The digital age has brought about new methods of identity verification. Verifying identity has gone beyond presenting passports and driver’s licenses. Consequently, there is also an alarming rate of identity theft and impersonation. Advanced photo editing tools forge passports, licenses, certificates, and diplomas.
Using paper documents as a means of identity has suffered enormous setbacks because of the number of identity frauds. Digital credentials offer a lasting solution to these problems by providing a secure way to issue, safeguard, and verify identities digitally. Governments, organizations, and individuals are transitioning to digital credentials for identity verification.
In this post, we will discuss the benefits of digital identity verification, the role of digital credentials in identity verification, and how digital certificates change the landscape for ID verification. We will also discuss identifying verification providers and factors to consider when choosing one.
What is Identity Verification?
Identity verification is a process that authenticates an individual’s details. It involves verifying the accuracy of personal information an individual presents to determine if they are who they claim to be. Identity verification is required in every industry to mitigate risk, fraud, or impersonation.
In the digital world, identity verification is vital to confirm an online identity. Digital identity verification is a process that binds an online identity to personal information. It helps to verify the actual details of an individual and build trust in an online setting.
Why is Identity Verification Crucial Today?
The need to eliminate identity theft and impersonation has made identity verification crucial in every industry. For instance, impersonation and certificate forgery are common in the education sector. With the rise of digital interactions, identity verification is essential for the following 4 reasons:
Prevent Fraud and Scams
Identity verification is essential for preventing fraud and scams. Cybercriminals commit illegal activities by impersonating identities. ID Verification processes ensure that the correct user has access to sensitive information.
Security
Identity verification helps to safeguard personal and financial information. Identity verification provides an extra layer of protection for sensitive data in digital platforms. In addition, adequate identity verification builds trust and maintains the integrity of a digital platform.
Secure Online Transactions
Secure online transactions are possible when both the receiving and sending parties have been verified. Identity verification has made e-commerce and online banking safe.
Compliance With Legal Regulations
Identity verification ensures compliance with regulations to prevent fraud and money laundering. For instance, Know Your Customer (KYC) and Anti-Money Laundering (AML) laws are essential for various banking, healthcare, and telecommunication businesses. Failure to comply with these regulations leads to heavy penalties.
What Are The Different Methods of ID Verification?
There are different methods for verification of identity available in the world today. Each ID verification technique has its peculiarities, pros, and cons. Here are 6 common forms of ID verification:
- ID document verification
- Knowledge-Based verification
- Biometric verification
- Database verification
- Online verification
- Two-factor authentication
ID document verification
ID document verification is a method that requires individuals to be verified using government-issued documents such as a driver’s license, passport, or ID card. Though it is one of the oldest forms of identity verification, ID document verification has always been a reliable way to verify an individual’s identity.
The transition to digital credentials will solve the problem of ID fraud or identity theft common with paper IDs. Governments around the world are issuing digital credentials to replace traditional IDs. Digital driver’s licenses and National eID numbers are gaining popularity every day.
Knowledge-based authentication (KBA)
Knowledge-based authentication (KBA) is a type of verification that verifies an individual’s identity based on knowledge about peculiar questions. Knowledge-based authentication requires that only an authorized individual should have the correct answers. Examples of knowledge-based questions include PINs, passwords, and security questions such as “What is your pet name?”, “What is your favorite color?” etc.
Knowledge-based authentication is one of the most common types of identity verification. The upside of KBA is that users found it easy to understand. In contrast, knowledge-based authentication can be guessed, which makes it less secure.
Biometric verification
Biometric verification is a method that involves using different physical attributes to identify an individual. Typical physical characteristics used for biometric verification are fingerprints, facial recognition, voice recognition, and retina scanning. Biometrics identity verification system is a secure and convenient way to identify individuals because physical attributes cannot be stolen or manipulated easily.
Database verification
Database verification is an ID verification method that uses different sources to identify an individual. Database verification works by scanning an individual’s ID card through several databases for identification. Database verification eliminates the need for manual reviews, which makes the process fast. This type of verification is used for profiling and assessing an individual’s risk level.
Online verification
Online verification is a method that involves using artificial intelligence, computer vision, or facial recognition software to verify an individual by the provided ID. This verification method is convenient for users as it involves providing a headshot photo of the individual and a picture of a government-issued ID.
Two-factor authentication
Two-factor authentication, known as 2FA, is a method that provides additional security for PINs and passwords. The 2FA verification method requires the authorized user to send a code to the phone number. This method of verification provides an additional level of security for users. In addition, it is a convenient verification method.
Multi-factor authentication (MFA) is similar to 2FA. With multi-factor authentication, the user must provide additional security to get verified. Standard authentication methods of MFA are one-time codes, biometric data, and authenticator apps.
What is the Role of Digital Credentials in Modern Identity Verification?
Digital credentials are the digital representations of paper certificates. Digital credentials are a means of electronically storing and verifying personal information, achievements, and qualifications. Here are 5 crucial roles of digital credentials in modern identity verification processes;
- Eliminate fraudulent activities such as certificate forgery and impersonation.
- They are used as proof of identity since they contain personal information such as name, address, and date of birth.
- Verified instantly.
- Individuals have control over access to their data.
- Digital credentials streamline verification processes by reducing the need for in-person verification and manual checks.
What Does Blockchain Do in Identity Verification?
