Document verification might sound great, but it requires the companies to put their time, money, and HR to place a secure identity verification procedure. Placing a complex verification procedure might annoy the clients and reduce the overall customer experience while not having a verification solution loses the client’s trust in the brand and would lose customers during the onboarding procedure.
To maintain a balance in such circumstances, AI-powered document verification came as a ray of hope. They are not only effective and viable but also hassle-proof. Let’s look at why these verification processes are important and how they can prevent financial and all other institutions from risk profiles.
Why is Document Verification Required?
The question that arises over here is why any entity needs document verification? So, the document verification is done for two purposes. Firstly, to combat the businesses from identity thefts and other sophisticated financial fraud, secondly, it helps the company to better comply with the global regulations.
As per the studies, identity fraud caused a loss of about 16.9 billion dollars in 2020. The destruction caused by identity theft does not only revolves around money but also involves racial, sexual as well as gender-related comments on social media which leads to many issues.
With Covid-19, digital banking and online transactions have increased, so does identity theft and digital fraud. There is no platform that has not ever been the target of fraudulent or criminal activities. To overcome this issue, all financial institutions including banks are shifting towards an AI-powered document verification solution.
Regulations to Combat ID Fraud
The regulatory authorities have made document verification obligatory for all the institutions whether it is an e-commerce, bank, financial, or any other institution. They all are required to follow the compliance. All the countries are obliged to follow KYC and AML guidelines. It is a legal requirement that would help businesses to fight all types of fraud effectively.
Document Verification Process
Online document verification services use Artificial Intelligence to verify the identity of an individual. The AI-powered verification systems only verify those documents which are issued by the government such as driving licenses, passports, ID cards, etc. The process of documentation verification involves a few steps. They are as under:
- The document verification software is first integrated with the company’s website as well as other automation systems.
- When the client logs in to the website, they are asked to provide their identity document issued by the government.
- Once the client uploads the image, it is scanned using OCR or “Optical Character Recognition” technology.
- The information extracted is then analyzed as well as verified against databases. The documents are also checked for any signs of tampering and forgery.
- If the documents provided by the client are not tampered with and are genuine, the user is allowed to signup on to the company’s website. If those documents are not authentic, they are disapproved and the client can’t have access to the company’s services.
Techniques Used for Fraud Detection
Document verification uses three kinds of analytics to check whether the document provided by an individual is authentic or not. The analytics which it uses include data integrity, document authenticity, and facial biometrics. All these techniques make the online document verification process not only accurate but also efficient when they are compared to manual verification procedures.
Benefits of AI-Powered Document Verification
The online document verification process provides companies with a lot of advantages including a really quick turn-around time. They have the capability to verify multiple documents across the globe even when each document has different fraud detection elements and rules.
Furthermore, when an entity uses a document authentication process that uses Artificial Intelligence, errors in the verification process reduce drastically. Another advantage of the process of verification documents is that they can detect even those frauds which the human eye misses out on.
It is true that the digital transformation has been going on for so long but the pandemic has pushed it into overdrive. With that, financial fraud is on the rise, and to reduce that, companies usually comply with regulations and end up introducing complex verification procedures that frustrate the clients and push them away.
It is really important to verify documents in such a way that provides a better user experience. To do that successfully, AI-powered document verification services are the best option. They also remove the need for a huge team to prevent the company from such fraud. AI-powered document verification is the future.