How Identity Verification in Online Account Opening Works

Guest Author: Liam Smith | Category: Internet

How Identity Verification in Online Account Opening Works

In the past, verifying a customer or a business account was a tedious job. It involved meeting the client in-person, manually verifying the provided documents, asking for third-party notarization or being trained enough to verify and authenticate numerous types of identification documents. Since it was a very slow and inefficient method, the chances of human error were exceptionally high.

The method described above was possible when people went to the banks themselves to open their account. Now that the bank is online, transactions are happening on mobile apps and across great distances, then how does this system of verification works? 

With all the businesses happening online, there comes a need to verify identities online. In order to do that, banks globally are integrating e-KYC solutions to verify their client’s identities online and in real-time. 

What is Online Identity Verification? 

Online identity verification is used globally in online banking that determines the authenticity of their clients. It is mostly known as Know Your Customer (KYC). Through this service, banks are able to verify their clients in a matter of seconds anywhere in the world. 

How Does it Work? 

There are a number of steps that are involved in the online verification of a potential client. 

Step 1: Establish the authenticity of the client

The first step in online identity verification is to verify that the person who is applying for a bank account actually exists. In cases of fraud, people generally utilize the identity of fictional persons or persons who have died. Through this step, the customer is getting to know their client. 

Step 2: Verify the client’s information 

The second step in determining the identity of the client is by ensuring the client is who they say they are. This is done through the use of out-of-wallet questions. Out-of-wallet questions refer to such questions which are knowledge-based authentication questions. These are similar to the security questions selected by the client when they apply for the account opening to other sensitive online services. 

Step 3: Determine the results

The results of online identity verification can result in either success or failure. If an applicant fails the online identity verification, the financial institution can either choose to fail them or send them for manual review. 

Online Identity Verification Services 

There are a number of online identity verification services which banks can incorporate while opening account of a client. Some of these include: 

● Document Verification

                Document verification checks if the documents are real, forged or photoshopped. 

● Address Verification 

               This is done by verifying addresses on utility bills, bank statements etc by comparing it                        with   the address on the ID card. 

Conclusion:

Identity verification is an automated process that incorporates the use of artificial intelligence and machine learning to authenticate the identity of a client. Businesses throughout the globe are asked to incorporate Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations to prevent money laundering, terrorist funding or related crimes. In order to that efficiently, online identity verification is the key. 

Guest Author:

Technical Content writing is my passion. I’ve broad expertise in writing for the technical field. I started my writing at the age of sixteen after I was in college. currently I’m already writing for contribution sites as a freelance influencer. I wrote several articles on medium and lots of them are revealed on varied publications. I wrote several case studies for business to allow them to understand the important want of digital transformation for his or her business