How Artificial Intelligence is taking ID verification to the next level?

How Artificial Intelligence is taking ID verification to the next level?

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Identity theft is deemed as a growing problem. Particularly with the increase in online shopping, the number of online identity theft increased rapidly. According to a 2019 Internet security report, cybercriminals are diversifying their targets and using stealthier methods to commit identity theft and fraud. In 2018, FTC processed 1.4 million fraud reports resulting in $1.48 billion losses. 

The number of fraudulent transactions and massive data breaches continues to rise as the fraudsters and cybercriminals become more sophisticated. To deal with these issues, various ID scanning and security solutions have been implemented using Artificial Intelligence (AI). 

 Artificial intelligence enables computers to make human-like decisions and automating a particular task. It empowers everyday technologies like search engines, self-driving cars, and facial recognition apps. The technology is also leveraged for customer identity authentication and fraud prevention. 

Machine learning and deep learning make it possible to authenticate, verify and accurately process the identities of the users at scale. Here are some ways AI and machine learning are used to scale identity verification.

Scaling identity verification with machine learning

Oftentimes, users are required to show their ID documents when purchasing or opening an account in the bank. Identity documents such as driver’s licenses and passports are scanned to authenticate the users. Some examples of document verification includes checking the originality of documents, extracting information using OCR, confirmation of genuine microprint text, and face recognition match the identity of a person. 

However, in online verification scenarios, the chances of forgery and identity theft increases. Using machine learning and automation for identity verification can create a more robust system that doesn’t rely on human verification experts. These machine learning systems perform identity verification faster than humans and are more secure.

3 features of a robust AI-powered ID authentication solution

For a robust ID proofing solution, 3 important ingredients are required:


Since data is the fuel for machine learning algorithms, acquiring suitable and specific data is necessary. To build a powerful machine learning model, tagged data is important.

Evaluation and Modelling

Defining success factors once the data is available in the next important ingredient. For instance, considering the problem of ID verification needs more accurate models because false identification could lead to errors. This is why a model with more than 95% accuracy and real-time processing should be implemented. 


Machine learning models make the decision based on previous experiences which is why training with suitable and tagged data sets is important for a robust AI service provider. Teaching machines right from wrong is essential. 

However, IDs are physical documents that could easily wear and tear and if all the checks for authentication are automated many real IDs might fail the verification. This is where human insights come into play.

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How Artificial Intelligence is taking ID verification to the next level?

A hybrid approach using AI and HI

Human ID validation experts can step in to prevent bad customer experiences during the rare instances where the machine fails to accurately identify what is wrong with the documents. This further helps in identifying the key problems and making improvements in the system.

Shufti Pro uses AI in synergy with human intelligence to make the verification process frictionless.

Augmenting ID authentication by including biometric verification

Biometric authentication is much less explored technology when it comes to online identity verification. With features like liveness detection and anti-spoofing, facial recognition provides a lot of opportunities to businesses that want to ensure transparency on their online platform. Face recognition promises impeccable performance both in onsite and offsite verification scenarios. Facial authentication working in collaboration with document verification can provide reliable identity verification services to the businesses that are sick of being fooled by facial spoof attacks and other identity fraud methods.


Artificial Intelligence increases customer security and provides businesses an edge over the fraudsters. It enhances human ability and will continue to do so to enable businesses to process information intelligently and prevent being scammed. While AI-powered systems are still needed to be refined, it is high time that the business entails AI-based solutions for better enhancement of their workflows. 

Shufti Pro’s identity verification solution is built upon an ideal combination of artificial and human intelligence and augmented with face verification. It enables businesses to prevent fraud and onboard authentic customers. Shufti Pro’s investment in AI resulted in better customer experience, as well as enhanced security for online businesses. 

Understanding Digital Identity

Understanding Digital Identity

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What is Digital Identity?

In the digital world, your identity is made up of your personal information as it exists on the web (in digital form). Your personal characteristics, such as your name, address, date of birth, bank details, email ID, biometrics and login credentials all make up your digital attributes. 

Similarly, digital activities such as likes, comments, buying patterns, search histories, forum posts, and cellphone apps make up your online preferences. These are stored and tracked to maintain a record of online activity related to your identity.  

In short, it is an amalgamation of all personal attributes and characteristics that link the physical existence of a person to his or her digital presence. In this respect, the term digital identity can refer to all types of online platforms and computer systems that contain information about individuals linked to their national or official identities. 

This is similar to the collection of data in the real world, based on which an individual is identified and allowed to take certain actions. Official identification documents, proof of address, driver’s licenses, and other personal documents are required for transactions such as account opening or buying a property. 

Verification of persons online entails matching these two forms of identities to onboard people for digital services and to confirm their presence online. Signing up for an online account, making a purchase in an e-store, accessing medical records and accepting remote jobs becomes possible with a single click and a verified digital identity. 

This is known as digital authentication and is linked to the act of validating one’s identity at the time of sign up. The use of biometric technologies such as fingerprint and retina scans, as well as facial recognition, are all part of the process of cross-checking identities to validate if an individual is really who they say they are.

