Online identity verification, how it works and how secure your data is

Online identity verification procedures are often time-consuming, but undoubtedly increase security in the virtual world, prevent fraud and ensure compliance with regulations. Here’s what it checks identity online, including verification and authentication, really means how companies determine a person’s identity on the Internet.

What does online identity verification mean?

Online identity verification is the process of confirming a user’s identity online and guaranteeing that they are who they say they are. Unlike traditional face-to-face identity verification methods, online identity verification can be done remotely by collecting proof of identity, such as an official ID or capturing biometric information from the user.

Identity authentication takes place after identity verification and account creation, and it ensures that only the person whose account is using it. The primary purpose of online identity verification and authentication is to prevent illegal activities such as money laundering and fraud by ensuring that the identity of the person behind the account and communication is known.

How does online identity verification work?

The online identity verification process usually happens when a user logs in for the first time. The user will be asked to provide proof of identity, which usually includes personal documents and a photo, such as a passport or driver’s license. This document will be analyzed and saved in a secure database after confirmation. The user will then be asked to provide a biometric sample, such as a fingerprint or selfie, which can later be used to permanently authenticate the user. This entire process is made possible by platforms created for data verification, such as that of the company Incode, which makes identity verification available to every user who owns a personal device with a camera.

What are the benefits of using an identity verification platform??

The correctness of the identity verification process is of key importance, due to the security of user data, compliance with legal obligations and prevention of fraud. Traditional verification methods, such as physical verification of personal documents, have significant drawbacks. For starters, they often require customers to make in-person visits, further complicating online transactions and digital services.

But more importantly, traditional methods of proving identity are no longer adequate. Markets for personal data, such as insurance numbers, driver’s licenses and passports, speak to the vulnerability of this data. The same applies to email addresses, security questions and passwords.

Using software specially designed for identity verification ensures the correctness of the entire process, and the advantages of using identification software include:

  • Automatically embed authentication best practices into processes
  • Avoiding asking for proof of identity for every transaction
  • Compliance with legal obligations related to privacy and the fight against fraud
  • Creating a user experience that avoids common problems
  • Creating trust among users

Misconceptions about online identity

Although online background check software has many advantages, people still have certain prejudices against the use of this type of technology. Here are some of the most common misconceptions out there.

Identification software is always “watching”

Some people are concerned that companies store biometric data such as fingerprints and data related to facial analysis and that it could be used to monitor users. Data is carefully regulated, and governments do not access private databases held by companies.

Personal data is less secure when it’s digital

Think about how vulnerable your personal information is when it’s in your wallet or backpack. A driver’s license, credit card or passport can easily be stolen. Your digital data with multiple protections can be more secure than your physical cards.

All associated data can be accessed

Some people worry that authentication software will give away all their information. When your information is verified, apps only see information relevant to the interaction. Digital identity verification software makes it easy to control which apps have access to which data.

The four most popular online identity verification methods

There are several different ways to verify your identity. Standard online identity verification and authentication methods include knowledge-based authentication, two-step authentication, credit bureau-based solutions, and ID verification. Here’s a description of these online identity verification methods and the pros and cons of each:

  1. Knowledge-based authentication

This method uses information that the user knows and remembers to verify their identity, such as passwords, PINs, or security questions. The advantages of this method is that this model is generally used and users are used to it. On the other hand, there are some shortcomings. The problem is that people don’t always choose good passwords or remember them, so hackers can break into accounts. Also, it can be easy to find answers to security questions on social networks, which can lead to serious problems and frustration.

  1. Two-step authentication

To increase the security of knowledge-based authentication, many organizations now require users to confirm their identity in another channel in addition to entering a password. This secondary channel can be email, SMS messages or authentication applications. Using an independent channel significantly contributes to security and creates a strong deterrent against unwanted subjects, also this method of confirmation is practical as most people now have a smartphone. However, this procedure requires users to have their authentication factor (eg smartphone) with them at all times, and the phone number may change or get lost. Also, the whole process can be slow and create complications in the user experience, and an additional problem is that a third party is introduced into the whole process, such as a mobile operator.

  1. Credit bureau based solutions

Some identity verification solutions, especially those involving financial transactions, now use services offered by credit bureaus. These bureaus have a wealth of information on individuals and allow companies to call their database and look for identity matches. These companies are authoritative and already have databases of verified information, which is certainly an advantage. The identity verification process provides a definitive match with an unobtrusive user experience. Although this method sounds optimal, there are also drawbacks. Credit bureau databases exclude people who rarely used financial services in that region, and the method itself is not as reliable for people with common names and can lead to false positive matches. It also requires companies to state in their terms and conditions that they will perform a credit check and operates only in geographic areas covered by certain credit bureaus.

  1. Confirmation of personal document

Confirmation of an identity document is one of the most common methods for confirming identity. It implies that users provide a high-quality image of the personal document. The software will then classify the type of identification document and compare it with the verified image of the document in the database. Software companies, such as the Serbian-Mexican startup Incode, are increasingly offering advanced analytics driven by artificial intelligence and computer vision to determine whether an identity is authentic. This method with good software enables a fast and simple process, and advanced analysis can help detect fraudulent documents.

Identity confirmation method on the Incode Omni example

Omni is one of the most advanced authentication platforms that offers over 50 authentication components. This allows businesses to tailor the identity verification process to their needs. The platform can verify personal documents, perform credit bureau authentication, perform facial recognition and authenticate fingerprints, among other tasks.

The Omni platform uses artificial intelligence to create risk scores. This system is powerful because it can be adapted to any industry. The platform not only prevents 99% of fraud, but also provides a convenient experience for customers.

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Source: ITNetwork by

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