Identity verification service

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An identity verification service is used by businesses to ensure that users or customers provide information that is associated with the identity of a real person. The service may verify the authenticity of physical identity documents such as a drivers license, passport, or a nationally issued identity document through documentary verification. Additionally, also involve the verification of identity information (fields) against independent and authoritative sources, such as a credit bureau or proprietary government data.


Identity verification services were developed to help companies comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) rules, identity verification is now a vital component to the transaction ecosystems of eCommerce companies, financial institutions, online gaming, and even social media. By adopting digital fraud prevention methods, businesses can achieve AML and KYC compliance while addressing the risks associated with fraud.[1]

In financial industries, verifying identity is often required by regulation known as Know Your Customer or Customer Identification Program. In the US, one of the many bodies regulating these procedures is the Financial Crimes Enforcement Network (FinCEN).

A non-documentary identity verification requires the user or customer to provide personal identity data which is sent to the identity verification service. The service checks public and proprietary private databases for a match on the information provided. Optionally, knowledge-based authentication questions can be presented to the person providing the information to ensure that he or she is the owner of the identity. An identity "score" is calculated, and the identity of the user or customer is either given the "verified" status, or not, based on the score.[2][3]

Customers of various businesses, such as retail merchants, government entities or financial institutions, are often required to present an identification to complete a transaction. For instance, a merchant may require customer identification for various types of purchases (e.g., alcohol, lottery or tobacco purchases) or when certain types of payments (e.g., checks, credit cards) are presented to pay for transactions. Financial institutions usually require customers to present an identification to complete a withdrawal or deposit transaction, cash a check, or open a new account. Government entities may require identification for access into secure areas or other purposes. Other businesses may also require identification from customers.

An additional method to service Identity Verification that is gaining industry prominence is through Artificial Intelligence, or more commonly referred to as Artificial-Intelligence based Identity verification. In this process, ID verification is performed through webcam. Mostly result is also available in real time as well.[4]


Identity verification service are used both online and in person to verify identities. These services are used in the financial service industry, e-commerce platforms, social networking sites, Internet forums, dating sites, and wikis to curb sockpuppetry, underage signups, spamming and illegal activities like harassment, Identity fraud, and money laundering.

Industries that use identity verification services include financial services, digital businesses, travel and leisure, sharing economy businesses, telecom, FinTech, gaming and entertainment.[5]

These services are employed before establishing bank accounts and other financial services in many jurisdictions. If a bank fails to meet diligence standards for certain directives, they risk having to deal with severe fines for non-compliance. For small banks, in particular, this could easily become a huge setback under certain directives without adequate knowledge. This lack of knowledge could cause financial ruin or, even worse, force an institution towards liquidation[6]

See also[edit]


  1. ^ "Risk Management – Fighting Fraud with Digital Verification Tools". Retrieved 2018-09-10.
  2. ^ Gupta, Jitendra (January 29, 2007). "Nobody Knows You're A Dog 2.0". ReadWriteWeb. Retrieved 2018-05-15.
  3. ^ Weiss, Todd (December 10, 2002). "VeriSign unveils new online identity-verification services". ComputerWorld. Retrieved 2009-07-10.
  4. ^ "How to use AI to fight identity fraud | TechBeacon". TechBeacon. Retrieved 2018-08-08.
  5. ^ "The case for digital IDs" (PDF). TechUK. 1 February 2019. Retrieved 18 April 2019.
  6. ^ "Noncompliance with AML and GDPR could Ruin Small Banks". Retrieved 2018-10-01.