In today’s digital landscape, businesses have been promoting their services by implementing digital technologies to make them available to diverse customers worldwide. This digital shift has enabled scammers to employ advanced techniques to breach the financial credentials of fintech customers and drain their bank accounts. According to a report, 20% of new fintech companies faced external risks from cyberattacks in 2019. The fintech industry can utilize electronic identity verification solutions to prevent scammers from performing illicit account activities. Electronic IDV helps the fintech sector to limit synthetic identities and account takeover attacks by optimizing digital identity validation solutions.
What is Electronic Identity Verification?
Electronic identity verification is the process of validating a customer’s identity through digital validation methods. It enables the fintech industry to utilize artificial intelligence techniques to automate fintech operations, limiting the negative influence of counterfeit entities. Electronic identity helps to combat presentation attacks, synthetic identity fraud, and illicit account takeover attempts.
Online identity verification services enhance fintech operations as they allow them to reduce customer onboarding time with the help of optical character recognition and biometric verification services. The fintech sector faces several crimes involving impersonation attacks, which can effectively be minimized through facial recognition technologies. These solutions use advanced deep learning solutions to examine the customer’s facial characteristics and enable them to screen out the negative entities.
How Does the Electronic Identity Verification Service Verify Customer’s Identity in Fintech Operations?
The fintech industry utilizes advanced technologies to conduct its financial operations. This sector can optimize its services by incorporating electronic identity authentication solutions. They use advanced digital methods that prevent financial fraud and enhance the customer conversion rates. These methods include:
- Optical Character Recognition (OCR) Solutions: The fintech industry can access the OCR services to accurately and effectively extract the customer’s identity credentials and convert them in a digital format. This ensures that all the information is examined accurately, reducing the probability of letting the fake identities slide through.
- Biometric Solutions: The biometric technologies include facial identity checks and fingerprint scanning. Fintech companies can use these solutions to compare the customer’s live presence with the identity information stored on the government registries. It uses digital methods, which allow the examiners to conduct the customer’s facial examination through 3D motion and depth analysis.
- Blockchain Technology: This service allows the fintech sector to conduct highly secure financial operations. It enables only legitimate entities to access the bank account with a specific digital signature.
- Artificial Intelligence (AI) solutions: The AI identity authentication services enable the fintech sector to conduct an extensive analysis of customer’s financial histories and risk profiles, eliminating the probability of dealing with unauthorized and risky customers.
How Does AML Electronic Identity Verification Mitigate the Money Laundering Risks?
The fintech industry is highly susceptible to money laundering attacks. Imposters often disguise the illicit funds in the financial bank accounts of legitimate account holders. It is essential for the fintech sector to combat the money laundering risk to ensure customer privacy protection. The AML screening process enables fintech companies to screen the customers against several international lists, such as exit control lists, politically exposed person (PEP) lists, and criminal watchlists. These lists determine whether the customers were involved in illicit and risky financial activities. Electronic identity verification services validate the customer’s identity to mitigate money laundering attempts.
What are the Use Cases of Online Identity Verification Check in the Fintech Sector?
Electronic identity verification services have various essential use cases in the fintech industry. These solutions automate the identity verification process, improving the overall customer conversion rate. They promote remote verification services, which are desirable to all potential customers. Electronic verification of identity complies with the KYC rules and anti-money laundering regulations. The fintech industry can mitigate the consequences of non-compliance by following these regulatory obligations. They protect them from money laundering and financial scams.
Online identity authentication solutions verify the customer’s identity with high accuracy to provide financial access to only legitimate entities. The biometric verification provides accurate identity validation and can screen out illicit and risky entities. Customers can remotely get their identities verified through online video call platforms. They don’t need to visit distant places and carry sensitive documentation for identity authentication. The remote verification reduces the overall operational costs and errors that may arise if the verification process is conducted manually.
Summing It Up
Electronic identity verification is an essential identity protection solution for the fintech industry. The fintech sector faces several impersonation attacks and money laundering attempts. Electronic identity authentication solutions prevent such attacks from harming the fintech industry. These companies can utilize electronic identity validation services, which incorporate biometric verification, OCR services, and blockchain services, providing additional protection from fraudulent attempts. These can be used to minimize the verification cost because they optimize the remote verification for distant customers, streamlining the identity verification procedure and enhancing their conversion rates.