Establishing Trust Online

As businesses and services make a move to the digital world, crimes related to identity have also shifted platforms. Cybercriminals are learning to intercept digital accounts and steal identity to make fraudulent transactions. In the recent past, businesses and individuals have lost large amounts in losses as bad actors find innovative ways to stay ahead of tech experts and regulators at organisations and carry out online crimes. 

Digital Identity information is exposed through phishing attempts, irresponsible use of login details, location sharing, public wi-fi networks, and exposure to social media malpractices. Opening up access to accounts and online services, an online identity serves as a virtual currency that is exposed to data breaches. Additionally, digital identities are also sold and used against individuals in what is known as the ‘dark web’. A well functioning online system, therefore, needs efficient processes for maintaining reliable digital identities and mitigating accompanying risks. 

With impending threats of money laundering and terrorist financing, regulatory compliance in the form of KYC, AML and KYB requirements will help companies maintain trustworthy business ties online. Compliance regulations rolled out by GDPR, AMLD6 or CCPA make it mandatory for companies to opt for reliable means of verification. Strict identity checks and screening processes that verify who an individual is, and authenticate his/her access to an online portal are therefore the cornerstones  of good business practice. 

Unlocking Access to Financial Services 

The advantage of establishing a digital identity network is perhaps most evident in the banking and financial institution sector. Low cost and high accuracy than traditional vetting processes, digital identities offer faster ways of complying with regulations and attributing trust to financial brokers.

KYC checks ensure that customers are genuine entities as far as their existence, personal characteristics and documentation is concerned. For AML and ongoing background checks, identities must be traceable and accessible by verification solutions. This is easily facilitated by digital identity frameworks that consolidate pieces of information based on their accuracy and validity. For banks, this saves huge amounts of money otherwise at risk of being lost due to compromised identities. 

As observed, account takeover fraud is one of the most popular forms of fraud in the banking sector, with large corporate losses noted due to fraudulent transactions. Using traditional methods of identification, therefore, puts institutions at a higher risk of loss than digital identities, which can be consolidated and secured through advanced technologies such as blockchain. 

As a useful proof of verification, digital identities also open up new avenues for people who have limited or no access to traditional means of identification in the real world. Close to 1 billion do not have an official identity. This has grave implications in the form of barriers to basic social services such as education, health and economic opportunities. In this respect, a consolidated digital identity has the potential to act as a safety cover for people with no access to formal financial services. 

Modern organisations are upgrading to digital infrastructures and investing rapidly in safer technologies. Digital identity verification is one of the many important areas of security that require effective solutions for safer experiences online. The eventual goal is to tie the digital identity to a real person and to ensure that people are who they say they are. 

Data Breaches – Types, Sources, and Preventive Measures

Data Breaches – Types, Sources, and Preventive Measures

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A large number of well-renowned companies are under the threat of high-scale data breaches. After one data breach, it does not mean that the same company could not again be exposed to a data breach. Exceptions are there if that company successfully take in place stringent actions after tackling the vulnerabilities exploited before. An example of frequent data breaches is Yahoo data breach. Statistics show that in August 2016, Yahoo hack was uncovered that took place in 2014. It affected user accounts of around 500 million people. The same company faced another hack in December 2016 due to which 1 billion accounts were affected. In October 2017, this report was updated, stating a total of 3 billion affected users and is considered biggest data breach in history.

With the advent of digital file transfers and reliance on digital communication means by multiple industries, data breaches are residing fairly at a high rate. In the U.S, in 2015 data breaches increased to 781 million which were 157 million ten years back i.e. in 2005. In the same time period, compromised user records increased from 67 million to about 169 million. An aforementioned data breach of Yahoo was absolutely contributing to these exposed records. The company advised its users to immediately change passwords and guarantees its users that it will take stringent measures to eliminate the risks of further attacks.

There is a lose-lose situation when a data breach occurs. It is not only the customers whose information is compromised, not just the deceived organization which is dealing with the recovery of hijacked information, meeting legal compliance needs and doing the aftermath of reputational damage. This breach cycle has to break. Otherwise, the lose-lose situation will never end. 

What Data is Breached?

Personal, as well as a sensitive chunk of information, is breached. The information which online platforms ask to recognize some identity is compromised. This data includes first and last name, email address, residential address, contact number, username, passwords and some encryption keys that are a secret between user and organization for identification purposes. This information is called personally Identifiable Information (PII). 

This hijacked information is sold to third parties and are also weaponized by cybercriminals who use this information to conduct a large number of fraudulent activities. Credit card information is stolen through which fraudsters perform transactions, account takeover frauds are done, real identities are used in several other cybercrimes. Identities of children and adults are used to perform money laundering and terrorist financing. The reason is that these names have not been previously used or involved in any criminal activity before.

Emerging Forms of Data Breaches 

The dark web and emerging data breaches are threatening industries. Phishing attacks and account takeover frauds are looming online websites. E-commerce businesses, online gaming, charity, banking websites, etc. are highly prone to cyberattacks because of the assets it deals with. Any loophole in the system can cost businesses with heavy monetary and reputational loss. Online websites need to ensure that they authenticate each onboarding entity thoroughly against a bunch of checks that are enough to filter out bad actors from honest ones. Along with this, existing users should continuously be verified to make sure that identity is not switched with any fraudulent entity. 

