crucial for online dating services to realise their responsibility in eliminating the disturbing and harmful effects of underage usage of online dating services.

  • Adult Content

The effects of regulation of adult content online can be seen through the enactment of the digital economy act in the UK, which shall be enforced later this year. It requires age verification of users before the distribution and access to adult content.

Age Verification through Online ID Verification

It is evident from the discussion above that access to online goods and services cannot be restricted by mere parental controls. Online businesses must share some of the responsibility in regulating their goods or services. While merchants are able to verify the age of their customers through IDs that are provided by them in person, online vendors find it particularly challenging to verify age online.

Fortunately enough, a SaaS KYC provider like Shufti Pro can offer foolproof age verification services for businesses. Remote verification can be made possible through online ID verification. Shufti Pro’s verification software allows businesses to verify their users through document verification and facial recognition online. Users can scan their ID document remotely through their smartphone or PC camera. The system looks for forged or tampered documents. Its OCR technology can extract data from documents instantly, thereby confirming the age of an individual through their DOB. The vendor can further ask the customer to perform a real-time facial recognition scan that corroborates the identity of the person with the photo provided in the ID. Shufti Pro is able to verify users within 30-60 seconds, allowing no hindrance to the purchase process of goods or services online.

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ID Verification Ensuring Safety Deals in Real Estate Sector

Buying and selling properties for people are major, thought-provoking decisions. It requires weeks, perhaps even months of search, planning and preparation. For people looking to make a solid and long term investment, it is even more important for a person to be more circumspect. The process of acquiring a property can be unbelievably long and tedious. More than anything, it is important to vet both the buyer and the seller in the process. Online ID verification is one process that makes this whole process easier and smoother for both the client as well as the agent.

Since the industry involves high-value transactions, there as an equally high chance of fraud, shady deals and other financial crimes involved. The signing of real estate deals requires signatures on different legal documents that clearly and properly ensure the transfer of ownership. One of the most legitimate concerns that surround real estate deals is money laundering. Financial regulators all around the world have doubled their efforts to curb terrorist financing and money laundering activities.

The Threat of Money Laundering

The real estate market has long been used to hide illicit money that has been gained through corruption, tax evasion, bribery or other similar means. Criminals end up hiding their money through shell corporations that are listed as owners of luxury properties, thereby effectively hiding money that is used further to fund terror cells. This ominous source of money laundering has prompted governments and regulators around the world to increase their scrutiny on the real estate sector as well.

In London alone, 36,342 properties were listed under offshore companies in 2015. World over, there are major luxury properties that are bought and managed by shell corporations. Other reports also indicate that more than £180 million of London’s properties were bought as a result of criminal proceedings. Other locations around the world including New York City, Florida, California and Canada are also attractive havens for money launderers to hide their money through high-value real estate deals. To combat the illicit bought up of high-value properties, certain regulatory authorities around the world are increasing regulations for real estate companies. These regulations around the world have prompted dealers and agents to verify and authenticate both parties in a real estate transaction before completing the sale.

However, it is not only the threat of money laundering that increases the risk of real estate transactions. Identity theft is another crime that is penetrating the real estate market. Fraudsters commit identity fraud by impersonating a property’s owner and by selling it to gain financial benefits for themselves. It, therefore, becomes the responsibility of a real estate agent or company to vet both the buyers as well as the seller before proceeding to sell a property.

Frauds and Scams in the Real Estate Sector

It is not just money laundering that has affected the real estate sector. An increasing number of scams and frauds are also becoming common in the industry. The victims of such frauds end up losing millions of dollars to such frauds and are often deprived of their life long savings. One of the ways to protect oneself from such scams is to be able to identify them effectively. Some useful ways to identify real estate scams involve;

  • Transactions that require money to be wired overseas and no possible way of contacting or meeting the person(s) receiving the money.
  • Sudden changes in address or other credentials, particularly contact details. Such details may not be received beforehand by the buyer.
  • Requests to transfer money to a different bank account(s) than the ones normally used by the client or selling party. One of the major giveaways may be that the account is offshore.
  • The buyer or seller suddenly starts using generic e-mail addresses instead of official ones.
  • The seller makes haste to sell the property giving reasons that cannot be corroborated.

All these and other simple yet obvious signs often point towards a shady deal, that should be investigated further. On suspicion of fraud, such deals must also be reported to the relevant authorities for them to take the appropriate action.

Scammers end up posing as owners of a property and selling it under the same pretence. The original owner of the property can remain oblivious for months as hardly many people check the status of their properties all too often.

Are Scams and Crimes Avoidable in the Real Estate Sector?

