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 or passport, called documentary verification, or may verify identity information against authoritative sources such as a credit bureau or government data, called non-documentary verification.

Identity verification service is used both online and in person to verify identity. These services are used by some social networking sites, Internet forums, dating sites and wikis to stop sockpuppetry, underage signups, spamming and illegal activities like harassment, scams, and money laundering. These services are required to establish bank accounts and other financial accounts in many jurisdictions. If a bank fails to meet compliance standards for certain directives, they risk having to deal with severe fines. For small banks, in particular, this could easily become a huge problem under certain directives without knowing it. This lack of knowledge could cause them financial ruin or, even worse, force them to shut down.[1]

It was 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 reducing the costs associated with fraud.[2]

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.

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 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.[3][4]

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.

There is another method that is present in the market and that is artificial intelligence based ID verification. In this process, ID verification is performed through webcam. Mostly result is also available in real time as well.[5]

See also[edit]


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