Identity Theft


It is one of the most common data breaches. Identity theft was estimated to be accounted for about 50% of data breaches globally in 2015. It included about 40% of compromised records in the same year. Due to identity theft, a large number of financial institutions are affected. These sectors hold highly sensitive information in which financial information is common. This information if gets compromised results in huge damage for both the victim and the organization. Among this, the second most common type is the financial data breach. The financial sector lost 120 million identities in 2015. Cybercrimes are high in these sectors due to the attracting opportunities that fraudsters look for. The annual loss is an average of $13.5 million, which is highest as compared to other industries.

Phishing Attacks

The emergence of social engineering is giving rise to multiple other frauds. Among which, email phishing attacks and website phishing attacks are common. End-users are targeted with email phishing attacks. A phishing email from a renowned brand is sent to the legitimate customers which ask users to enter their credentials and credit card information. This email is from a fraudster who is trying to hack the account of end-users. This could be done by clicking the malicious link which redirects the user to a website that seems real but is just a clone of that website. Right after suer enter credentials, the account is hacked through that phishing attacks. 

Last year, most of the phishing attacks targeted e-commerce businesses, financial systems, and payment websites. Hackers are all active to exploit weaknesses in the system thorugh innovative tricks. On the same side, online businesses should take in place technological solutions to acter to these tricks.  

Credentials Stuffing

Credential stuffing is more or less similar to account takeover fraud. It is a cyberattack in which username and password related information are compromised and that account is hijacked. Fraudster gets unauthorized access to the account by stuffing combinations of username and passwords through automated requests for login. This stuffing is done by automated bots who fit in every possible combination to hack the account and use it for malevolent purposes. Research shows that stuffing attacks are 8% successful while attempting to account for takeover.

Overcoming Data Breaches with Biometric Authentication

Understanding the nature of data breaches, now there is a need for taking into account measures that mitigate future damage. Considering the common methods of user authentication i.e. 2-factor SMS based authentication ensures security when a user tries to access the account from different devices or locations. But unfortunately, this method of user verification is not most adopted. Only 10% of Gmail users use two-step verification. 

Well, that was one choice, data breaches take place as a result of unauthorized data access. Therefore, this should be catered with the immediate security layer that ensures an authentic user is trying to access the data/account, edit it or delete it. 

Biometric authentication is another option. For identity proofing and online user verification, a prompt, efficient and robust method is to verify the end-user based on biometrics. This could be through fingerprint scanning, iris/retina scanning or face verification.

Face Verification: Through unique facial features, an end-user can be verified. Every time a user gives an access request to the backend system, it will ask to verify the face biometrics. If the traits match, the user will be authenticated and get access to the account. Face verification uses Artificial Intelligence and Machine learning technology to map the facial features and decide in real-time whether the characteristics match the real user or not. 

Yes, fraudsters use tricks to fool the system, but facial recognition systems are strong enough to cater to those. The tricks of the printed image, or already taken selfie are used, which are tackled through liveness detection. Liveness detection ensures that the user is physically present at the time of verification. This can be done by recognizing the blinking of an eye, minor facial movements, 3D depth perception, etc. It ensures that the end-user is not fooling the system in any way. 

Biometric authentication is the primary step to cut the roots of growing data breaches. All possible cyberattacks are the result of unauthorized access which compromises user data and costs the businesses way more than the technical solution installment. Also, the regulatory authorities are set up to evaluate industries that are prone to data breaches and whether or not they take in place security measures to deter the risks. Identity verification through biometrics contributes to combat the risks of cyberattacks and hefty compliance fines.

Multi-factor Authentication is being defeated’ warns FBI

Multi-factor Authentication is being defeated’ warns FBI

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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 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.

Identity Verification Market ‘Hitting High Record’

Identity Verification Market ‘Hitting High Record’

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The advent of technology has pushed businesses to digitize their operations for better customer experience. Moving into the fourth industrial revolution, the new chapter for human development has started incorporating advanced technologies. Merging the physical, digital and biological world is giving rise to novel business opportunities. It is an understood fact, opportunities and challenges always go side by side.

As we move into the digital world, security and privacy concerns are on the rise and expected to grow more in the upcoming years. The organizations that will embrace the technological evolutions for customer security and meeting regulatory compliances are the ones that going to thrive fourth industrial revolution. It leads businesses to adopt effective, fast and convenient identity verification solutions. 

Identity Verification – Going Through The Roof

The organizations are leveraging AI technology to combat rising digital fraud and improve customer experience. The businesses are reaching out for third-party security and verification solutions; ultimately setting higher demands for the industry. As per the market research report, the Identity verification market is expected to grow $12.8 billion by 2024 at the Compound Annual Growth Rate (CAGR) of 16.0% during the forecast period.

The upcoming industrial revolution is going to be customer-centric and it is believed that customer experience is going to shape the future of organizations. Moving into the digital sphere has created understanding among the business about the need for secure digital identities. At the same time, convenience and simplicity are equally important in driving customer experience. The combination of both of these requirements forms a concept of secure growth that is important for the success of any business or organization. Online Identity verification is the best way to achieve both at a time — security and optimized processes.

Identity Proofing and Customer Experience

Satisfied customers are true assets for the business. Esteban Kolsky claims, 13% of the unhappy customers tend to tell 15 or more people about their bad experience contrary to 72% of happy customers sharing positive reviews to at least 6 people about the business. Securing customer identities and information is a positive step towards retaining the customers. Verifying the customers doesn’t only secure the business from fraudsters and risky individuals but also provide fruitful customer experience.

