The cyberworld can bring many security risks to your business without the right precautions. Organizations today continue to pay compliance fines for data breaches. The list of online crimes is endless, and many argue that data is the greatest asset. Any wrong move might lead to serious consequences, such as identity theft.
For this reason, screening and onboarding only trusted, secure customers through identity verification is essential. Digital authentication services also help businesses reduce chargebacks and increase conversions, making digital ID verification a number one step towards a safer future for your business.
What is Identity Verification and Why does it Matter?
For starters, let’s analyze the term a bit. Identity verification is a procedure that reviews people’s identities, ensuring that they are who they claim to be. In general, ID verification can be used in various instances, but the procedure is best known to be applied in the financial industry. For example, you can be asked to verify your identity when opening a new bank account or applying for a loan. It’s also known as an important process in Know Your Customer (KYC) and Anti-Money Laundering (AML) efforts to monitor new customer risks and combat fraud.
What is KYC and Why is it Important?
Know Your Customer, or KYC, is a security standard that helps ensure safe relationships between customers and businesses. In general, the KYC process includes ID document verification, face verification, and document verification, such as your proof of address (utility bill). Companies carry out identity verification of their clients in compliance with requirements and legal laws. A more automated form of KYC is now called eKYC, which means that it’s a paperless version of identification.
In other words, KYC-related practices respond to the extensive use of technology and the need to protect customers from online fraud. In a traditional sense, banks can carry out in-person KYC checks. This is an important step for verifying customer identities during the onboarding stage when the business has no prior information about the customer. Of course, KYC doesn’t stop here, as it’s a continuous operation throughout the whole client’s journey with the business.