The underlying problem of identity verification is the ability of bad actors to manipulate identity. Blockchain technology provides a transparent and secure infrastructure for identity verification. With blockchain technology, it is impossible to falsify an individual’s identity. Here are three ways blockchain technology improves identity verification;
Speed
Identity verification can be done in seconds with blockchain technology. With blockchain technology, digital identity can be verified instantly. Once an identity has been confirmed and recorded on the block, subsequent verification becomes quicker.
Data Security
The traditional method of storing identity is on centralized government databases. Hackers often target weak databases. Blockchain networks provide high security for data storage; they are immutable, and falsifying identity is impossible. In addition, blockchain technology gives users total control over access to their personal information. Individuals share their knowledge with anyone at will for verification.
Accessibility
Millions of individuals need proof of identity in the world. However, they cannot get it due to cumbersome paperwork, lack of access, and cost. Blockchain-based digital credentials can solve all these. Owing an identity can be done by using a mobile phone.
How are Digital Identity Verification Providers Changing the Landscape?
Digital identity has made verification quick, transparent, and accurate for individuals and organizations. However, transitioning from traditional IDs to digital identities has changed ID verification methods. Digital identity verification has gone beyond only verifying an individual’s personal information; it also focuses on user privacy and data security.
Blockchain integration is a one-way digital identity verification provider changing the landscape for ID verification. Blockchain technology provides a decentralized network to store and secure personal information. Digital ID verification providers ensure that identities are tamper-proof and can be verified instantly.
The introduction of reusable digital IDs reduces operational costs for governments and organizations. Reusable IDs are easily verified across different platforms, lowering costs and improving verification efficiency.
What are The Benefits of Digital Identity Verification?
Verifying an individual’s identity using digital methods is known as digital identity verification. It involves verifying identities over the internet. 6 benefits of digital identity verification in our world today include;
- Enhance Security
- Fraud Prevention
- Reduced Cost
- Improves Customer Experience
- Improve Trust and Brand Reputation
- Regulatory Compliance
Enhance Security
Digital identity verification enhances data security by providing additional protection, such as MFA or biometric verification. Implementing digital identity verification solutions helps businesses safeguard customers’ sensitive information, making it difficult for hackers to get access.
Fraud Prevention
The use of digital identity verification prevents identity fraud and impersonation. Businesses in the healthcare and banking sectors can verify the identity of individuals for sensitive transactions. Advanced technology, such as AI and face recognition algorithms, can detect identity theft.
Reduced Cost
Digital identity verification saves the cost of hiring a team to carry out manual identity checks for customers. Using digital identity verification eliminates the risk of human error during verification.
Improves Customer Experience
Digital identity verification streamlines customer experience by providing a quick onboarding process. A brief verification process makes it easy for new users to join a platform. It also helps to improve the customer retention rate of a business.
Improves Trust and Brand Reputation
Businesses gain customer trust through digital identity verification because it proves the platform is secure. A secure platform assures customers of the safety of their private information and assets, thereby improving the reputation of a business.
Regulatory Compliance
Digital identity verification is essential for a business to be regulatory compliant. The Family Educational Rights and Privacy Act (FERPA) is a requirement for companies in the education sector. This regulation helps to protect the privacy of student records. Identity verification helps businesses meet those requirements.
Digital identity verification also helps businesses meet data privacy regulations. This includes laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
Choosing The Right Identity Verification Service
As a digital business, choosing an exemplary identity verification service is essential for growth, scaling, and security. The wrong choice will lead to significant setbacks and possibly heavy regulatory fines.
What are The Factors to Consider When Selecting an Identity Verification Provider?
There are many identity verification solutions worldwide, and picking the right one to suit your business needs is essential. Here are the 6 critical factors to consider before selecting an identity verification provider:
- Assess your Business Needs
- Security Measures
- Compliance
- Verification Method
- Cost
- User-Experience
Assess your Business Needs
Before choosing an identity verification provider, you must know your business needs. Different businesses require different types of verification. Evaluate the verification feature that fits firms in your industry. For example, educational institutions would require identity verification providers that offer document verification. On the other hand, financial institutions can use passports, digital credentials, and biometric verification to prevent fraud and money laundering.
Security Measures
The type of security measures employed by your chosen ID verification providers is a significant factor to consider. Does the ID verification provider have certifications proving security measures to protect data and identity theft? How do they store your private data?
Compliance
Ensure the ID verification provider complies with relevant legal and industry standards. For businesses in the healthcare sector, HIPAA is vital to secure a patient’s medical record. ADA and FERPA are industry-specific regulations to protect students’ records.
Verification Method
Check out the range of verification methods offered by the provider. The verification provided should align with your business model. Standard verification methods include document verification, facial recognition, and fingerprint scanning. Knowing that the verification method offered by your chosen provider affects the accuracy of identity checks is essential.
Cost
Ensure you understand the provider’s pricing model, including setup costs, transaction fees, and additional charges. The pricing should be within your budget and usage expectations.
User-Experience
Choose a provider that provides an easy and seamless verification process for users. A user-friendly platform improves customer experience and the onboarding process.
Conclusion
Verifiable digital credentials represent a significant advancement when it comes to identity verification. Government, educational institutions, and employers issue digital credentials as a means of identity. In addition, individuals can present digital credentials as a means of ID.
With the growing number of privacy rules and online businesses, providers must adopt digital identity verification. At Diplomade, we leverage blockchain technology to protect personal information and user privacy. We perform identity verification using KYC method and link your identity to your immutable blockchain address. Our approach will eliminate the problems of identity theft across various industries, contributing to a trustworthy digital future.
