Singapore replaces passwords and ID documents with facial recognition systems

Singapore replaces passwords and ID documents with facial recognition systems

As reported by Strait Times, Singapore plans to replace passwords and identity documents with biometrics to verify identities and initiate transactions. This is a part of Singapore’s national facial identification service.

Government agencies and financial institutions will set up booths to enable Singaporeans above the age of 15 to scan their faces for immediate verification. Elderly people and overseas citizens, however, will be able to scan their faces using the SingPass Mobile app. According to the report, the new technology has the ability to prevent spoofing and identity theft as well.

Since 2018, the SingPass Mobile application has supported fingerprint and facial recognition for local use. It was later announced that the country wants to use facial recognition as part of its National Digital Identity (NDI) system the same year, followed by fingerprint and voice recognition. The Singapore National Employers Federation and insurer NTUC Income is constantly carrying out tests on SingPass Mobile for online services. 

The Minister for the PM’s Smart Nations Initiative, Dr. Vivian Balakrishnan, announced that the new incorporation to the country’s national identity system is vital for the country’s prosperity. He further stated that the agenda is to facilitate more business entities to reap the benefits of the digital infrastructure built by the government. Banks and financial institutions might be able to use the resource to carry out high-risk transactions online, such as money transfers of more than $10,000. In the future, the service might be used to identify customers in buildings and hotels.

The Smart Nation and Digital Government Office (SNDGO) stated that one of the advantages of the government-backed facial recognition service is that users’ biometric data will not be leaked or shared with anyone, including private organizations. However, the users can still choose to enter passwords or use identity documents if they oppose having their faces scanned. Strict data protection and management protocols are in place and identification of individuals will only be carried out when necessary, such as during law enforcement and in finding missing individuals.

Singapore has pledged to invest in biometric technology as one of the top areas of artificial intelligence research aimed to drive social and economic development.

7 Trends in Identity Verification Solutions to look for in 2020

7 Trends in Identity Verification Solutions to look for in 2020

Internet is an anonymous space where people can hide their identities and come up with bizarre pseudo names. With the increasing online services, identifying identities digitally is becoming crucial than ever before. But verification should be done in a way that does not impact the user’s experience. Security has become the topic of utmost interest for all businesses due to the increasing number of recent high-profile data breaches that have affected millions of consumers and organizations. Identifying individuals online is an essential component of KYC and AML regulations as well. Organizations can benefit from remaining compliant by having proper identity verification checks in place. It also increases customer confidence in the business that they are taking proper measures to protect their private data. 

As identity thieves are becoming more sophisticated, organizations are arming themselves with technologies to protect themselves against viruses, malware, and other frauds.  Identity authentication technology has evolved using biometrics as a stronger security measure to fight back fraudulent activities. As well as unequivocally answer the question that the customer is who he says he is before starting to deal with him. 

The Rise of Identity Verification Solution for businesses

As financial frauds are clamping up, the demand for identity verification technology is also increasing. 50% of stolen identities were reported to be used in various business crimes in recent years.  According to a report, UK based company lost £1.2 billion falling in the pit of frauds last year.  The identity verification market is expected to reach $12.8 billion by 2024 at the Compound Annual Growth Rate (CAGR) of 16.0% during the upcoming period. As many businesses have drowned and faced major losses due to falling in such frauds so having proper ID check is a must-have. The digitizing of the world has bought so many scams to light and urged businesses to take stringent measures for cybersecurity. Digital communications are preferred as no one has time for face to face interactions so is the case with identity checks. Manual identity verification requires a lot of time and is now a thing of the past. 

The presence of users on the internet has significantly raised the number of digital frauds, causing millions of losses for individuals and businesses every year. Regulatory authorities have made it mandatory for every business to have sound identity authentication checks integrated into their system to put a halt on money laundering, identity theft, financing of terrorists, etc. KYC (know your customer) regulations are there to know who exactly you are dealing with, by verifying their original documents, address, and biometrics.  AML (anti-money laundering) regulations around the world have placed stringent compliance regulations on the investment companies as well as other financial institutions. 

Trends in Identity Verification

Some of the latest trends in this technology are taking it to new heights. Here are the top trends in this technology that are changing the ID verification sphere: 

  • KBA is Moving Out

The authentication process by having possession over data is no longer considered a sufficient solution. KBA and SSN verification are going out of the picture as they are proving to be a week security system. Recent data leaks have also validated this fact. So businesses are looking for better solutions to perform authentication methods. A phone number to identify allows a business to authenticate the user accessing a system and halting fraudsters from using leaked data. 

  • Comprehensive Integration:

Financial institutes are becoming aware of the need for systems to fully integrate with financial institutes existing core technologies. Most of the businesses are not considering alterations in their core processors, finding it way too expensive. But latest identity verification solutions do not require any additional hardware to be installed. They can be easily integrated with the current processors cutting short the cost for businesses. ID verification system can easily be integrated and does not create bugs that are formed due to incompatibility issues upon implementation. The time required for diminishing such bugs out of the system is also saved. As time is money for businesses so this technology is both time and cost-effective.

  • Biometric Technology

Biometric verification is not just a buzzword in identity verification but this technology is a milestone achieved in mitigating risks of forgery and scams. By identifying a person through his unique facial features or fingerprints, fraudsters can be authenticated before giving access to the system. It is becoming increasingly powerful with every new iteration. Biometric technology, depending on applications, allows a user to authenticate himself using geolocation, fingerprints, iris scan, face recognition, and other biometrics that are unique to a person.  

This technology is becoming more prevalent. Face verification technology provides seamless authentication just like taking a ‘selfie’. No contact or additional hardware is required in this. That is why it is being widely adopted. 3D liveness detection adds an extra layer of security. Liveness Detection is a process that assures the live physical facial presence of a person is validated at the time of biometric authentication. It is an anti-spoofing measure to fight back all kinds of frauds to deceive such a system. This technology is vetted and became mainstream in identity verification solutions to ensure greater accuracy without using additional technology. 

  • Two Factor Authentication

Securing your systems with passwords only is known for years but we know these can be cracked easily in this digitized world. It is even difficult to memorize and change passwords frequently. It has become a fantasy that only strong passwords can now protect us, as hackers regularly breaking into the systems and releasing passwords. As our accounts are interconnected by Emails, it becomes easy for hackers to crack the password of one and gain access on all. So the solution for it is two-factor authentication, which lets a user know when someone is trying to gain access on any of their accounts. Like Gmail account is asking you every time you are signing in from different browsers if it was you. The basic idea is just a secure second option that authenticates without making it inconvenient for the user. It’s easy adding your mobile number and add a secret code sent to you every time you are logging in. It is instant and adds an extra layer of security making it difficult for scammers to get access. 

