Electronic Identity Verification: What is eIDV?

In a world of increasingly sophisticated cybercrime, the need for secure, robust, and efficient identity verification measures cannot be overstated. Among the array of solutions available, Electronic Identity Verification (eIDV) has emerged as a reliable and effective tool for businesses worldwide.

This article provides an in-depth understanding of eIDV, its benefits, its application, and how organizations like KYC Hub leverage it to provide seamless customer onboarding experiences.

What is electronic identity verification (eIDV)?

Electronic Identity Verification (eIDV) is a digital process used to authenticate an individual’s identity. This process involves cross-validating an individual’s provided information with data from public and private databases. Electronic ID verification aims to ensure that the person claiming a particular identity is indeed who they claim to be.

Electronic Identity Verification is essential to any organization’s Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance procedures. It employs various strategies similar to manual identity verification, such as data analysis from government-issued IDs. Still, its digital nature allows for collecting a broader range of details and risk signals, making it a more informed and efficient approach.

The Rising Need for eIDV

With businesses and consumers increasingly moving online, an effective Electronic ID verification process has become paramount. This is particularly true for businesses operating within industries subject to KYC and AML regulations. These include online marketplaces, social media platforms, dating sites, telehealth services, digital learning platforms, and, most notably, financial institutions.

KYC Hub Identity Verification Solution

Implementing electronic identity verification doesn’t merely aid in mitigating fraud. It empowers businesses to meet their customers where they are—online—providing a better user experience and hopefully delighting them in the process.

How does eIDV Work?

eIDV can be performed using various technologies and methods, depending on the business’s needs and the level of risk involved. Here are some commonly used processes:

1: Government ID Verification

In this method, customers are asked to upload or take a photo of their passport, driver’s license, state ID, or other government-issued IDs. The system then extracts information from the ID and verifies its legitimacy through automated heuristic checks.

2: Document Verification

Users are required to upload one or multiple documents that can verify their identity details. These include birth certificates, Social Security cards, bank statements, tax returns, and utility bills. These documents are then scanned for signs of tampering or inaccurate data.

3: Database Verification

Database verification involves checking the user’s provided information against publicly and privately available databases, which could include issuing databases (like the DMV and IRS) and trusted third-party databases.

4: Selfie Verification

A user is asked to take one or more selfies, which are then compared against previous selfies taken by the user or the portrait on an ID. This method is often combined with government ID verification to provide a form of liveness detection.

Identity Verification: Complete Guide

Benefits of Utilising eIDV Solutions

Electronic identity verification offers several benefits to businesses, the most obvious of which is the ability to digitally comply with AML and KYC regulations.

This allows companies to meet their customers where they are and provide a better user experience, which can facilitate growth and scalability over time. Other benefits of implementing Electronic Identity Verification include:

  • Access to more signals: eIDV allows the collection of additional device and behavioral signals that might indicate a high risk of fraud.
  • Reduction in human errors: Automated verification reduces the chances of errors that could occur during manual checks.
  • Faster processing time: Automated verification can verify users in seconds rather than hours or days, avoiding bottlenecks.
  • Scalability: eIDV enables automation, making it an effective way to scale fraud and compliance teams without adding labour costs.
  • Improved conversion rates: Sophisticated technology enables quick verification, reducing friction and making successful customer onboarding more likely.
  • Enhanced privacy: With fewer humans exposed to customer data during automated verification, customer privacy is increased.

eIDV Versus Manual Verification: A Comparative Analysis

While manual identity verification requires physical documents from the customer, Electronic ID verification relies on online information and digitally supplied data. This eliminates geographical constraints and speeds up the verification process. Here’s a brief comparison:

eIDV vs Manual Verification

Industries Benefiting from eIDV

Banks and other financial institutions are the primary users of electronic identity verification, but its benefits extend to various sectors. Industries like professional services, gaming providers, employers, sharing platforms, transport, and even real estate might use eIDV in their onboarding and due diligence processes.

eIDV in Compliance with KYC and AML

Electronic identity verification, or eIDV, is a crucial tool for conducting several elements of AML and KYC checks. It forms the basis of a Customer Identification Program (CIP), Customer Due Diligence (CDD), and ongoing monitoring. Electronic verification, such as online database verification and document and biometric verification performed via a smartphone, has gained popularity due to its numerous benefits.

Security and Confidentiality in eIDV

As eIDV deals with sensitive personal information, data security and confidentiality are paramount. eIDV tools use advanced encryption techniques to protect information from unauthorised access or theft. They also adhere to strict data protection regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).

Types of Electronic Identity Verification

There are several types of eIDV that businesses can leverage. These include:

  • Document Verification: Users provide a photo of their ID, which AI then verifies in seconds.
  • Biometric Verification: Users provide a photo or video of their face for biometric verification after document verification.
  • Database Lookups: User information is compared with information from databases via an ID record check.
  • Watchlists: Businesses must conduct watchlist checks for sanctions, adverse media categories, and PEP lists.
  • Social Security Number (SSN) Checks: In the US, SSN checks can help protect against synthetic identity fraud.
  • Proof of Address (PoA): To meet CDD requirements, businesses should verify the proof of address.

The Future of Identity Verification

As we transition towards a more digital economy, the importance of digital identity and eIDV is becoming increasingly apparent. Governments and businesses are exploring technology trends that drive digital transformation, with the adoption of digital IDs being a prime example.

KYC Hub: eIDV Made Seamless

KYC Hub is at the forefront of providing robust compliance and electronic identity verification solutions. Our automated customer onboarding process leverages eIDV, streamlining the verification process and enhancing the overall user experience. We are just a call away; let us help you optimize your customer onboarding diligently!

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