How to Get Started with Digital Identity Verification Right Now [With Checklist]

Bryn Saunders, December 2, 2020

The impact of the global pandemic has caused some unexpected changes for the finance, insurance and healthcare industries – rather than grind operations to a halt, it has accelerated digitization efforts. Though face-to-face activity may be restricted, individuals and businesses still need access to loans; homes and automobiles still need to be financed and insured; and healthcare providers need to be verified before they are enrolled in critical systems.

Due to branch closures, social distancing and health precautions, many of these processes now need to take place online. But while some organizations can support these processes remotely, many are left exposed because they lack the digital identity capabilities needed to do so.  

So where do you start? In this blog, we’ll cover the best ways to get started with digital identity verification in your organization.

Understanding the Role of Identity Verification in your Organization

Organizations of all types – including financial services, insurance, healthcare, and government – leverage identity verification and authentication to provide access to their services, help mitigate fraud, and maintain compliance with regulations. Identity verification is the important process of ensuring that a person is who they claim to be.

Digital identity verification can be achieved using a variety of technology tools – from document verification (scanning a government-issued ID document to determine if it is legitimate), to facial biometrics, one-time passcodes and more.

Some common scenarios for deploying digital identity verification include:

  1. Remote Account Opening: A new customer wants to open an account remotely, such as a checking or savings account, or apply for a loan.
  2. Account Maintenance: An existing customer wants to make changes to an account, such as changing their address, adding a spouse or child to an account, or designating a new beneficiary.
  3. Additional Product Offerings: An existing customer wants to apply for an additional product offering, such as financing, a loan, or a new insurance policy.

Financial institutions in particular work with identity verification when onboarding customers. When a customer wants to open an account, banks must follow strict procedures to verify the customer’s identity in order to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. While requirements vary per country, the process typically involves verifying the authenticity of an identity document such as a passport, ID card, or driver’s license.

Traditionally, a customer would walk into a bank branch with their identity documents, and a bank employee would verify those documents and make photocopies. But this process has changed in an era of physical distancing and remote interactions. With an increasing number of applicants hesitant to visit a bank branch to open an account, digital identity verification has become a key requirement for remote account opening and onboarding procedures.

Selecting the Appropriate Identity Verification Solution

There are numerous identity verification solutions on the market today. Increasingly, organizations are implementing document-centric identity verification techniques. In fact, Gartner predicts that by 2022, 80% of organizations will be using document-centric identity verification as part of their onboarding workflows .

Document-centric identity verification anchors an individual to their identity by verifying their ID document and ensuring that the person in possession of the document is the person on the document (thereby helping to detect fraudulent or stolen ID documents). The process is straightforward and secure:

  1. Capturing the ID document: Using a mobile device, the applicant takes a photo of their ID document, such as a passport, ID card, or driver’s license.
  2. Verifying the ID document: Behind the scenes, artificial intelligence and advanced authenticity algorithms analyze the image to determine whether the ID document is fraudulent or genuine.
  3. Verifying the applicant against the ID document: The photo on the document is compared to a “selfie” provided by the applicant (facial biometrics). To ensure that the applicant is genuinely present during the process, they are asked to smile, blink, or nod their head (liveness detection).

Additionally, the customer can provide an e-signature in the same session, if required as part of a larger agreement process. This is often the case in account opening, where banks must ensure that an agreement is legally binding and admissible in a court of law.

Selecting the right digital identity verification solution requires businesses to determine whether a solution or vendor can deliver document-centric identity verification to make sure remote customers and businesses have access to their services, while also helping to reduce application fraud.

How to Determine Whether an Identity Verification Solution Is Right for Your Business

When evaluating vendors, it’s important to ask the right questions. Financial institutions, insurance companies, healthcare providers and government agencies should look for answers that demonstrate that a provider can deliver the necessary functionality based on your organization’s usage scenarios and risk tolerance. The goal is to digitize each stage of the customer’s journey while also preventing application fraud.