  • Consumer Concern Drives for Change

Identity theft, credit card frauds, account takeover, and many other scams are the biggest concerns of businesses such as banks as well as consumers falling victim to it. According to FICO, ID theft costs businesses around 16.8 billion dollars each year, so it is the top concern of financial institutes as well. More effective identity verification solutions are being used to meet the security-conscious market demands against fraudsters. If the security threats are on the rise, new advancements in ID verification technologies are on the heels. These trends will equate a more secure online sphere, which will result in benefits for both businesses and consumers. 

  • Blockchain Technology for Data Storage

No matter how advanced identity verification solution is being used, one eminent question remains there that where is the private data of a consumer is being stored to make it out of criminals’ reach. One recent answer in this regard is blockchain technology. Blockchain is a secure distributed database where no single entity has all the data.  Blocks of data are added to embed the private data safely. 

  • Automation will continue to be Gold

Identity verification solutions perform the process in real-time without using any tam effort. Adding automation to the procedure enhances user experience as now they will not have to wait for days just to get verified. It becomes frustrating for clients at times and ultimately they end up leaving the platform. It is also beneficial for businesses as it saves their time and labor resulting in lower costs. 

What to expect from Booming Identity Verification Market in 2020?

What to expect from Booming Identity Verification Market in 2020?

Technologies hatched by fourth industrial revolution such as the Internet of Things (IoT), robotics, virtual reality (VR) and artificial intelligence (AI) are changing the trends in marketing and revolutionizing the way we deal in every sector. The same is the case with businesses. These revolutions have changed the way one does business. The fourth industrial revolution including Artificial intelligence augmented reality, robotics has bought a lot of digitizing on the table. This automation has eased many processes that used to take days previously but now can be done in the blink of the eye. Identity verification is one of those procedures that can now be done digitally saving a lot of time and effort. It involves a systemic change across many sectors and sides of the business. 

AI-powered Identity verification solutions include biometric verification, digital document verification, 2-Factor authentication, and age verification that help fight many frauds in the business sector.  The identity verification industry is expected to reach USD 18.12 billion by 2027 as it grew steadily in recent years. Authenticating identities is important for financial institutes globally. To protect a business from cybercrimes, money laundering, account takeover, and identity theft frauds it is mandatory to have a sound identity verification solution integrated into the system. Financial criminals are becoming more sophisticated with the passage of time their game is getting strong. Identity authentication of customers and completing due diligence has never been more difficult or more important. 

What is Identity Verification- A Deep Dive:

Customers and businesses communicate digitally in this digitized world. In this busy world, no one has time for face-to-face meetings or direct contact neither it is considered as a suitable option. Manual authentication trends for physical confirmation of an individual are long forgotten due to the time they take. Digital identity verification technology is now used to verify the individual by facial recognition technology, address verification, document verification done digitally in seconds. The significant increase in digital fraud has caused the loss of millions for individuals and businesses. Businesses are always the easy target of cybercriminals and fraudsters. Customer identity verification KYC as well as business verification KYB is essential to save businesses from intruders and scammers.

Types of Identity Verification Solution:

Following are the types of digital identity verification solutions:

  • Biometric  Verification Solutions:

The biometric authentication system is designed to perform due diligence on the customers by using one type of biometrics – face verification. Facial verification scans the face in real-time and detects unique facial features through a 3D depth perception technique. 

The liveness detection system captures minor facial movements to ensure that an original person is making the verifications. Liveness detection ensures that a paper backed or photoshopped image is not used for verification. Facial verification delivers highly accurate results and that too swiftly, within seconds. It makes fraud prevention and KYC/AML compliance quite easier for the people. 

  • Document Verification:

Digital document verification scans the document picture using OCR technology, the information can be taken from the document. It also authenticates if the document is real and original. By this customer’s authentication can be performed without putting them on a frustrating wait of days. 

  • Address Verification:

Establish proof of residence for verified deliveries and user identity. It scans utility bills, bank statements, etc by using OCR data extraction.

  • 2-Factor Authentication

Verify authorized users remotely through their mobile phones. It provides quick remote user authentication by sending Personalized code fro verification. It is an auto-code generator to provide user access.

  • KYC and KYB Checks:

KYC is essential for businesses and organizations as per regulatory authorities. KYB is also important when dealing with other businesses for the partnership to make sure the other business is a valid company and not a shell company.  These days there are some serious digital security concerns for all sorts of businesses because of scams like digital fraudulent activities, data breaches, and ID theft are on the rise and abusing the systems easily. Such activities are translating a significant revenue loss for the businesses that fall victim to these criminal activities. 

  • AML Screening:

AML screening is a process that defines the role that how a company monitors accounts, detects and reports financial crimes to relevant authorities. AML screening tackles intrinsic money laundering risks the company faces or can face. Customer Screening for Anti-Money Laundering (AML) is the aim of completing due diligence to prevent and deter money laundering, terrorist financing, and other financial crime and fraud. It ensures that no one from the PEP list or with criminal background is becoming part of a business. 

Factors fueling the growth of ID verification market:

Following are the factors that are greasing the wheels of digital ID verification market:

  • Increasing Data Breaches:

It will not be an exaggeration to say that 2019 was a year of data breaches. During the first nine months of 2019, around 7.9 billion records have been compromised according to Risk-based Security Reseach and are expected to be 8.5 billion in the whole year. As per statistics, these numbers are up 112% as compared to mid-year 2018. To mitigate the risk of data breaches it is crucial for any business to give access to the right person only to the sensitive data.

  • Stringent Compliances:

According to the Bank Secrecy Act (BSA) act and the patriot act 2001  KYC is mandatory for banks to know who they are dealing with. The same goes for AML directives for combating the financing of terrorists (CFT) and to hinder money laundering. KYC and AML checks are necessary for financial institutes to perform. It provides a win-win situation for both businesses and customers by filtering high-risk customers for businesses and verifying customers in real-time.

  • Enhanced customer experience

Digital ID verification solutions eliminate the annoying pile of paperwork making the business one step ahead and more customer-friendly. Customers will appreciate your attention to safeguarding their identity, building rapport, and brand loyalty that too in real-time. Replacing traditional checks with face verification saves a lot of time and effort. You do not need to memorize or change passwords since the work is being done by your biometrics in lesser time. 

  • Increased Security for Rising Scams :

It’s more important than ever to verify the identities of customers due to an increased risk of terrorist funding and money laundering in this digitized world. ID verification technology is a great tool to instantly verify the identity of any visitor quickly and easily, making both customers and employees feel safer. It fightbacks forgery like account takeover, fake identity, identity theft, credit card fraud, etc. 

  • Easy Integration in System:

Identity verification solutions have another advantage for businesses and that is it can be easily integrated into the system. No additional hardware is required at times for these verification solutions such as for face verification technology. This provides businesses with an edge providing another reason to adhere to this technology.