Not to forget that verifying and authenticating identity is a necessary step in know your customer (KYC) process. With the businesses moving towards digitization, manual KYC is no longer effective since it is quite a time-taking process and requires more resources. The customers don’t tend to wait, and eventually move to another organization. Also, the physical distance between customers and has drastically reduced and will continue to reduce in the future as well. It means that customers no longer need to visit the organization manually to carry their activities, for example, opening accounts, transferring payments, etc. This is the reason the businesses are going to need AI-based verification solutions that can onboard secure clientele in real-time and reduce customer drop-off rates. 

The rise of Synthetic Identities and Document Verification:

With the fake identities being recognized by the organizations, the criminals have shifted their focus on the creation of synthetic identities. Synthetic identities due to its hybrid nature (a combination of real information with fake ones) raise a major concern for organizations. They need to find ways to hinder such identities and establish trust with the real customers that they have no previous relationship with.

The combination of accurate facial recognition, document verification and other variety of verifiable identity sources – powered by artificial intelligence and machine learning – aim to support digital onboarding and meet know your customer (KYC), Anti-Money Laundering (AML) and Customer Due Diligence (CDD) regulations. Recently, according to research from Google intelligence the digital identity and document verification services will be a $15 billion industry by 2024, growing at 20% percent from 2019. 

The pressure of Global Regulatory Agencies: 

Online identity and document checks cover three basic questions to organize the whole onboarding process in a unified workflow:

  1. Is the person is real?  With remote presence.
  2. It the document original with no tampered information?
  3. It the person is safe to do business with? Having no criminal history and doesn’t fall under any sanction list.

These questions are essential to meet global compliance. Organizations have a clear idea that violating regulations won’t only make them liable to hefty fines, but it also has a great impact on reputation in the market. The data report published by Fenergo, detailing global fines activity of regional and in-country regulators from 2008 to 2018 states the monstrous fine has been imposed on the organizations. The reason was non-compliance with AML, KYC and sanction regulations in the past decade. 

Taking into account such trends of organizations, AI-powered identity verification services seem to be the perfect solution. Some businesses have already adopted these variations and other will be following them soon.

Read More: Warning: You’re Losing Money by not Using Biometric Identification

Identity Proofing – Prevention from Data Breaches

Identity Proofing – Prevention from Data Breaches

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World economic forum states that Cyberattack is mapped as one of the top threats to global stability. A cyberattack occurs every 39 seconds. Research states that the global economy can lose $445 billion a year due to cybercrimes. The stolen data is used to defraud the businesses for financial gain which ultimately turns into the financial and value loss of the business. According to a survey of Insurance Information Institue, out of 3 million stolen identities in America, more than 50% of those stolen identities were used for online financial credit card fraud with banks and online businesses.
Such an alarming increase in cybercrime magnitude and methods have made the businesses to invest in global identity proofing and document verification solutions. A survey reports that 63 percent of companies have implemented a biometric system or plan to onboard a customer.

Huge data breaches raising KYC concerns of businesses:

Huge data breaches have occurred raising a question on the cybersecurity of the so-called top-notch organizations dealing with confidential data of millions of people and businesses. For instance, the recent data breach of Equifax has caused losses of worth millions of dollars to the credit rating agency and also the other businesses. The huge data breach compromised 143 million records which contained the records of not only individuals but businesses also. According to a recent settlement with the regulatory authorities, Equifax is liable to pay a settlement of 245 million and also free credit rating to the victims of this data breach. Some other huge data breaches that affected the businesses in the past are the data breaches of Target, TJX and facebook. Those data breaches not only influenced the individuals but the businesses as well.

How a third-party data breach may become your liability?

Once an incident of data breach occurs it leaves an impact on several entities. The most common targets of the third-party data breaches are the businesses that do not have strong identity verification solutions integrated into their systems. The need for a strong identity verification solution cannot be overlooked by the businesses willing to prevail in the market for a longer period of time.

Risk of identity thieves:

After stealing the legitimate data of individuals from some third party server the fraudsters move towards the next step and buys goods and services from online businesses using the stolen identities. The business delivers the goods and services charging from the illegally accessed account. Once the victim realizes about the misuse of his identity proofing he gets a refund due to consumer protection laws and the business is the ultimate loss bearer. Other than illegal purchases there is an array of crimes initiated with a mere stolen identity, most common are, terrorist financing, money laundering, human trafficking, drug dealing, etc.
The phenomenon of stolen identities could affect businesses of all kinds in many ways and can influence many industries simultaneously, let it be a financial institution, online business, hospital or non-profit organization identity theft has caused huge losses.

Increase in fraudulent transactions

Once the individuals have access to the personal credentials of the individual he uses it often for financial fraud. Mostly the banks and financial institutions are defrauded through illegal transactions to an from the account of their legitimate client. According to a survey, online fraudsters managed to steal £1.2 billion from UK-based banks even in the presence of strict regulations regarding KYC (Know Your Customer) and AML (Anti Money Laundering). Also, the banks lost 123 million to internet banking fraud.
The fraudulent transaction fraud does not target the banks only. It targets all types of financial and fintech businesses. For example, a business facilitating online money transfer is defrauded by sending or receiving money using the stolen credentials. Other than that cryptocurrencies have been a very common victim of identity thieves and terrorists, the security loopholes make it easy for the criminals to hide their identity and money transfer trail.

