In today’s technologically advanced world, artificial intelligence technologies and financial crimes are emerging at a parallel speed. Where AI brings convenience, frauds cancel them out. Among many cybercrimes, identity theft is, undoubtedly, one of the greatest barriers for online businesses to overcome. Based on the findings of an identity fraud survey conducted in 2018, 14.4 million reports about identity theft were made to the FTC. what makes the matter worse, is the rising cyber threats that have emerged due to COVID-19. Criminals are increasingly targeting firms to carry out fraudulent activities such as phishing attacks, data breaches, identity thefts, account takeovers, etc.
The Need for Document Verification
Any business that aims to sustain itself in a competitive market needs to ensure that its customer base is fraud-free. This is not only essential for the financial and reputational well-being of a company, but also a mandatory part of the KYC process. By integrating an automated document verification solution, firms can receive results with a high rate of efficiency, convenience, security, and accuracy.
Identity document verification is therefore utilized by numerous industries today. A few of them include:
- Financial services industry
- Real estate sector
- Online marketplaces
- Travel Industry
Let’s dig deeper into how identity document validation can be used by the above-mentioned sectors to prevent fraud.
Document Verification in Financial Sector
You might have experienced the document validation process when you went to a bank to open an account, file for a loan, or make a large money transfer. The document proofing procedure is mandatory because of one major threat – identity theft.
Faking an identity to gain illegal benefits is an offense punishable by law. A criminal can disguise their real identity in a number of ways. This can include using stolen credit card details, information obtained through data breaches, or using fake ID cards. Through these illegal activities, fraudsters enable themselves to share hate comments online, sell identity information on the dark web or the black market, file for an insurance claim, or open bank accounts in someone else’s name. These activities can also lead to bigger crimes if left undetected, including money laundering and the financing of criminal activities.
However, banks, insurance companies, brokerage firms, stock exchanges, fintechs, etc are now using biometric facial recognition along with documentation verification to weed out criminals.
ID Document Verification in Real Estate
The financial sector is not the only industry that is concerned with threats of money laundering and identity theft. The KYC (Know Your Customer) and AML (Anti-money Laundering) laws are also implemented by the real estate sector. This is because money launderers often use shell companies to launder dirty cash.
Between 2004 and 2015, the UK real-estate sector accounted for corruption worth £180 million.
To avoid this, FinCEN and FINTRAC are taking actions to combat the fraud being committed through the property business. One procedure among many includes document verification. This ensures that the property being purchased was previously owned by a legal entity and is being transferred to a legal customer as well. Additionally, document verification is also used to automate contract signing, verification of employees, etc.
Document Verifications in an Online Firm
Online marketplaces include the likes of digital payment platforms, cryptocurrency providers, and e-commerce retail stores such as Amazon. Since most of the data in such businesses are stored online, it creates an opportunity for cybercriminals. At times, criminals use fake identity documents to verify their ID and to bypass security checks. Without an automated document checking system, false, fake, and modified documents can be left undetected.
Document Checks at Airports
Just like an ID card can be stolen at an ATM, a travelers ID can be stolen at airports. By taking preventive measures such as using VPNs instead of public internet networks, securing your accounts through fingerprints, and providing identity documents for verification at security checkpoints, major frauds can be avoided.
The goal of the airport security team is to safeguard the passengers from imposters and criminals using fake and stolen documents to board a flight. In this case of identity theft, the fraudster can be weeded out simply by requiring all passengers to prove their identity through official identity documents such as a valid visa and passport number.
Through AI-powered identity document verification solutions, organizations from any business sector can effectively prevent falling into the trap of identity thieves, money launderers, and criminal organizations.