Taking into account these problems, every business wants to protect itself from fraudsters, saving them time and cost for fulfilling the orders of customers who don’t exist, henceforth preventing them from accessing the business and carrying their illicit activities. The use of digital verification services is a safer and cheaper solution in the long run with real-time verification results. The ID verification and authentication solutions are quite vigilant solutions for businesses since they make it easy for organizations to achieve a secure customer base while enhancing the customer experience as well. These are the reasons why businesses are adhering to these technologies making the ID verification market boom tremendously. 

Embedding online identity verification methods for enterprise security

Embedding online identity verification methods for enterprise security

The internet knows a lot about us now. And businesses are using this information to verify our digital identities. However, not all of this information is correct or publicly available. As more and more activity finds its way online, identity checks are becoming relevant to the establishment of secure platforms for individual and business transactions. 

The risk of online fraud and ID theft is real, with a rising demand for online risk mitigation. Enterprises must look into variable security information platforms to enhance security solutions across the board. Trends in identity verification depict high levels of growth, with the value of the market to grow to US$4.4 billion by the year 2027. 

The introduction of AI tools have opened up online identity verification systems to offer faster data  processing, compilation and assessment solutions. Technology is making swift advancements in detecting anomalies and catching fraud. However, as a final check, human experts still manage to provide valuable supervision to machine algorithms for higher accuracy and verification of user data. 

Online Identity Verification Solutions for KYC, KYB and AML compliance

To verify if a user is actually who they say they are, real life identity verification for online applications employ a great deal of automation as well as data analytics to implement identity theft protection methods.

Here’s a list of some of the most successful and commonly used verification methods:

Biometric authentication through face verification and liveness detection

The use of biometric features for authentication involves the use of unique biological characteristics to verify end-users. Presenting face, fingerprint, iris, voice or other behavioural metrics to ensure their live presence is a highly convenient and secure way to authorise login. As use cases spread to a large number of consumer services including healthcare, travel, and retail, customers are looking for identity solutions that can easily be integrated into smartphones. Cost effective solutions such as taking a simple selfie or presenting a card to a camera are being accepted by large digital audiences. 

Through cross device authentication services, customers can use a hand-held device to capture a video or a selfie and confirm their presence. An automated procedure fast-tracks the process and authenticates account holders with high accuracy. Advanced Identity verification applications powered by machine learning are also recording verification processes in real-time and storing the data in the form of timestamps, videos, IP location and device information. 

Document Verification

Digital verification methods can replace manual checking of customer documents to prevent online theft and ID fraud. The more customer attributes that can be verified through a given ID source, the more robust the authentication. The end goal is to achieve a high level of verification assurance across multiple systems and countries. 

Customers can scan ID documents in front of a webcam and allow verification APIs to extract and screen key customer credentials. In most cases, the use of optical character recognition technology (OCR) assists in providing verifications for several documents in different languages. 

Document validation includes checking: 

  • Full name of end-user
  • Photoshopped/tampered documents
  • Document expiry
  • Document format type
  • Address format

Address Verification

The authenticity of individuals and businesses can be verified in real-time using automated software that cross-checks addresses with official databases. Users are asked to upload photos while holding identity documents in order to match their face. Secondary documents containing official address are uploaded to verify the information entered by the user. Analysis is done via an API and the verification is also recorded. 

For e-commerce and other retail business, this translates into better management of chargeback fraud and improved reputation. Mailing costs associated with returned mail can be mitigated and high quality address data maintained for faster delivery time. Identity documents such as national IDs, utility bills, bank statements, and driver’s license, are verified for authenticity, to improve customer risk profiling and online identity fraud management. 

AML Screening

Businesses must ensure a high level of safety by vetting both individual customers as well as businesses before beginning transactions. International regulations now require that sources that may be involved in money laundering and terrorist financing be actively avoided and screened before onboarding.

Detailed background checks and sanction list monitoring for high-risk clients is a given for AML compliance programs. Simply entering the name and date of birth can reveal useful information about authenticity. Data on customers and businesses must be screened against international regulatory watchlists, sanction lists and PEP lists to ensure compliance with laws and regulations. Risk reporting and global compliance is made easier with AML solutions for fraud prevention. 

Ongoing AML monitoring is an essential part of process, as regular monitoring of clients assures that no illegal activity is recorded in recurring transactions. This is to ensure that client credibility is maintained over time and high-risk clients are marked with an ‘on-alert’ status.

Companies can be validated using a registration number in order to identify blacklisted entities. Background checks of the Ultimate Beneficial Owners (UBOs) can help in identifying individuals with a suspicious profile. As a long term business goal, financial risk assessment is improved by limiting compliance fines and penalties leading to unanticipated financial loss. 

Knowledge based authentication

This method of online identification requires customers to protect sensitive information with security questions that can be answered using personally identifiable information.

It is an easy process to employ since it doesn’t contain complex passwords or codes to remember. However, it is also easier to breach since such information can be guessed, discovered or sold. There’s no verification with official customer IDs either. 

2FA Authentication

As an added layer of security, 2FA solidifies account protection by double checking the possession of sensitive information by clients. A physical token or a numerical SMS code must be immediately available to the customer through personally held devices to gain access to online accounts. 

Passwords are losing their authority as a security measure for fraud prevention. Hackers can breach accounts using weak or easy-to-guess passwords and gain malicious access through single layer security methods. Customers are advised to create long passwords with complex characters to lower the probability of a breach. This hurts customer experience and often makes the login process tedious. 

Authorised customer account access through two-step authentication method includes the following steps: 

  • End-user is sent a personalised, auto-generated code at each log-in attempt
  • Authentication code is required to enter the code at login
  • API matches code and completes user verification 

Two-step online identity verification services provide a way for companies to manage financial loss for end-user accounts without compromising customer experience. Malware activity and phishing attacks can be prevented by strengthening security laters.

Why does ID verification fail?

Why does ID verification fail?

In KYC regulated industries, the need for identity verification is clear; i.e. regulatory requirement. In non-KYC regulated industries, identity verification is primarily used for fraud prevention, building trust, and increasing security for both customers and businesses.

It was probably not a long time ago you verified your identity online to either open a bank account or shop online or perhaps perform a transaction. The technology is so prevalent now that it is no longer restricted to banking but has become a necessity to manage workflows and avoid fraud.

Oftentimes verification attempt fails, which is very agitating for the end-user and the businesses concurrently. There can be multiple reasons for the failure. While system errors and glitches are common, issues in internet connectivity also result in verification failure. However, most of the times you couldn’t identify the reason for unsuccessful verification. 

In such cases, you can refer to this guide and find out the exact cause of failure. The following are the possible reasons why your attempt in different types of verification fails despite following the procedure.

Reasons for rejection in Document Verification

1. Name, Date of Birth, and Nationality doesn’t match the details provided

In some cases, the user misspells or enters wrong details in a hurry and it doesn’t match with information extracted from the ID document.