Your business identity might be misused

The major data breach that hit Equifax in 2017 compromised the data of many individuals and businesses. The identity of a business, either big or small is a very valuable asset. Once that asset has been compromised it can start a range of losses for the business, including financial loss, loss of customer value, loss of competitive edge and the loss of competitive edge. Hence the misuse of a business’s identity could bring that business to its knees. The criminals could crack huge deals using the stolen credibility of a business. The identity thief might sell low-quality goods to the other business or client using the stolen business identity, ultimately this crime cycle will end with the loss of company value of the victim company.
The stolen business identity could be used for even more grave acts like money laundering or terrorist financing.

Getting a job with stolen identity:

The stolen credentials in a data breach are sold for as low as 10 to 15 dollars in the black web. Using these stolen identities the criminals get jobs at companies with the motive of hiding their true identity or to perform even bigger crimes like data breach while being an employee of the company. In case a business performs an efficient identity proofing on his employees before onboarding the new people, the risk of loss due to identity thieves is less than 1%.

How identity proofing helps in risk mitigation

Identity proofing helps the businesses to screen the true identities of the customers and employees before on-boarding them. The integration of AI-based global identity proofing systems adds layer after layer of security to the company profile. Hence the fake identities are highlighted before any damage could be done. Below is how timely investment in identity proofing solutions reduces the risk of loss due to third party data breaches:

  • ID verification screens all types of IDs and other identity documents for originality, expiry dates, forged data, MRZ code, hologram, reflected colors and photoshop.
  • Facial verification adds another security layer by checking the facial image in real-time for liveliness, 3D depth perception, and micro expression. Hence making it impossible for any fake person to as a person whose identity he has stolen.
  • Two-factor identity proofing makes the identification process even easier flexible for clients and businesses.

All the above-mentioned solutions help the businesses in keeping the identity thieves at bay while making it difficult for the fraudsters to stolen identities to cause any loss to the business. The data breaches no matter how old, have the tendency to cause loss to all types of businesses. Businesses need to integrate an Identity Proofing solution into their systems so that the data breach of some third party like Equifax, google or facebook might not become your liability in the form of identity theft-related frauds.

The Reason Why Companies Painstakingly Screen Customers

The Reason Why Companies Painstakingly Screen Customers

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Remote identity Proofing:  generally believe that more customers bring more revenue. But that is not always the case. Sometimes getting more customers can, in fact, mean fewer profits or even a loss. This article looks at the reasons why businesses take great care in acquiring customers.

Screening by Insurance Companies

Let’s start with the striking example of the insurance industry, or health insurance in particular. Selecting the right pool of customers is crucial for them. They need to maintain an acceptable level of risk in their pool of customers. A person living a healthy lifestyle would bring a lesser risk to the pool. On the other hand, a person that frequently eats junk food and does not exercise brings additional risk.
From a business perspective, the less risky customer is more desirable. If the insurance pool contains more customers carrying less risk, the payouts or insurance claim would be less frequent. Conversely, a pool with a higher number of customers that live an unhealthy lifestyle means that the insurance company would have to pay claims more frequently.
Therefore, it makes perfect sense why companies invest considerable time and effort in screening customers.

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An Example of Bad Screening Process

Say, an Insuretech firm (an insurance firm that primarily relies on tech innovation to earn revenues) uses the strategy of entering the market by providing insurance cover to those people that have been rejected by other insurance companies. This will not be a sound marketing plan.
The people who have been rejected by other insurance providers are likely to be carrying high risk. This would translate into frequent payouts (cash outflow) for the novice Insuretech company. They need good customers that pay their premiums consistently and are less likely to file a claim.
Another angle to look at this business equation is that when a company accepts more of ‘bad customers’ (high-risk individuals), it puts the burden on the good customers to increase their premium amounts. Business needs to generate consistent profits. Hence the emphasis on devising a strategic customer selection criterion.

Ethics Should be Part of the Business Strategy

Be it insurance or manufacturing, ethics play a critical role. For example, if a screening process results in a rejection list that contains more people of a certain race, demographic or ethnicity, this could be construed as discrimination. In some cases, the company might even incur a penalty under the law. Yes, it is not easy, unintentional breaches occur as well.

Using Machine Learning for Remote identity Proofing

Companies can use machine learning to screen customers. Consider a database where the management is setting filters for screening. For example, they might set the minimum income threshold of 120,000 euros to sell life insurance cover. But with machine learning, they might input ‘apparently’ uncorrelated elements such as if they take the bus to work or use carpooling. These parameters are neutral.
But even an apparently harmless filter such as ‘the number of rooms in their house’ could result in a rejection list that might indicate discrimination. Machine learning, data science in particular, can reveal correlations between elements that would not make sense to humans.
Strong coordination between data scientists and compliance can be a win-win. Companies could screen customers more effectively and still remain compliant.
In fact, businesses can refine their screening process by using compliant AI and machine learning screening. This is cost effective as well due to remote identity proofing. Real time identity proofing process refines the onboarding process for companies.
Screening customers is time consuming but when done effectively, the rewards are plentiful. Businesses do not just want every customer out there. Onboarding needs to be carefully aligned with the business goals while remaining compliant to regulations.

