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Why Identity Verification Is So Important for Digital Care of Finances

Oct 20, 2021 MicroBilt News

Why Identity Verification Is So Important for Digital Care of Finances

Remember the days when you had to physically walk into a bank or a retail store to open an account? You flashed your ID, signed a few forms, and voila! 

Fast forward a few years to the digital era. The pandemic helped to accelerate the already popular trend of doing as much as possible online. In fact, in 2020 alone, over 70 billion real-time payments and transactions took place around the globe.

We all love the convenience of making purchases, opening accounts, and applying for jobs from our computers or smartphones. But at the same time, it makes identity verification that much more important (and that much more challenging) for business owners.

Whether you're a financial institution, a private lender, or another type of retailer, you can't be too careful when it comes to verifying the identity of your customers. Keep reading as we discuss this important topic in detail!

What Is Identity Verification?

How do you know that the person on the other side of the computer screen is who they say they are? How do you know if you should lend them money, allow them to open an account, or otherwise conduct business with them?

As mentioned at the outset, it's no longer a matter of taking a peek at their driver's license or passport. Before you approve someone for a loan or an account, you need to know:

  • Does this person actually exist?
  • Are they truly who they say they are?
  • Is it safe to do business with them?

If this sounds like a case of paranoia, think again. Consumers lost $56 billion to identity fraud in 2020, and that figure keeps climbing every year. Even if you've always done things "the old-fashioned way," that's no longer enough to remain safe and secure in a digital world. 

This is the main reason why there are ID verification requirements for financial institutions. Here's a quick overview of three key regulations you need to know about.

1. Customer Identification Program (CIP)

Sometimes interchangeable with the KYC (which we'll get to in a moment), a Customer Identification Program is a must-have for all financial institutions. It ensures you have the answer to the question, "Is this person real?" before you start doing business with them.

2. Know Your Customer (KYC)

A popular type of CIP, Know Your Customer is an essential step in the screening and onboarding process. It's one of the best ways to protect against synthetic identity fraud, identity theft, and much more.

3. Anti-Money Laundering (AML)

This requirement covers a much broader range than the CIP or KYC programs. The goal is to ensure your financial institution remains safe from national and global money-laundering operations.

Identity Verification Request Tools

From IRS identity verification to unemployment identity verification (and everything in between), there's ample reason to prioritize this business technology.

Luckily, it's easy to find the tools you need to verify and authenticate identities. Consider three popular options.

1. ID Verify

Imagine if you could cross-reference someone's credentials and receive a customized "Fraud Score" for that individual. By analyzing over 60 different aspects of Personally Identifiable Information (PII), you'll quickly know whether that person or organization is trustworthy.

That's exactly what you'll get with our ID Verify product. It searches through everything from most-wanted and money laundering lists to high-risk addresses and death records. Most importantly, ID Verify enables businesses to meet the Know Your Customer (KYC) regulations mentioned earlier.

Who can benefit from this identity verification service? It's useful for lenders and retail financing, as well as tenant and pre-employment screening.

2. ID Authenticate

Have you ever tried to open an account or make a purchase and been asked a series of knowledge-based questions to confirm your identity? For example, you may be asked to select a previous address you lived at or verify the make and model of a car you used to own.

If so, you've had your identity verified through a product like ID Authenticate.

What makes this such a powerful tool against fraud and identity theft? Think about it: If someone swiped your ID, the only information they have is what's listed on it. They have no way of knowing that you used to drive a blue Chevy Malibu or you once lived at 233 Mulberry Lane.

ID Authenticate is a fantastic way to verify that the individual you're working with truly is the person they claim to be. It's easy to integrate into your online application or a call center conversation. From online consumer lending to retail sales and internet gambling, this is one product that's sure to offer peace of mind.

3. Watchlist Search

How much do you know about the USA Federal Patriot Act? It's one of the main regulatory requirements to screen applicants against a long list of federal violations, from money laundering to terrorism.

In fact, it's required for many employers, lenders, and other types of businesses as part of the screening process for individuals and businesses. To make compliance easier, you can use our OFAC Watchlist Search tool.

It's hard to imagine a fugitive, a terrorist, or someone from Interpol's Wanted Persons List waltzing through your doors for a job or a loan. However, in our digital era, you can never be too careful about who you're dealing with on the other side of the screen.

How an Identity Verification Service Can Help

As we've discussed, you can never be too careful when it comes to verifying the identity of your customers or employees. No matter the size of your business or institution, you'll need the right tools and technology.

Our ID verification and authentication tools are the answers you seek. They're a sure way to know who you're hiring or doing business with. Most importantly, they help to protect your business against fraud and identity theft.

Click here to learn more about our products or request a customized solution for your business. Whatever you need, we're here to make it happen!