2. ID document is not an accepted type

Shufti Pro accepts authentic identity documents for verification such as government-issued id cards, passports, and driver licenses. For the list of accepted IDs, kindly refer to the supported identity documents.

3. Picture of the uploaded ID document is not clear

The uploaded photo must display a complete, readable, and color image of the document. The image needs to be of the physical document if a user uploads a screenshot or displays a picture from another screen, it’s rejected.

Another reason for verification failure is unclear information on the document. Common issues are:

  • Light obstructing information
  • Blurry image
  • Full document not visible, i.e. hiding some piece of information

4. The document is punched or expired

 The user’s proof of ID shouldn’t be expired or canceled. Both punched and expired documents are rejected.

 Reasons for rejection in Face Verification

1. The face is not visible

The most common cause why face verification fails is that the selfie and image on the ID document aren’t matching. It could be due to one of the following reasons:

  • Either selfie or document image isn’t visible
  • A cropped, forged or photoshopped image is uploaded instead of a selfie.
  • User is wearing glasses
  • The background is too bright, which fades the user’s face

2. The selfie doesn’t match the identity document

 If the selfie uploaded by the user doesn’t match the image on the document the user isn’t verified.

Reasons for rejection in Address Verification

1. Proof of address is older than 3 months

For verification of address, the user should submit a document that is not older than three months. If the document isn’t older than 3 months and still verification is not accepted, the user should ensure that the timestamp mentioned on the document is visible.

2. The address isn’t matching

The address written on the proof of address document should match the one on the ID document, in case of a mismatch address verification fails.

3. Image of the proof of address isn’t complete

To ensure that no error occurs when verifying the address, the user should upload a complete picture of the document. All the corners of documents should be in the frame when taking the picture.

Online customers are required to provide a set of ID and other required documents to verify their identity as well as confirm their address. This is how businesses comply with regulations and prevent fraudsters. 

Digital identity verification services enable customers to verify and authenticate their identity. However, it is necessary that the ID verification process is frictionless and fast enough to ease the user journey and build trust.  

DC is the Latest State to Sue Juul over Targeting Minors

DC is the Latest State to Sue Juul over Targeting Minors

The District of Columbia is now the latest state to sue c-cigarette maker, Juul Labs, saying the company’s online ads and promotions illegally targeted minors. 

The District of Columbia is following other states in suing e-cigarette maker Juul Labs, saying Juul deceived consumers about the potent nicotine levels carried in its flavored pods. The lawsuit also alleges that Juul failed to satisfactorily verify customers’ ages before selling e-cigarettes through its website. 

The lawsuit was announced Tuesday by the Attorney General of Washington DC, Karl Racine, alleging that Juul’s viral marketing contributed to a sudden increase in underage vaping by teens in Washington and across the US. 

The lawsuit follows other similar lawsuits filed by California, North Carolina, and New York. Other states are also investigating Juul which is currently dominating the US vaping market. The company also faces other charges from the FDA, Congress and other federal regulators. 

Due to numerous lawsuits and intense pressure, Juul has discontinued its advertising in the US and stopped sales of all but two of its flavors. In addition to this, the company suspended all their social media accounts and tightened age verification for their online sales.  

A spokesman of Juul said that the products of the company are only intended for adults and Juul is committed to combating underage vaping. 

 

 

adobe twitter

Adobe, Twitter and NYT Team Up Against Deepfakes

Deepfakes, whether synthetic or manipulated, are rising at an alarming rate. They can cause immense damage as fake videos during the election period can cause false information to circulate. This can result in loss of lives and utter chaos. In order to combat image manipulation and deepfakes, Adobe has joined forces with Twitter and New York Times. 

During its Max conference in Los Angeles, Adobe introduced a new experimental feature that spontaneously let you know if an image is digitally manipulated. The feature also lets you undo the edits of the image. The tool, called ‘About Face’ allows you to upload an image and then it runs a detection algorithm to check if the image was tampered with or not.

 

Adobe, Twitter, and NYT

Adobe general counsel, Dana Rao, said about the deepfakes and transparency, 

“When it comes to the problem of deepfakes, we think the answer really is around ‘knowledge is power’ and transparency. We feel if we give people information about who and what to trust, we think they will have the ability to make good choices.”

About Face also lets you know the chances the image was manipulated. The tool doesn’t observe the image as a whole like a face detection algorithm, but rather looks at the individual pixels. Due to this, it also lets you know which parts of the image it thinks are exploited. The user is provided with a virtual heatmap of all the altered regions. About Face seems to be designed especially to detect changes made by Photoshop’s liquify tool. You can see where the pixels have been stretched, squished and interpolated. 

You can check out About Face in more detail at Adobe’s blog post here

FATF Guideline Key Features

RegTech – FATF Guidance for Digital Identity Verification

Regulatory authorities have recognized the benefits of technology and its use for seamless regulatory compliance and scrutiny. Digital identity verification referred to as “digital ID systems” in the FATF guidelines, is a futuristic approach towards fraud prevention. FATF recently issued a guideline for digital ID systems, their use cases, the risks involved and the benefits of such solutions. 

FATF took this initiative back in 2017. It showed its positive attitude towards technological solutions for regulatory compliance that are aligned with the regulations of FATF. Since then FATF has been working on developing guidelines for such fintech and RegTech solutions, that will further make this industry fraud-free. As the guideline highlighted that risk prevails in the fintech industry as well and it can be mitigated through regulatory compliance. The FATF guideline on the digital ID systems is still under scrutiny and it requested suggestions for public stakeholders to leave no loophole for financial criminals. 

FATF Guideline Key Features

The following are the key features of FATF guidance on digital ID systems. It is expected that the final draft of guidance will be very much different from the current draft. 

 

  • Stakeholders of the Digital ID guidance

 

FATF developed guidelines to assist in regulatory compliance, supervision, examination, and cybersecurity authorities by government organizations involved in policymaking. Also, the private sector that delivers digital ID systems will have a lot to gain from the guidance. 

Last but not least, the businesses and organizations that use outsourced digital ID systems will also benefit from this guidance, as it will help them to choose the best Digital ID verification solution. 

 

  • Limitations of the guidance

 

The guidance draft issued by FATF doesn’t cover any information regarding some Customer Due Diligence (CDD) practices. The guidance doesn’t cover the CDD through digital ID for legal person verification, Ultimate Beneficiary Owner (UBO) screening, and nature of a business relationship. 

There is no doubt that digital ID verification can serve these above-mentioned purposes as well but for the time being FATF didn’t cover these in this guidance. 

 

  • Main components and participants of the digital Identity systems

 

The guidance mentioned three main components and participants that it seeks to be available in digital identity systems used by the entities. It includes the process of identity screening through digital ID systems, the ongoing screening and the technical aspects of the digital identity systems. 