Why Millennials don’t care about Conventional Banking Services?

Why Millennials don’t care about Conventional Banking Services?

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Millennials are different from the baby boomer generation. They earn less than what the previous generation was earning at their age. It is odd that the banks have been unable to capture the market of millennials – the perfect target audience right now. However, faster customer identity verification can make banks millennial-friendly. 

Overview of Millenials

Millennials are the first of their kind – the true digital natives! 

They are internet savvy and armed with smartphones, which they check dozens of times a day. We are talking about people currently in the age group of 18-34. Smartphones play a huge role in their lives. 

The banks have started to think in terms of apps and online services. Also, the young generation is prone to fast internet.

What does internet speed have to do with customer identity verification?

A lot!

Banks are not selling toys or stationery. They have to comply with the financial regulations in providing their services. Say, a millennial wants to open a bank account. The ideal or expected way would be to open it over the internet. But not many banks are providing these services currently.

Why Banks have a hard time Capturing Millenials 

The millennials are not happy with the conventional banking system. They do not have to depend on any particular bank or service in most cases. An army of Fintech companies and products are swarming the markets. 

But despite the banks’ marketing, they are not there where they would like to be, in fact, they are far from it. If there is a bug in the app of a bank, the young customer would not like to wait for it to get fixed. They would like to know, which service is better and faster. 

Moreover, the banks have not yet figured out the perfect products that cater to this market. Millennials are putting off buying large ticket items but, in the future, they will be holding a significant amount of wealth.

Cybercrime is the elephant in the Room 

Let’s address the elephant in the room; privacy and security. We are spending more time gawking at the screens of computers and phones than ever before. You can buy stuff online, apply for a visa, date someone, and the list goes on. However, among this significant amount of data, security is of utmost importance,

Privacy breaches, hacks and other forms of cyber attacks have made this generation weary and cautious of banks. Since the majority of wealth exists digitally, this raises concerns for privacy.

A Safe and Bright Future

One obvious tool to handle security concerns is the verification of identity. When a customer is about to send or receive payment, the verification should be foolproof. This relates to the identity of the user. 

Each time we interact online, it leaves a footprint, which creates their digital identity. As technology gets more advanced, so do the tools. Banking and security services that are powered by AI and machine learning can collect the data better, faster and with better accuracy. Faster identity verification solutions are a healthy sign for banks. 


There are troves of rich data available for businesses. How fast banks capture and utilize it to offer banking products to customers will define who can corner this market first. Banks need to get aggressive in integrating state of the art technology in their services. Otherwise, more technology-based services will take over.

Importance of Identity Proofing for Facebook & Social Media

Importance of Identity Proofing for Facebook & Social Media

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For years, social media has been used as a tool for increased connectivity. Both businesses, as well as individual users, are making use of social media for connecting with the world. Businesses use it to engage a wider audience and attract more customers. Individual users make use of social media in order to stay connected with friends and family and to share their own experiences. However, in a day and age where cybercrime and fraud are increasing by the day, the safety of social media users is threatened. Frauds and scams have become a part of social media and have to be dealt with carefully. Social media holds an immense amount of personal information of users and is a potential gold mine for fraudsters to commit crimes like identity theft and credit card fraud. Therefore, the identity proofing of users is increasingly becoming somewhat of a necessity for social media websites.

How is Social Media Impacting its Users?

The scandal involving Cambridge Analytica, Facebook and Russia being involved in using Facebook to help Donald Trump win the election has gained much traction for the world to consider the downside of SM. In relatively simpler times, Facebook was an excellent tool to generate “word of mouth” and generate viral marketing views for posts. But as fraudsters took advantage of the lack of liability of identities on such platforms, it became a norm for them to create fake accounts to hoodwink users.

Anyone can create a page or a Facebook account to generate likes and build connections to use them later to commit fraud. The fact is that the growing impact of social media in our lives warrants some accountability. It is fast becoming a tool to influence young minds and thus requires a better mechanism for protecting SM users.

The influence that SM has on its users is fast becoming a reason for concern. The simple power of words is understood by marketing firms and how much of an impact they can have on the reader to influence them into buying a product or service. Not only that, but SM is increasingly being used to influence people’s social and political views. Another downside of having no proper user verification on SM is the increase of frauds and scams. Scammers tend to create fraudulent accounts and rope other users into all sorts of phishing and social engineering scams.

The fact is that although social media platforms may not be responsible for all these activities, they need to perform a certain level of identity proofing in order to make sure the user on the other end of an account is a real person.


Identity Proofing for Social Media Accounts

User verifications can greatly reduce the number of fake accounts on social media and can help the platforms establish some sort of accountability to posts done by individual users. More than anything it can help identify the perpetrator of crimes like identity theft, or better yet, thwart them from using the space entirely. Businesses like e-commerce stores and retail outlets tend to implement digital KYC or Know Your Customer verifications to verify their users. Such KYC solutions use different tools like document verification and facial recognition for ID verification of customers. This prevents fraudsters from using fake or stolen information to purchase goods or services.