Frauds, scams and financial crimes that are associated with the real estate sector are entirely avoidable and preventable with certain precautions and preventive measures. Some of the few measures that can be taken to avoid scams include;

  1. Make sure when buying a property you are contacting the actual owner. Also, make sure to insist upon meeting the seller in person. If a meeting is unable to be arranged, at least try and speak to them via a video conference or a phone call. In certain cases, you may be dealing with a person who has a Power of Attorney to handle the property. In others, you may be dealing with an executor of the estate or a person who has a court order to execute a sale. In all cases, make sure you at least know who the buyer is.
  2. Real estate companies must make sure their employees and agents are well aware of common scams and frauds ( ID Verification ) that are prevalent in the real estate sector. They should take measures to educate employees of different techniques used by criminals and fraudsters to use properties to hide their money. Awareness lectures must be given to employees to make sure they know about typical phishing and social engineering scams.
  3. Another certain way to avoid real estate frauds is to verify both the parties in a real estate transaction. It is up to the real estate company to ensure that entities on both ends of a transaction are legitimate and have authentic credentials. People on either end of a transaction may be using forged or stolen details. It is therefore essential for real estate companies to use a reliable KYC (Know Your Customer) service that can effectively verify users’ identities.
  4. Real estate agents must also verify the authenticity of the property documents provided by the seller and make sure they are in order. All such documents must be checked to make sure there are no errors or misrepresentations. All documents must be in order and clearly legible.
  5. Special care must be taken if either of the two parties in the transaction is overseas. All deals that avoid face to face contact with the owner or other relevant parties must be avoided.
  6. Similar measures must be taken by mortgage providers to ensure the identities of property owners seeking loans. Tenants must also be verified before the leasing of properties.

The Need for Frictionless ID Verification Solutions in Real Estate

Real estate deals are drawn out and tedious as it is. In order to reduce friction in the entire process, businesses must make sure to make the procedure as simpler and faster as they can. Individually collecting and verifying all documents can be tiresome and unnecessarily lengthy. With the help of digitised user verification procedure, as provided by Shufti Pro, real estate companies can authenticate buyers and sellers instantly. The procedure involves ID verification of both parties through ID document verification. This enables them to ensure that they are using authentic credentials to make the sale or purchase.

A number of different documents can be used to verify the identity of a person including ID cards, driver’s licenses, passports or any other form of government-issued IDs. The real estate provider can choose to verify the buyer and seller with the document(s) they prefer and proceed to authenticate the sale accordingly.

Parties to a real estate deal can be further authenticated using biometric facial verification. Facial recognition online can be performed through a facial recognition software that has features like liveness detection and 3D mapping that makes it harder for scammers to spoof the system.

To counter fraud in the real estate sector the online identity verification service presents itself as the perfect solution. Shufti Pro’s ID verification software uses a hybrid technology of AI and Human Intelligence to verify users within 30-60 seconds. It uses OCR (Optical Character Recognition) technology to extract user data and processes it accurately. This decreases the chances of human error that comes with manual verification methods. The system can obtain client details from their documents to save them the trouble of entering them every time for a process.

ID verification services from Shufti Pro can be used by real estate providers in a number of ways including the processing of transactions, locating properties, detecting and preventing identity fraud, performing in-depth due diligence of customers and complying with regulatory measures. Shufti Pro is focused on providing top of the line online ID verification services to its clients. It caters to a wide clientele base including the real estate sector. Through its AI enabled ID verification service, it can verify users from over 230 countries. Its face recognition ID verification services allows businesses to authenticate their users beyond a doubt. Through its AML background screening, businesses can screen their customers through global AML sanction lists, that allows them to eliminate the risk of money laundering and other financial crimes.

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How the Rise of ID Verification Promises Trillions of Dollars for Online Marketplace?

The affliction of cybercrimes and online frauds has reached such high proportions that the cost of it left the billion figure years ago and the damages have now entered trillions of dollars. Cybercrime ended up costing $3 trillion dollars to the commercial sector in 2015. This number is expected to cross $6 trillion by 2021. More to the fact that cybercrimes are the fastest growing crimes in the US; in that, fraudsters are increasingly enhancing and advancing ways to compromise a business’s cybersecurity measures. All these figures and the gravity of the situation requires enterprises and governments to take a more proactive than reactive approach to avert frauds and cyber attacks. The rise of ID verification systems, in particular, can play an important role in having a productive economic impact for businesses by not just helping to curb fraud but also reducing expenditures.

However, fraud prevention is not the only plus side of having an identity verification system. An online identification system can help reduce costs, ultimately increasing revenues for a business. It also enables businesses to meet their compliance and regulatory requirement, which they are bound to fulfil by law. Thus, identification systems can potentially save trillions of dollars for the online marketplace.