  • Identity proofing and enrollment is the first component and it involves the collection and verification of customer data. A picture is shown on the 13th page of the guidance draft and it shows the process of collection of data from the official identity document (like ID card) and then screening of the information to verify the identity of a customer. The component one also includes the verification of a person through biometrics like face verification and liveness detection to ensure that the original person is providing the identity evidence.

 

  • Identification and identity lifecycle management is the second component and it includes the information regarding the stakeholders that need to be verified. The system should be designed to verify the identity of new customers and to verify the identity of already existing customers. It also mentioned that the digital identity system can be used every time a customer logs in to his/her account online or for every face to face interaction with the customers. Such verification should be performed on all the transactions and events mentioned in the FATF regulations regarding identity verification.  

 

  • Portability of identity proof is the third component that allows the end-users to develop portable identities that will be issued for future verification. 

 

 

  • References 

 

The guidance referred to NIFT Digital ID Guidelines and EU’s EIDAS Regulations and explained how Digital ID systems help in the effective implementation of CFT and AML regulations. 

 

 

  • Technical standards

 

The Digital ID systems that follow the guidelines of following international standard organizations are good to go as per the guideline:

  • various jurisdictions or supra-national jurisdictions (e.g. eIDAS Regulation by the European Union)
  • International Organization for Standardization (ISO), International Electrotechnical Commission (IEC), Faster Identity Online (FIDO) Alliance, and the OpenID Foundation (OIDF), and
  • International Telecommunications Union (ITU) and GSMA (for industry-specific). 

To wrap up, businesses are required to comply with KYC, AML and CDD recommendations of FATF in every corner of the world. Now FATF is making things easier for them by developing a guideline for digital ID systems. Just follow this guideline for choosing the best identity verification solution for your business.

Multi factor Authentication is being defeated warns FBI

Multi-factor Authentication is being defeated’ warns FBI

For years, online businesses and organizations have been adopting various strategies and defense mechanisms to protect themselves from every kind of cyberattack. Cybercriminals are actively embracing technology to conduct sophisticated attacks online. This increasing trend of data breaches and digital frauds is a striking example of growing cyberattacks. Defending against these attacks has become a new normal for businesses worldwide.

One of the widely used methods to prevent these frauds is multi-factor authentication (2-Factor being the most common one). Although businesses and organizations are proactively using multi-factor authentication to protect their systems and data from perpetual business email compromise (BEC) attacks, the new warning from the FBI has surprised them unanimously.

According to the FBI, cyberattacks are circumventing multi-factor authentication through various social engineering tactics and technical attacks. In multi-factor authentication, the use of a secondary token or one-time generated code verifies and authenticates the identity of the user. But with the FBI’s new warning, businesses are quite bewildered. 

FBI Warning: The Surprise Factor?

 

The reason for this perplexity is that businesses have yet to come across such attacks on MFA. So far, such attacks have been rare to witness. 

Microsoft azure claims that multi-factor authentication blocks an unbelievable 99.9% of enterprise account hacks. Adopting this method is the least the organizations can do to protect their accounts as the rate of compromise of accounts is less than 0.1% for the companies that are using any type of MFA.

Even with the least compromise rate, the use of MFA is uncommon with less than 10% of the users per month (for enterprise accounts) – claims Microsoft. This statistic alone contradicts the FBI’s threat of MFA compromise, and businesses were not expecting it. However, the FBI states that the use of one-time codes and secondary tokens is not enough to back up the user and his credentials, nor is it sufficient to protect his identity.

How MFA is vulnerable to cyberattacks

 

Despite the endless struggle of businesses to protect the user’s information, by making account access harder and complex through two-factor and multi-factor authentication, it can still be vulnerable to breach. There is a high-risk that cybercriminals can attack and trick users into disclosing their credentials and authentication codes through social engineering. Or, they can create an account for themselves through the use of technical interception.

Phishing

 

Phishing attacks are a great example of social engineering. They can be used to lure victims into providing their credentials through a fake login page. Due to readily available technology and APIs, it is not difficult for criminals to create a fake login page. Attackers make use of different social engineering tricks (for example emails, fake job alerts, etc.) through which they tempt the users to click the link which is a clone of the original login page.

When the victims enter their credentials, the hackers fetch that information and pass it to the real login page, henceforth triggering the multi-factor authentication procedure. The victim is shown fake prompt requiring the texted or mailed code. Just like before, the hackers catch the code and complete the authentication process. 

This is not as easy as it seems. Hackers need to be fast enough due to the limited time-factor associated with the code. But once the process is successful, there’s nothing that can stop them from carrying out their activities.

Password Reset

 

Many times, the authentication process can be bypassed through the “Forgot Password” procedure, if a hacker is in possession of “something you have” item (for example, email). 

If the criminal/hacker has gained access to the victim’s email account where the verification link or code is sent, the attacker can easily use the “Reset Password” link and change the passwords to something else by following the instructions. Moreover, once he has access to the account, he can even change the recovery email and phone number, giving him complete access. 

Third-Party Logins

 

The explosion of online platforms has introduced a new authentication process for enhanced user-experience – through third-party logins. 

In this process, the user is offered an option to log in using third-party accounts and bypass the 2-factor authentication procedure. An example of such a case is “Login with your Facebook Account” or “Login with your Gmail Account”. In this case, an attacker can easily take over the accounts once they have access to your Gmail or Facebook credentials (through phishing and forget password procedures).

Brute Force Attacks

 

With the advancement of technology and automated tools, hackers have the opportunity to obtain user passwords and verification codes through brute force attacks. Through brute force, the attackers can gain limited-characters tokens. The tokens or verification codes are quite useless if the attackers get enough time to apply brute force and obtain the token. 

Advanced Tools and Techniques

 

On the one hand, technology has helped organizations in securing their digital presence, while on the other, it has also contributed to the innovation of advanced hacking tools.

In its investigation, the FBI has highlighted different examples of tools and techniques that are being used to defeat multi-factor authentication. It includes web hacks, cyberattack tools like NecroBrowser and Muraen, not to forget straightforward SIM swapping. The main issue with MFA is that organizations find it an ultimate solution for the security of the institution.

Solutions to Cyberattacks

 

While massive data breaches and identity theft are on the rise, multi-factor authentication is becoming the standard procedure for most of the organizations to secure themselves from attackers. 

No doubt, it is quite a secure method but hackers are now finding ways to get around MFA. While the risks are rare, the fact that a growing reliance on MFA can lead to growing attacks on MFA can’t be ignored.

FBI states that as per research 99% of the attacks are triggered by the person’s activities i.e. through clicking the link and falling victim to phishing scams as well as social engineering hacks. The most effective solution is to educate employees and consumers to recognize the phishing attacks so that they can try to avoid them.