Why is Identity Proofing Important for Social Media Platforms?

Businesses are coming to terms with the impact of good or bad social media reviews can have on their reputation. In a way, such quick and astute response from customers has put useful pressure on companies to keep their services in check. However, just as a good review from an authentic customer can build up a good reputation for a business, a bad review from a fake profile can ruin it in seconds.

In order for social media to thrive as a useful platform to engage with people and businesses and communities around the world, it is important to implement some sort of verification for its users. Proper identity verification of users can limit the number of accounts a user can create. It can also, therefore, increase the liability of the person using and posting his/her account. Users can be held accountable for what they post or say on such platforms.

As the number of accounts for a person become limited, fraudsters cannot use social media to scam users. If they do they can be tracked down and held responsible for their actions.

Moreover, identity proofing can also curb the spread of fake news and prevent people from unnecessarily spreading false knowledge. As the number of fake accounts and profiles diminishes, different entities would also be unable to use the platform to influence legitimate users. Moreover, it is important for businesses to make use of business verification in order to make sure that their customers are directed to the correct business profile of the company.

Shufti Pro is a KYC solution that is providing a number of ID verification services to a vast range of industries. Businesses can use identity proofing services to authenticate their users’ identities through document scanning and biometric verification through facial recognition. Shufti Pro also offers AML background checks to different businesses and financial institutes to fulfil their Anti Money Laundering compliance requirements.

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Identity Proofing – 7 Reasons Why Businesses Need it Now!

Identity Proofing – 7 Reasons Why Businesses Need it Now!

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Modern-day cyberspace has effortlessly diminished the boundary between the real-life and digital identity of a person. The online marketplace is transforming the daily life routine of mankind by enabling customers to use their identity to make purchases, avail services and even have a meaningful existence on social media platforms. But the risk of identity theft is far greater on the internet and various online services as compared to physical scenarios. Identity proofing seems to be the legit answer for businesses operating via online channels that want to avoid registering users with fake identities and stolen identity information.

Most businesses, having a digital presence on the internet, consider the importance of online identity proofing but fail to recognize the specific form of ID verification and KYC compliance that can help them choose an appropriate business fraud prevention tool from a large list of KYC solutions.

But before we dwell into the importance of an identity proofing solution in the modern-day digital world, let us explain what does it mean when we talk about Identity proofing.

What is Identity Proofing?

Identity proofing is used to establish uniqueness and validity of an individual’s identity. It helps businesses to ensure that the identity claimed to be owned by an incoming user or potential client is actually owned by that particular individual. Identity proofing and authentication can be performed by digital KYC that uses identity documents, biographic information, biometric information, and knowledge of personally relevant information.

The emergence of new technologies such as biometric sensors, OCR technology and high-resolution cameras in smartphones are helping businesses to adopt identity verification and digital authentication. Identity proofing is a great tool to achieve risk-based decision making based on concrete data collected through identity proofing services and solutions.

Requirements for Identity Proof

Now depending on the individual or regulatory KYC compliance guidelines, there are a number of identifying factors that can be used for identity proofing and authentication. Most of the KYC solutions require following personal details as identity proof:

  • Full legal name
  • Current Residential Address
  • Social Security Number/ID Card Number
  • Date of Birth
  • Personal Phone Number

In some cases, even before an identity proofing process starts off, privacy law requires companies and governments to collect consent of their users. This consent allows businesses to collect personal information of their customers only for identity proofing. Several laws have been introduced in various territories – like GDPR in EU – that prohibit the use of such collected information anything instead of verification purposes.

Types of Identity Proofing

There are two main formats of identity proofing that can be used by industry as well as governments for identity verification:

In-Person Identity Proofing – Such kind of identity proofing is carried out by physical evidence of identity being provided to verifying authority or a company. Based on the KYC compliance requirements, ID verification is performed to validate the personal information. Most Know Your customer solution are fully compatible with existing software allowing for digital KYC to be completed in a few minutes, even in case of in-person identity proofing and authentication.

Remote Identity ProofingAlso known as online identity proofing, this kind of digital authentication does not require the physical presence of the person who is performing digital KYC. Personal information, also known as Identity Proof, can be sent in the form of digital communication to the business that wants to authenticate the identity of their new or existing customer. Some versions of online identity proofing also include virtual sessions where a user can digitally present documents for identity proofing and authentication. Scalability of such identity proofing solutions is greatly dependent upon the amount and type of confirmation data that is required for remote or online identity proofing.

Challenges for In-Person Identity Proofing

Now although in-person identity proofing is considered the gold-standard to perform best identity proofing, there are some issues that undermine the utility of this format, such as:

  • The cost of in-person identity proofing is too high for service providers, as it requires the need for physical employees to collect identity proof from incoming users, not to mention to have multiple physical locations to facilitate the incoming customers and users who want to perform digital KYC.
  • In-Person identity proofing is really inconvenient in this modern day and age where digital resources are used to perform even the minimal tasks.
  • In-person identity proofing and authentication is also dependent upon the level of training received by the person performing ID verification
  • In the absence of digital KYC solutions or even technologically sound identity proofing service, even a human verifying operator will be unable to check for finest tampering caused by refined technical methods.