A Decrease in Transactional and Admin Costs

Both the financial services sector, as well as commercial businesses, have generally relied on outdated manual or legacy systems for transactions and payment systems. Such methods are costly and, not to mention, unsafe considering the current fraud landscape. Compared with digital identity systems, in-person identity verification can also be costly for the business as well as the consumer. For instance, if a person wishing to open a bank account needs to present a certain set of identity documents for the bank to ensure that the person has legitimate and verifiable credentials. Having to verify their identity in-person has both time and monetary costs for a consumer, not to mention that each visit costs the financial institute $4.25. Compared to this, a digital identification system allows a person to authenticate their document and other credentials electronically, thus saving them both time and money Not to mention the fact that a single mobile transaction costs only $0.10. Thus, the customer onboarding process can be made more efficient through an automated ID verification service. Eliminating the need for paper-based verification procedures for each individual client, it can greatly reduce the time for onboarding a new customer.

Preventing Fraud Through ID Verification

As discussed above, online frauds are the bane of an online enterprise or a financial institution’s existence. The sort of losses they incur to businesses can be detrimental. The costs of identity theft alone were reaching $221 billion worldwide. The financial sector or the online market cannot afford such losses. A sound online identification system, being fast and effective, can allow a business to detect fraud while it takes place, thus preventing any chargebacks or fines. A bank or financial institute can verify their clients during the onboarding process and make sure they have legitimate documents and other credentials. For an online business, an identity verification system allows merchants to identify fraudsters who are using fake or stolen credit cards or identity documents.

Another major fraud risk is synthetic identity fraud, wherein the criminal generally uses someone’s social security number to build an identity for him/herself. An effective ID verification software can also alleviate synthetic identity fraud. Also, by increasing cooperation between national databases and the private sector can help eliminate the use of fake credentials and identities altogether.

Reducing Compliance Costs

Sectors that are closely regulated including the financial services sector, online payment systems and the healthcare industry. In an effort to develop a framework that meets their regulatory obligations, they have to invest in ample resources. However, with slow and ineffective ID verification systems, their compliance costs are only susceptible to increase. Such businesses are not only in need of preventing fraud and reducing transactional and onboarding costs, but they are also legally bound to fulfil certain compliance requirements. Governments and regulatory authorities issue guidelines for businesses to implement in order to curb financial crimes like money laundering. Such obligations need to be fulfilled by businesses efficiently.

The financial services sector spends greatly on building effective compliance structures. However, manual procedures for verification have proven to be ineffective and slow. Implementing an automated system for customer due diligence and anti-money laundering (AML) compliance can not only reduce costs for businesses but also effectively reduce financial crimes.

It is also prudent to mention that companies that fail to implement adequate KYC and AML procedures have to face hefty fines from regulatory bodies, both national and international. Thus, implementing an effective online ID verification system can avoid these costs for a business as well.

Shufti Pro is a SaaS product that focuses on providing a quality ID verification system to businesses. Its online ID verification system allows you to verify customers through document verification, face recognition and AML screening checks. It provides real-time verification results through AI-based protocols.

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How ID Verification via OCR can transform Digital World?

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 Pro 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 Pro 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 Pro. For an e-commerce and other online payment websites, Shufti Pro can even verify

  • Credit Cards
  • Debit Cards

Shufti Pro 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 Pro customers.

OCR Technology for ID Verification

Effortless verification procedures are the main USP of Shufti Pro 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 Pro’s verification iFrame. After that, Shufti Pro will do its magic.

After personal information is extracted by OCR technology from an official document, Shufti Pro’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 Pro for verification. So, Shufti Pro 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 Pro, 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 Pro will help perfect identity verification processes for Shufti Pro customers and end-users who will have to undergo identity verification processes for authentication of their personal information.

AI quickens verification Process

Shufti Pro 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 Pro 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 Pro 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 Pro 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 Pro verification system becomes smarter, favoring its customer for their continued loyalty to Shufti Pro verification services. KYC verification and other forms of identity verification become entirely risk-free with Shufti Pro 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 Pro 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 Pro 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 Pro can even provide AML compliance to its customers as well. Shufti Pro 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 Pro 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 Pro to integrate a highly efficient online id verification system with their pre-existing digital resources. As explained earlier on, Shufti Pro 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 Pro 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 Pro, 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 Pro, online businesses can be rest assured that no other solution can provide verification status for their incoming traffic as quick as Shufti Pro.