Use of Biometrics

 

Use of Biometrics

 

The multi-factor authentication can be secured just by adding an extra layer of security i.e. Biometrics. 

The hackers can access something you know (credentials) and something you have (authentication codes) but they can’t access something you are (biometrics). Biometrics are the unique features of a person that can’t be stolen or changed. Incorporating biometric verification with 2-factor authentication can provide the most effective and secure authentication process.

Reasons Why Brokerage Firms Need ID Verification

4 Reasons Why Brokerage Firms Need ID Verification?

According to Steve Grobman, Chief Technology Officer for McAfee, “The digital world has transformed almost every aspect of our lives but bought risks and crimes too. Crime is more efficient, less risky, more profitable and has never been easier to execute. Financial institutions of all stripes- banks, credit unions, brokerages, and payment companies need to take a layered approach to cybersecurity and fraud prevention.”

Moreover, the New Global Cybersecurity Report Reveals Cybercrime Takes Almost $600 Billion Toll on Global Economy. Financial institutions are required to abide by AML and KYC regulations. They are required to perform KYC and AML compliance. Financial institutions need to practice in-depth KYC and AML compliance to prevent themselves from falling prey to cyber scams like a data breach, money laundering, ransomware, etc.

An Insight to Brokerage Firms

Want to trade stocks? You’re going to need an online broker. Brokerage firms are financial institutions that help you buy and sell securities. They act as the middle man between the buyer and the seller. Depending on the brokerage firm type you choose, you can either make your investments via telephone, internet, or smartphone. Brokerage firms generally charge per buy or sell order. Online brokerage houses may not have any physical office at all. They operate via the internet only so they are more prone to falling for cyberattacks. Isn’t it? 

Online Identity verification can serve the best in this regard.

ID Verification- Requirement for Brokerage Firms

 

To comply with the US. government law, Brokers collects personal information from their customers. It may include tax identification and financial information. Rules imposed by a Self-Regulatory Organization (SROs) brokers request information from new customers as well as customers having a long-standing relationship with the firm. Also to fulfill the KYC and AML requirement they need to know who they are dealing with plus if they are exchanging the money between the right two parties. 

Following are a few reasons why ID verification is crucial for brokerage firms:

 

  • To Fulfill Suitability Law

 

According to FINRA suitability and SRO rule when a broker recommends that a customer buy or sell particular security he must have a reasonable basis for believing that its suitable for the customer. 

 

  • To Fulfill Record-keeping Requirement

 

SEC rule requires the brokerage firms to create a record for each account with an individual customer. It should cover name, address, DOB, government-issued ID information. To be sure about all the record brokerage firms need to verify all this information first. ID verification plays its part here. Brokerage firms need an online address verification tool to confirm that the person is not lying about his residence. Online ID verification is important for brokerage firms not only to combat fraudsters but also to fulfils the record-keeping requirement by SEC (Securities and Exchange Commission). Brokers must make a good faith effort to obtain and verify the information of their clients. 

 

  • To Combat Terrorist Financing:

 

Money laundering is committed to hiding the money trail or black money. Financial institutes are often deployed by criminals to launder black money in other countries for various purposes including terrorist financing. The brokerage firms can be a victim of this too. So to adhere to Counter Financing of Terrorism (CFT) brokerage firms need to know who they are dealing with and where the exchange is taking place. 

 

  • To Counter Fake Identities and Frauds:

 

According to a study, 3 million identities were stolen in 2018 and 1.4 million of those stolen identities were fraud-related. Criminals use fake identities to open accounts at financial institutions to conduct their illegal activities. The most common victims of identity thieves are the financial institutions because they serve well the money motive of criminals. Online KYC and AML solutions help the financial institutions in preventing the risk that comes from a diverse clientele. Identity thieves and money launderers can be identified at the very first stage and help the businesses in serving only legitimate businesses. 

Wrapping it up, the brokerage firms (online or physical) are common victims of criminals. The product of brokerage firms is exploited for hiding the black money or to transfer funds to the terrorists anonymously. Hence, the reason why brokerage firms are advised to run in-depth KYC and AML screening on their investors. It helps them onboard a secure clientele and getting a good credit rating due to regulatory compliance.

Digital Document Verification Giving Wing to Recruitment Sites

Digital Document Verification Giving Wing to Recruitment Sites

Document Verification: In an industry that’s all about people, it’s critical that you know that a candidate is who they say they are. Most recruitment business will have a process in place for making identity checks, but a manual process is time-consuming and inconsistent.

Job seeking is an uphill task, recruitment sites are on a mission to reshape the employment market by connecting local companies with local job seekers in an instant with their smartphone. User identification is one of the major requirements for such an employment platform in order to fend off scammers and fraudsters. Carrying out a robust and seamless due diligence process to register authentic users is imperative for such business. 

Following are the reasons why an ID scanning system should be used by recruitment business to gain benefits:

Be Confident in Audit

With electronic identity verification in place that stores copies of the identity document checks, date and time-stamped with a record of who made the check, making the agency always prepared for an audit – be that from an external company, a client or even immigration enforcement. So it makes the agency prepared beforehand saving a lot of time and effort.

Deter Fraud

Almost every business online is a center of attraction for cybercriminals. These criminals are paving ways for frauds like identity theft and other digital scams. Verifying documents online of job seekers not only decreases the frauds but also helps in combating them. When a job seeker uploads his document, at that very moment, documents are verified and only authentic document are kept for further sending to different organizations rest are discarded. Candidates may present fake or forged documents just to get hired. These may include, the depiction of fake certifications, when in reality, they may not even be half as qualified. To fight back these issues, digital identity verification becomes plays a vital role, so the identity and the documents presented by the candidates may be verified using these authentic digital techniques. 

Increased Security

It is more important than ever to verify the documents of job seekers due to an increased risk of terrorist funding. Identity solutions are essential to instantly verify the document of visitors in real-time and easily, making both job seekers and companies providing the job feel safer. 

Better Relationship

         Online document verification eliminates the annoying pile of paperwork making the business one step ahead and more customer-friendly. Job seekers will appreciate your attention to safeguarding their identity, building rapport, and brand loyalty.

Ensure Greater Accuracy

  Flaws and errors are always expected while taking user information manually. At times customer mistypes information. Handwritten can even be difficult to read leading to data entry errors. Online document verification eliminates all these possibilities and streamlines the process as according to that provided information online job providing platform haunts the best possible jobs for you matching your skills.

Time-Saving

In any business, deadlines are tight and meeting margins matters a lot. So any possible way that saves time is very important. Manual document checking is laborious and slow, it requires a member of staff to carefully checking all documents. But online document verification system will be able to process the documents in no time. It also removes the need to photocopy files for future audits. It saves time that you could be spending doing something else of value to your business.

