Document Verification – Efficient Identity Verification Process to Combat Fraud

Last updated: October 2, 2023


Identity theft with stolen documents and consequential crimes such as money laundering and tax evasion are raising concerns for businesses operating through online platforms. Even with enhanced technologies and the use of automated processes in this digital era, there is an increasing number of cases of identity fraud and money laundering.

The blame doesn’t entirely go to fraudsters, though, because there is also negligence on the part of businesses in implementing sufficient security checks. Since all business and client data is now stored in digital form, it has become more vulnerable to identity theft. This makes it easier for fraudsters to achieve success in their illicit motives using sophisticated technology-based techniques. For this reason, online document verification is an essential countermeasure in digital businesses.

Identity Fraud 

Identity theft, hacking, and gaining unauthorized access to others’ accounts aren’t new crimes, and the rate at which digital platforms are being adopted is also increasing. When it comes to security and privacy, the adoption of verification measures is nothing close to the rate of digitization. 

To add to the misery, the Covid-19 outbreak has worsened the situation by forcing social distancing measures. Although many lives are saved, the threats to business transactions and other operations still remain.

Where the work-from-home strategies have allowed businesses to continue their operations without hindrance, they have also provided opportunities to criminals. For fraudsters, gaining unauthorized access and manipulating sensitive business data has been made easier thanks to the lack of document verification measures.

Using fake identity documents, fraudsters pretend to be legitimate individuals interacting with the officials through online meetings. When business systems have loopholes like these, they are definitely more susceptible to identity fraud.

Top employees of companies and their human resource departments encounter issues regarding hiring and onboarding. This is because onboarding sessions are now conducted through digital platforms, where faking identity is easier for fraudsters. 

Attendees of these online sessions can include legitimate entities as well as criminals with previous records of money laundering. Negligence of the company in implementing security measures in these meetings can lead them to huge financial losses.

Types of Documents Used for Identity Theft

Illegal Documents

Illegal documents are those that fraudsters create with the help of stolen information from someone’s ID cards. The key differences between illegal and legal documents are some key features such as unique patterns.

Tampered Documents

Instead of creating fake documents from the ground up, fraudsters often find it easier to alter and modify identity documents that belong to a legitimate individual.

Stolen Documents

For those criminals that do not want to reveal any of their information, stolen identity documents are the ideal way to get unauthorized access.

Document Verification Services

Digital businesses now have easy document verification solutions to prevent identity fraud with the use of illegal documents. These frauds pose direct threats of monetary losses possibly leading know your business to bankruptcy. It’s due to these reasons that KYC/AML regulations must be followed by businesses.

In addition, companies willing to avoid operating costs by ignoring the necessary security measures are forced to pay AML compliance penalties. The customers of these businesses become victims of identity fraud and lose their money when document verification isn’t implemented.

How do Document Verification Solutions work?

Document verification solutions are easy to implement by simply installing APIs from the respective services. End-users have to fill in the basic information such as their name and address via mobile or web apps. Apart from this, they are also supposed to submit images of their ID cards by scanning them using mobile OCR apps.

With AI working its wonders in the backend, document verification is an automated process to detect suspicious changes in documents. Even the slightest changes such as fonts or rainbow patterns can be captured and the document is then rejected. 

Online Document Authentication

Previously used methods of manual document verification were obviously not so accurate. As an individual cannot detect small changes just by looking at an identity document, the process wasn’t exactly a comprehensive verification. However, AI-driven digital document verification works by analyzing various characteristics simultaneously, including the extraction of information stored in the MRZ (machine readable zone) code.

This complex process of analysis is made possible by incorporating machine learning algorithms and deep learning. A wide range of documents including newly introduced, unique, and constantly updated documents can be verified using AI-based document verification.

Final Thoughts

In conclusion, document verification solutions assist businesses with an essential security measure for securing their digital platforms. With the integration of AI and OCR technology, these document checks are convenient and provide assurance to customers.

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