In addition to using the questions below, you can also download our Identity Verification Readiness Checklist for a comprehensive list of questions to ask when evaluating digital identity verification solutions.

Digital Identity Verification Evaluation Checklist

Key Questions to Ask When Evaluating Digital Identity Verification Solutions

Questions on verification methods:

  • Does the solution allow for the following verification methods?
    • Identity document capture
    • Identity document verification
    • Facial comparison
    • Liveness detection
    • One-time passcode (OTP)
    • Knowledge-based authentication (KBA)
    • Trusted identity networks
  • Can different verification technologies be used for different transactions?
  • Can multiple identity methods can be used together to help meet Know-Your-Customer (KYC) compliance requirements?

Questions on verification capabilities, orchestration and coverage:

  • Does the solution support the orchestration of identity verification with a single API integration that offers the flexibility to optimize the process with minimal impact?
  • Is the solution scalable?
  • Does the solution cover all identity documents required for your customers and/or region?
  • Does the solution offer name/fuzzy matching capabilities to account for any variance between the Machine-Readable Zone (MRZ) and Visual Inspection Zone (VIZ) on an identity document?
  • Does the solution support varying levels of identity assurance (i.e. LOA-3 and above)?

Questions on Key Performance Indicators:

  • Are your average response times for each type of verification method under the industry benchmark of 15 seconds?
  • Do you have a guaranteed SLA for response times?
  • Are error rates (false positives or false negatives) generally under the industry benchmark of 5%?
  • Is there provision for service resilience if one of more identity verification method is unavailable?

Questions on data privacy and audit trails:

  • Is the solution provider able to give you a clear indication of what happens to the identity data once captured and how data is stored?
  • Does the solution provide a comprehensive audit trail?

Questions on user experience and workflow:

  • Is the solution fully automated, or does it use a mix of automated and manual verification?
  • Can the solution support e-signatures?
  • Does the vendor offer downstream authentication and fraud detection capabilities to support the entire digital identity lifecycle – pre- and post-onboarding? 
  • Can the solution be white-labeled?
  • Does the solution offer a mobile optimized UX?

Getting Started: What to Have in Place Before Implementing Digital Identity Verification

The best way to get started with digital identity verification is to understand your risk tolerance for identity verification, and in which processes you plan to deploy it. Here are three recommendations to get you started.

  1. Map out the events in the customer journey for which identity verification is required. This can also apply to your authentication workflows as well, so you don’t necessarily have to limit yourself to identity verification alone here.
  2. Link the identity verification capabilities that are applicable to each event in that customer journey.
  3. Understand the level of assurance that is required for each event. This is ultimate tied to risk and the process at hand, but it’s important to have this discussion with the right stakeholders in your business including compliance, security, and digital teams. The goal is to balance risk, security, and the customer experience.

A Hub Approach to Digital Identity Verification
OneSpan Digital Identity Verification solution uses a hub approach, enabling businesses to access multiple verification methods via a single API integration. The “one-to-many” integration approach results in higher pass rates and enables failover in the event of latency or downtime.

You can find out more about OneSpan Identity Verification and our hub approach here.

Digital Identity Verification Evaluation Checklist

Digital Identity Verification Evaluation Checklist

When evaluating vendors, it’s important to ask the right questions. Financial institutions, insurance companies, healthcare providers and government agencies should look for answers that demonstrate that a provider can deliver the functionality required, while also helping to prevent application fraud.

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1. Gartner, Market Guide for Identity Proofing and Affirmation, https://www.gartner.com/en/documents/3990087/market-guide-for-identity-proofing-and-affirmation

Bryn is a passionate product marketer with nearly 10 years of experience in the IT space. As Senior Product Marketing Manager at OneSpan, he is responsible for the go-to-market strategy for OneSpan Identity Verification. Driven by a great customer experience, he works to evangelize identity verification as a means to mitigate fraud while helping financial institutions stay competitive in market.