Introduce Consistency

A manual work check will only be as good as a person making it. The human element can lead to an inconsistent decision or even unconscious bias towards certain candidates. In real it is always very difficult to train all the staff to document experts and to keep up to date with the ever-changing document catalog during identity checks. With an online ID verification system, you need to train your staff for all this. 

Protection Of Business

Placing a candidate who is using illegal documents and who is found to have no right to work could have serious damage to the brand and reputation as well as the risk of being fined.

Stand Strong in Competitive World

If the agency publicizes their use of electronic verification systems to help with ID scans, that gives client confidence and peace of mind that all the candidates have been verified consistently and are who they say they are. Many of customers widely communicate their use of ID verification technology, both to highlight the technology as a competitive strength against other agencies and also to deter anyone who may consider applying for roles using fraudulent documentation.

Ensuring Right Jobs For Right Candidate

ID verification, in this case, provides a filter. The real applicants having authenticated documents can be provided with the platforms to link with good companies to get recruited at. This on one hand filtrates the documents while on the other hand increases the rating of the recruitment site as it will be dealing with only real ones and not the scammers.

   As recruitment sites use the most advanced and transformative technological systems, it can quickly morph the world of work into a digitally designated algorithm that matches employees with multiple job seekers across numerous job sectors. Simply, this indicates that in a matter of seconds, such sites can match specific workers. Verily reliable document proofing is of great help in this regard.

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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ID Verification for Ultimate Subscription Fraud Prevention

Cellular phones were first introduced in the consumer market in 1973 when Motorolla first introduced its handheld mobile phone. Fast forward, almost half a century later in 2019, we are now expecting 5G networks to become mainstream by the end of the year. This rapid progression in cellular network technology has been a challenge for the telecom sector. However, over time mobile network operators have risen to the challenge and kept up with the latest trends. At present, the telcommunications market is a highly saturated one with an extremely high switching rate. Companies find it increasingly difficult to retain customers to come up with innovative services. Amidst all this, subscription fraud is ever prevalent in the sector. Therefore, ID verification presents itself as the perfect solution to counter fraud, in addition to providing a competitive edge to mobile service operators.

Telecom frauds are not a new concept and have plagued the sector for a long while. Subscription fraud is among the most common types of telecom fraud. Criminals use stolen identities and credentials to purchase SIM cards, which later become a headache for the mobile network operators (MNOs). Ultimately this also creates a sense of distrust amongst customers when they find their credentials are being used fraudulently to commit subscription fraud. Online identity verification services can not only reduce the risk of identity fraud in the telecommunication sector but also establish a seamless customer experience.

Existing Practices for Customer ID Verification

Most telecom companies currently use standard, in-person verification for authentications. A lot of other providers have nearly non-existent identity verification measures. Ineffective measures for authenticating users before issuing them service has highly detrimental costs for MNOs. In addition to that, the legal exposure that comes with allowing criminals to use telecom services to commit fraud is massive. The increasing use of unverified SIM cards for illicit activities ranging from kidnapping to terrorism also has regulatory authorities on edge. Therefore, they are also encouraging MNOs to fulfil Know Your Customer KYC regulations effectively.

What does Automated ID Verification Offer for the Telecom Sector?

If increased telecommunication security is not motivation enough, here are a few other benefits offered through digital ID verification for mobile operators;

  • Reduced Friction in Customer Onboarding – Online ID verification is faster and more accurate thus is immensely helpful in reducing friction in customer onboarding procedures. Customers often tend to find manual procedures slow. According to a report, 76% of mobile network subscribers prefer single sign-on service from their MNO. The added possibility of error can increase their frustration, thus causing them to abandon the process entirely. Automated solutions allow for instant onboarding procedures by electronically extracting data from IDs, thus enabling frictionless customer onboarding procedures. This also helps in improving customer service operations, thereby establishing customer-centric enterprises.
  • Enhanced Operational Efficiency – An ID verification software uses Optical Character Recognition or OCR to extract data from scanned documents, thus eliminating the need for manual verification procedures entirely. A customer’s identity is further authenticated through biometric facial recognition. All these features combine to streamline operations for the telecom sector, thus increasing their levels of productivity.
  • Enhanced Security – As detailed before, increased levels of security is the primary reason for implementing a digitised identity verification solution for MNOs. Such systems can catch a fake ID within seconds, thus enabling telecom companies to detect fraud instantly. Such systems are equipped with identifying standard government-issued IDs from several countries, therefore, making it near impossible for the perpetrator to commit subscription fraud. The risk of identity theft is further mitigated through facial recognition ID verification, that matches the image in the ID to the real-time image captured by the user. Digitised ID verification is highly effective as it counters spoof attacks and can identify photoshopped images as well.
  • Build Customer Loyalty – Proper and active measures taken by MNOs to secure customer data and identities, can establish trust amongst users thus increasing customer loyalty. Along with increasing security in their systems, telecom companies can also comply with government regulations that require companies to verify customers properly and to keep records of those verifications. By fulfilling these regulations, MNOs can also enhance their reputation in the market and build trust amongst regulators as well.

The Ultimate Solution for the Telecom Sector

Shufti Pro is a KYC verification service provider that offers identity verification services through an AI-powered verification software. It uses a hybrid technology of AI and Human Intelligence to verify users. Not only can it verify users within seconds, but it also has universal language support that allows it to cater to users and clients from all over the globe. It offers the ultimate telecom fraud prevention guide to MNOs and offers them every benefit listed above and more.

ID verification from Shufti Pro is not only the best but the ultimate solution for businesses looking to reduce fraud and enhance their operational efficiency. Through its real-time document verification and online facial recognition, Shufti is able to verify users accurately and seamlessly.

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Intelligent Security Systems & Digital ID Verification

Most technology solutions present a compromise between convenience and security to their users. In that, as a system is made more secure, it becomes harder and harder for users to access. This tradeoff has become somewhat of a challenge for different businesses as they seek to provide both attributes in all their digital channels for customers. The e-commerce sector, for instance, faces the repercussions of credit card fraud or identity theft in the form of chargebacks and fines. Digital ID verification solutions present themselves as the ultimate solution where companies no longer have to compromise on accessibility while providing security to customers.

Every organisation today faces the challenge of digitising its operations to provide fast and easy access to services to customers. Whether it is developing multiple channels to engage customers or providing secure payment channels for online buyers, businesses are constantly establishing better IT systems to increase convenience for customers. With the rise and progression in technologies like Artificial Intelligence and the Internet of Things, the IT industry has been able to develop solutions that are both efficient as well as secure.

AI systems are being constantly refined and are able to learn from their own experiences. They are being made to perform redundant tasks, suggest the best course of action and minimise risks for the company. With the increased advancement in intelligent systems, businesses can now implement systems that are able to verify users in real-time, all the while lending better security to transactions.