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

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Crowd Funding

The Importance of Know Your Customer for Crowd Funding and ID Verification Service

In today’s world where most business and financial transactions are taking place online, the importance of knowing who exactly you’re dealing with has become essential. Not only since governments and regulatory authorities have implemented this requirement, but also to safeguard one’s business and financial interests. This is even more important when it comes to crowdfunding where potentially anyone can be an investor or a donor. The importance of knowing the background of who is sending the money and where specifically their money is coming from is of the utmost importance. The role of a ID verification service cannot be stressed enough in this scenario. Although, crowdfunding is not as regulated as other financial areas, steps are already being taken to ensure that it is. Before that happens organisations need to make sure that they are prepared. We will look at the concept of crowdfunding and the reasons behind the increase in regulations.

What is Crowdfunding?

Imagine you have a certain task or idea that you wish to bring in to fruition, there is just one catch you don’t have the money or resources. What would you do? Most people would go to a bank or a finance company to get a loan or maybe borrow from someone if the amount isn’t unreasonable. These days, however, there is another way you can get the funding you need. The way is crowdfunding, also known as crowd-sourcing, to finance your project and that too online. Through it you literally ask people to support your cause, project or idea and people donate, invest or lend you the money. For example, if you need $10k it would be difficult to get that amount from maybe a single individual, but if a thousand people were to give you $10 each then you could reach your financial goal quite easily. That is exactly what crowdfunding allows; the specialized platforms and sites that support it, have thousands of people who would fund you if it piques their interest or if you can offer them something in return.

Crowdfunding in itself is not a new concept. Without going into the history of it; it was done manually before it even reached the world of the Internet. For example in the US, presidential candidates rely on crowdfunding to support their campaigns and have been doing so for many decades. In fact many people relied on and still rely on crowd-sourcing to build hospitals, educational institutions and other projects to benefit humanity. The amazing part is all this was happening way before it became a popular financing method online.

Although there are several types of crowd-sourcing, we will use two examples to elaborate the role of — Know Your Customer, ID verification service and fraud prevention services. The two examples are ICO for cryptocurrencies and donation-based ones that are usually given with no expectation of return.

Risks and Threats Associated with Crowdfunding

There are several drawbacks to unregulated online crowdfunding. The first is the risk of fraud and this happens more often than you think especially during ICOs (Initial Coin/Crypto Offering) that are held by various cryptocurrency providers. In initial coin offerings people fund or purchase tokens or coins as they are more regularly referred to. If there isn’t a fraud prevention service such as Shufti Pro integrated then the purchasers that have used a credit card or debit card can later cry wolf and say that they never carried out the transaction. This results in charge backs and loss for the cryptocurrency provider.

The second threat is money laundering. People have been using crowdsourcing platforms to

launder money. This is due to the lack of proper Know Your Customer processes and id verification service. They often get away with this crime and when they do get caught by other means, all the venues they used to launder money including the crowdfunding platform is brought under investigation. To put in to perspective the severity of this threat, imagine what would happen if it was ever found out that the presidential campaign of the current US president was funded by laundered money. What would happen to the reputation of that president and the overall trust that people have in him? Luckily campaign funders are required to go through a KYC process that includes comprehensive background checks.

The third threat which is most critical in the post 9/11 era is that crowdsourcing platforms can be made a basis for finance terrorism and without proper ID verification service these financiers can be hard to identify and catch.

ID Verification Service and Fraud Prevention Service to the Rescue

Realising these hard facts, platforms that provide crowdsourcing service and cryptocurrency providers that carry out ICOs have turned to specialist companies for ID verification service and fraud prevention services. These companies have the software, hardware and expertise to provide real time as well as offline verification of an individual’s identity. They also offer proof of purchase in the form of recorded verification videos that can be accessed by crowdfunding platforms or ICO providers. Hence, any potential charge-backs can be deterred and/or disputed. In a worst case scenario the complete verified information of the individual is there so that they can be traced if required. These service providers also counter identity thefts and usually have databases that are ultra secure. So platforms and website owners can have peace of mind that their customer’s data is in safe hands.

Selecting an ID Verification Service

Having mentioned the value of verification service it must be said that not all companies offering fraud prevention services are the same. Companies understand that customers usually do not like waiting on or going through long KYC processes. That is why it is important that these platforms take on a company that gets the verifications done in minimum time and that too in seconds.

Most verification companies boast about implementing machine learning and advanced AI systems to catch documentation fraud, identity theft, real-time liveness verification, etc. But the better ones go the extra mile and offer a hybrid solution that includes a backup of human intelligence on top of the AI. This adds a time tested human touch to reverify the entire process and all this is done in seconds as well.

Also, given all the attention about user data privacy there are a lot of new regulations that are being launched. In order to avoid any fines or issues because of these new laws it is important that crowdfunding sites thoroughly check the ID verification service provider. They should be up to the mark with regard to compliance with all such rules and regulations.

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