Online Identity Proofing Challenges

Now there are many KYC solutions and identity verification services available on the internet claiming to be the best identity proofing services but even the most reliable identity proofing and authentication software face some tough challenges such as:

  • A significant amount of personal data available on dark web collected by sophisticated and hard to track data breaches
  • The growing threat of social engineering from big tech giants
  • Traditional methods of collecting identity proof have not evolved according to recent cyber threats.
  • A grave threat of privacy breach resulting from a centralized data resource.

Now that we have discussed in great detail, each aspect of Identity proofing and how it is used by businesses around the world to authenticate the identity of their users and what kind of personal information is collected for an identity proof, here are 7 reasons why businesses need to start taking identity proofing and authentication seriously in the near future.


  • Smarter Cyber Criminals

Recent years have witnessed a substantial surge in the ability of cybercriminals to seriously dent the overall security of data management services and companies holding private information. Even the most famous names of the tech world have been outsmarted by the data bandits who have adapted complicated and hard to detect methods of cyber crimes.

Even the non-tech world, ranging from e-commerce to banking organizations, have failed time and again to implement reliable digital authentication solutions that can ensure the safety of personal data of their millions of customers. An authentic identity verification solution that can adapt to the changing landscape of online identity proofing, is the only way to secure your digital resources and never lose the trust of your customers.


  • Issuing Secure Access

Recent times have seen a substantial surge in identity theft cases in which users have complained that their identity proof was actually misused by someone else, to avail services on their behalf or gained access to restricted channels. Account takeover ratio in most countries has doubled over the years which means that cybercriminals are able to use personal information of real-users to otherwise inaccessible digital resources.

Recent surveys have also shown that the majority of internet users have now started shifting the responsibility of securing their identity from their own self to the companies that are offering them various services. Users believe that despite using all possible tactics to secure their identity, it is the weak strategies of Banking organizations, e-commerce websites and social media platforms that are leading to frequent data breaches. So it is important for businesses to adopt a more vigilant approach towards providing access to their users and implement best identity proofing strategies to not only make their customers feel secure but to safeguard their own business interest as well.

  • Risk-Free Payment Gateways

Recently, several banking organizations, credit card companies, and even the most reputable digital payment giants have become victims of large-scale data breaches. Most companies and service providers still rely on 3rd party payment gateways but the most innovative ones have even started launching their own payment gateway in order to make payment systems not only secure for their customers but to make the entire purchase cycle frictionless for their customers. An in-house payment gateway integrated with identity proofing solution can serve to safeguard the business interest and enhance payment processing speed at the same time. A glimpse into the history of identity proofing can give you an apt idea that online payment systems are the most perfect use case for any online identity proofing service.

Using a third party identity proofing services and solutions, such as Shufti Pro, can make the entire payment cycle, a business supporting process rather than business disruptive process.

  • Informed Decisions about the clientele

Any business executive that have utilized ID verification or any other KYC solutions can vouch that these know your customer systems are not only super-effective in handling identity theft prevention and anti-fraud protection, but they also help a lot in collecting verified information regarding customers. When fed into a CRM or Customer Support Desk, these identity proof collected from customers can become a goldmine of Big Data.

Based on this collected set of data, business executives can not only track activities of their users across multiple channels but also chart out new strategies to capitalize on the existing number of users and even formulate growth plans for future expansion.

  • Remote Account Opening

Now not all business can relate to this reason to integrate an online identity proofing solution into their business practices, but those who want to establish a stronger user base like banks, FinTech products, crowdfunding websites and many other industries, identity proofing services and solutions are the most important facilitator that can not only help build trust among its customers but ensure that only verified customers are able to open a remote account with them

  • Eradicate False Financial Claims

Starting off from cashback requests on e-commerce platforms and going till false insurance claims, identity proofing has the ability to solve many problems for a large number of businesses. Each transaction performed using digital resources can be vetted by appropriate identity verification service. When a business decides to collect identity proof for every transaction performed by its customers, the rate of fraudulent financial claims is virtually reduced to zero.

  • Reliable Customer Base

Identity proofing solutions have the ability to reduce the overall workload of businesses and digital platforms, by checking the identity proof of a customer right at the time of registration. Identity verification and identity proofing solutions such as Shufti Pro can perform several verifications ranging from age verification to biometric verification, in order to ensure that only a verified customer is able to register on a digital platform. It surely has the downside of reduced incoming users, but one the most amazing benefit of this approach is that identity proofing with help you collect 100% verified and reliable customer base, opening vast avenues of expansion in the future.

Now, if you need a highly sophisticated identity proofing solution that is not just efficient in detecting identity theft and digital fraud but also cost-effective for your business operations, then there is no better option then Shufti Pro. It offers real-time verification results for a large number of identity verification services such as Face verification, document verification, ID verification, handwritten note verification, customized document verification, address verification, and 2-factor authentication. AML background checks provide even a higher layer of financial risk protection to companies and businesses that want a reliable identity proof from their customers.

Artificial intelligence and human intelligence hybrid make the entire identity proofing and authentication process hassle-free for Shufti Pro customers. With competitive price model and a Restful API that makes integration smooth with pre-existing software, platforms, and applications, Shufti Pro is one of the most reliable identity proofing solution that a company can use to reduce identity fraud cases.