Between 2017 and 2027, the global investment in identity verification is projected to increase by more than $13 billion, growing from $4.93 billion to over $18 billion. This significant rise highlights the importance of identity verification in information security by validating that only authorized individuals access sensitive data and preventing unauthorized intrusions. In the fintech sector, adopting strategic document verification processes is crucial. These processes integrate security measures into the system and also help maintain customer trust by protecting valuable information from data breaches. As a result, effective identity verification is becoming indispensable in fintech operations and improving the overall outcomes of the industry.
Let’s explore how the document verification process works in improving the efficiency of the working operations and study its core features to know how it assists in combating the potential frauds of identity impersonation or money laundering.
Comprehend the Operations of the Document Verification Process in Fintech Companies
In the fintech industry, the document verification process starts with gathering the user’s credentials, such as proof of address, financial documents, and identification papers, through digital means. Advanced technology such as optical character recognition (OCR) is utilized for extracting important information from the papers and analyzing to find their authenticity and accuracy. The extracted credentials are cross-checked with the authorized databases to identify any type of discrepancies. Machine learning algorithms are introduced for detecting any kind of fraudulent activity. Moreover, biometric authentication is conducted to add an extra layer of security. Sometimes, manual verification is also ensured for reviewing the flagged documents that are missed during automation authentication.
The main objective of the document verification process is to comply with all the regulatory measures of GDPR (General Data Protection Regulation), AML (Anti-money laundering), and KYC (Know Your Customer), which are considered an integral part of the procedure. Verification of documents in fintech operations assists in maintaining the system’s reliability in an enhanced way.
Core Features of an Effective Fintech Identity Verification Platform
Online document verification is prompt which is helpful in maintaining an effective fintech identity verification platform. Digital onboarding provides enhanced pathways for the fintech industry and makes the user experience more smooth. Some of the prominent features of identity document verification supplied to the platform are given below:
Adherence to Regional Compliance Standards
The document verification process in the fintech industry assists in complying with all regulatory bodies, which includes know your customer (KYC), anti-money laundering (AML), and identifying the politically exposed persons (PEPs). In this way, companies verify each onboarded customer or individual and mitigate the potential risks of identity impersonation and monetary losses. The timing of verify documents online varies differently in different countries and industries. For example, the document verification process conducted in the binance, crypto, and other related finance departments is through liveness detection, selfie authentication, and identification details. And the time required for that is 48 hours. Meanwhile, newly hired clients in the banking industry take 24 hours and can only be done through selfie verification.
Fraud Resilient
As the fintech industry lacks physical premises and usually conducts its operations digitally, it is essential to have virtual assistance for verifying documents of identity. In this authority, they execute potential procedures that ultimately lead to the mitigation of identity theft and money laundering fraud. Thus, the document verification process has an essential role in their conduction, which eventually leads to fraud-resilient factors and makes the overall experience more integral.
Client-Centered
To keep customers happy, the identity verification (IDV) process in Fintech should be smooth and easy. It’s also important to use the right language for clients from different countries. Accepting different types of IDs matters, too. This means IDV solutions need to be flexible. Technologies like advanced face or document capture can make the process smooth.
Technologically Enduring
Even though Fintech companies are often linked with younger people, people of all ages use their services every day. Some might have the latest smartphones, while others use cheaper devices with basic cameras and screens. Plus, they use different operating systems.
When creating an IDV solution, these differences in how customers use technology should be taken into account. The software needs to work well on various devices and platforms, including older ones.
The Bottom Line
The document verification process plays an enduring role in streamlining the fintech operation. As industries are moving towards digital frameworks, the divergence of the document verification process towards virtual identity authenticity services has improved the overall experience of the customers and also assisted the relevant industries in combating the major threats. The fintech industry has revolutionized its workings due to the implementation of IDV; therefore, it is recommended that other emerging businesses integrate these programs for enhanced efficiency.