The Problem With Present ID Verification Systems

The prevalent verification systems in businesses are outdated, manual or both. They have become stagnant and inefficient in the wake of increased sophistication in the landscape of fraud. Businesses and financial institutions still rely on stagnant data sources, that makes it harder to achieve accuracy in identity verification. As the increased usage of social media has rendered personally identifiable information or PII vulnerable, businesses must come up with data sources that are more reliable and can establish the true identity of an individual.

Manual verification procedures tend to be prone to error, not to mention time-consuming. Banks have long relied on manual, in-person verifications for clients. Online businesses, on the other hand, had no such verification tools to authenticate their users. The outdated systems that have been used for customer identification and verification are no longer efficient and reliable. They operate on outdated and rule-based systems and, thus are prone to generating false positives. As the staff members sift through false leads, they get to legitimate leads belatedly, thus giving fraudsters the opportunity to get away with their scam.

 

Building Intelligent Security Systems Through Digital ID Verification

As the landscape of technology progresses at a rapid pace, systems have been developed using modern technologies including AI. Big data analytics and the IoT that can eliminate the construct of inefficiency in its entirety. The digital age has given rise to intelligent security systems that allow companies to curb crimes like identity theft, credit card fraud and money laundering. Systems are available for fraud detection through online ID verification and risk appraisal of customers.

An ID verification software allows businesses to identify and authenticate a customer’s identity within seconds. An identity verification service like Shufti Pro is capable of verifying users through document scanning and facial recognition online. Users are able to establish the authenticity of their identity through the former and proceed to verify themselves with the latter.

Another efficient tech solution for fraud detection is the risk analysis of customers through advanced machine learning-based algorithms.  A risk analysis software is able to detect suspicious activity amongst a client’s transaction history, thus enabling the organisation to detect and prevent fraudulent activity as it happens.

Industries Using Smart Security Systems

Fraud detection and security solutions have a vast array of applications for different industries. Some of the industries where modern technology has helped in revolutionising security include;

  • Healthcare

    The safety of medical records is of the utmost importance in the healthcare industry. Medical identity theft has become more common and prevalent than people care to realise.  With advanced AI-based systems, it is possible to secure these records. There are now systems available wherein doctors can retrieve medical data of their patient through their identity bracelets. Through real-time identity verification, healthcare providers can verify the information of patients thus preventing identity theft.

  • Financial Services

    Financial services industry has long relied on manual methods for client verifications. Through an online ID verification service, they can authenticate a client’s credentials in real-time thus increasing accuracy as well as the efficiency of the process. Transaction monitoring systems can detect threats instantly thus making sure that the bank can deter fraudulent activity.

  • Freelance Economy

    Platforms like ride-hailing services and online consumer to consumer buying platforms also require a certain level of trust among its customers before they can use them. These businesses can increase the levels of trust among its users through online ID verification services.

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ID Verification

ID Verification Trends to Curb Online Frauds

Automated Identity Verification Can Play a Significant Role in Fraud Management

Fraud management plays an important role in preventing internet frauds and scams. Systems for online ID verification are contributing significantly towards fraud prevention. The previous year was an uphill battle against online frauds with nearly 1 billion personal identity records stolen during the year. With significant incidents of data breaches including the Marriott data breach, Amazon’s merchant fraud and Atlanta’s SamSam Ransomware infection. The landscape for cybersecurity and fraud protection, therefore, has to keep on evolving with time. 

As cybersecurity threats continue to become more sophisticated in nature, both customers and employees expect the technological landscape to develop solutions that can tackle them effectively. Identity and Access Management (IAM) systems have to improve continually to keep fraudulent activities at bay. Effective IAM is being used by businesses to achieve a number of outcomes including the management of identities, verification of users, and the management of access to applications and APIs (Application Programming Interface).

The future of identity verification systems depends on the amount and types of online frauds that take place. To date, cybercrimes and frauds show no signs of slowing down. Which is why the future of online ID verification continues to evolve and advance. The trends that the identity verification landscape that can be expected over time include;

Evolving Methods for Identity Authentication

Identity proofing or authentication has been a requirement where people have to be physically present to verify themselves and their identities. Financial institutions, banks, government agencies and retail merchants have always required physical proof of identity from a customer or user. But ever since the e-commerce market has gained its place in the industry, it is becoming harder for businesses to identify fraud. The age of the internet has made products and services more accessible than ever before. So why should the methods for identity authentication remain far behind?

As advanced technological solutions powered by artificial intelligence (AI) and machine learning, gain their place in the market, new methods for identity proofing have also emerged in the market. These solutions and systems are only expected to grow over the next few years. They are also expected to change the way people share their identities online or otherwise.

As the need for physical interactions, while conducting transactions decreases, alternatives are being developed for ID verification. The need for verification systems like knowledge-based authentication (KBA) is diminishing as they have proved to be vulnerable. Thus verification measures need to be developed that establish a better connection between authorities and the private sector businesses.

Passwordless Authentication Methods

Creating and remembering unique passwords has always been difficult for online users. Over a decade ago, Bill Gates analysed that password-based authentications will, over time, become obsolete. Sure enough, it seems that passwords alone are not enough to thwart cybercriminals. Moreover, the types of online activity also determine the kind of security a particular action requires. Fraudsters do not pay bills or order small, insignificant things online. Identity authentication measures are expected to evolve in as much that passwordless authentication will be used for trivial and low-risk activities.

Companies like VEON, Microsoft, Accenture and Capgemini have managed t develop advanced systems for identity and access management that use cloud automation and passwordless mobile sign-on that can cope with the challenges of identity theft and cybersecurity.

Behavioural Analytics and Machine Learning

As the applications of AI and machine learning technology become vast and widespread, systems for identity verification have also transformed to provide better and more information to businesses about their customers. Companies are increasingly collecting and using customer data to draw insights for marketing campaigns, improve customer services and fight fraud. Behavioural analytics use complex machine learning algorithms to analyse a customer’s purchase behaviour. Such systems rely on vast quantities of data. They use transactional data to detect suspicious activities. Drawing on a users’ past behaviour, the system is able to determine if a transaction is fraudulent. If suspicious activity is detected on a customer’s account, it reported to the company, who then takes the appropriate action against it.

Biometric Verifications Become More Common

Online businesses and financial institutions are increasingly making use of multi-factor or multi-layered authentication systems. As smartphones, these days have made online facial recognition a mainstream technology, facial biometrics are becoming the standard of online ID verification for companies. Just as the fingerprint authentication method took off, the face recognition ID verification method will be adopted by many businesses over the next few years.

Every company does not have the resources and technology to implement automated ID verification systems. Shufti Pro is an ID verification service that provides real-time verification results for document verifications, facial recognition as well as AML screening checks. It offers comprehensive fraud protection services through a complete KYC package.

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