Identity verification has been around for a long time. Societies have come up with all sorts of documentation to prove an individual’s identity—take passports and school cards for instance. But the problem is that more people can easily fake their personal data nowadays. Thanks in large part to computers and the internet, there are countless tools that can be used to present fake documents. As a result, you can’t be too sure that the persons you’re dealing with are who they say they are.
Identity theft has also become more common. Personal and financial information of the victims are being used to commit fraud and other crimes. This can pose a big challenge not just for authorities and businesses, but for ordinary folks. ID verification is at the forefront of deterring fraudsters and putting a stop to identity theft.
What Is ID Verification?
In a nutshell, it is the process of authenticating one’s identity. There are many ways to go about this. There was a time when presenting documents is enough to confirm who you are. But vetting protocols have since become more stringent and there are 5 methods to verify identity commonly used today. The overall objective is to prove that who a person claims to be is true.
Why Is ID Verification Important?
Here are some of the top reasons why ID verification is important:
Prevent Identity Fraud
Identity fraud has always been a problem in society. It has many forms, from faking passports to using false credit card information. However, identity fraud has become more rampant as digital banking and other mobile payment solutions have become more commonplace.
With all the conveniences offered by online banking, cyber criminals are finding ways to steal other people’s information. For this very reason, digital banks and other financial platforms are required to implement ‘know your client’ or KYC guidelines, along with other anti-fraud solutions, to confirm the identity of individuals. ID verification is the first step in preventing identity fraud.
Address Money Laundering
If you’ve watched any series or documentaries about organized crime, you probably know that big criminal organizations resort to money laundering to make their funds appear as if sourced legally. The problem with money laundering is that it can negatively affect countries and economies. Territories, businesses, and banks that cater to money launderers also risk being blacklisted or sanctioned.
By setting up an effective ID verification process, countries and organizations can minimize, if not totally eradicate, money laundering in their areas of responsibility. Identity verification is now part of an overarching anti-money laundering strategy allowing authorities and businesses to flag transactions that are deemed risky or fraudulent.
Protect an Individual’s Reputation
In a highly digitalized world, anyone can easily create aliases or fake identities and then peddle false information to destroy other people’s reputation. A business entity, for instance, can create false social media accounts for the sole purpose of discrediting the competition. This is especially true in popular review sites.
But with an effective identity verification process, people or online users will be vetted. Therefore, there will be accountability since everyone will be using their true identities. In short, ID verification is instrumental in safeguarding everyone’s reputation. Also, by taking steps to boost your real identity’s reputation, you have a better chance of growing your business or your influence.
Prevent Credit Card Fraud
Most online transactions are done using credit cards. But as more people embrace e-commerce and use their credit cards online, more fraudulent transactions are being committed. Such transactions can take their toll not just on the credit cardholders but also to issuing banks.
Banks have been struggling with chargebacks as these can significantly affect their bottom line. Chargebacks occur when fraudsters use stolen credit card information to purchase goods or services online.
Once the true owners of the cards find out about the fraudulent purchases made on their behalf, they would naturally call the bank to cancel the transactions even if the fraudulent purchases made have already been delivered. Without a way to trace the fraudsters, banks are forced to reimburse the legitimate cardholders and are therefore left holding the hot potato last, so to speak.
Nowadays, ID verification protocols include a two-step verification process and even facial or on-device fingerprint recognition. These can effectively confirm the authenticity of the person using the bank cards and other services.
Indeed, it has become more difficult to do business nowadays because you don’t know whom you’re dealing with. In an age where data breaches and photo manipulation have become prevalent, trust has become a scarce commodity. It has become harder to find trustworthy businesses and even trustworthy friends and neighbors. Identity verification can help bring back trust and lessen fears when doing business, especially in the digital landscape.
ID verification is important in today’s society because it’s an effective deterrent against fraud. It allows businesses to fully integrate digital or online solutions without worrying about data breaches. Lastly, being able to verify people’s identities can bring about trust. As everyone knows, trust is a key ingredient for businesses, economies, and society as a whole to move forward.