Document Verification Approaches Explained


Many categories of businesses need reliable methods of verifying their customers’ identities. Not only does identification reduce the risk of identity fraud, but in the case of Financial Services, it’s required  to be compliant with KYC (know your customer) and AML (anti-money laundering) regulations.
However, a balance must always be struck between business requirements and customer experience. While it’s important to thoroughly verify your customers’ identities, many of them find excessive identification measures to be inconvenient or intrusive. Considering that 84% of consumers feel that the quality of the experience a business provides is equally as important as the quality of the products or services it offers, an effective yet frictionless approach to identification is essential.

Identification vs. Authentication

Identity verification, or identification, is often confused with authentication by the layman, while there are important differences. Organizations typically use identification when onboarding a new customer, and authentication instead when a customer wishes to access an existing account. Today, both processes are often handled digitally from remote.

Businesses use identity verification to ensure that a customer does not purchase a product or sign up for a service with a stolen identity. It’s also frequently used to verify a customer’s age when purchasing an age-restricted product.
Digital identification methods like facial recognition can be used to confirm a customer’s identity even if they are not physically present. Many companies require remote potential new customers to submit a photo of their driver’s license along with a photo of their face, and match them using facial recognition technology. Some customers, however, may consider such methods intrusive.

Authentication is a one-on-one process, used to prevent fraudsters from taking over legitimate customers’ accounts and to protect businesses from fraudulent activity and its repercussions. Requiring customers to enter a password or another piece of information only they would know is the most common example of authentication. Two-factor authentication, which usually requires customers to enter a passcode sent to another device they own, is safer than a simple password, and increasingly required by regulations to allow certain types of transactions. Biometric authentication, which authenticates a customer by recognizing biometric data like a fingerprint or iris, is intrinsically more secure and more convenient than knowledge-based authentication, since passwords are often stolen or leaked.

How to verify documents

Document verification determines the authenticity of an officially issued identification document such as a driver’s license, passport, birth certificate or other, and is usually part of identity verification: within an onboarding process, verifying that a customer’s identity matches the provided documentation is pointless if there is no guarantee that the document is legitimate in the first place. 

Companies use digital document verification when a customer’s identity must be verified remotely over the internet—for example, when a customer wants to make an age-restricted online purchase or log into an online bank account. Digital document authentication methods can capture document images and data, and use the information to indicate that the document is likely to be authentic. 

When in-person, i.e. with the ID document physically present, chances of capturing a fake and blocking a fraud attempt at the root increase, thanks to different authentication methods tailored to leverage the various types of security measures different document categories may contain.
Passports are very rich in security features and usually require dedicated readers, the ones you see at border control. Other ID documents are made of special paper, or more commonly in the formate of an ID-1 sized plastic card. If the card contains a barcode with the holder’s data, the data can (at minimum) be compared to the printed, human-readable data, decoded via OCR technology.
If the card embeds is a chip containing the data, writing to the chip is considered close to impossible even for skilled fraudsters, so you will likely gain access to chip reading by providing an OCR-decoded string, or a different type of key, and then verify the collected data – even a picture and/or a fingerprint – against the holder. It usually won’t be possible to read the data in the chip without an unlock code or string, the way you would do with a magnetic card swipe – and that’s why all modern ID documents should be equipped with a secure chip. Digital documents – such as the mDL (mobile Drivers’ License) in the U.S., are the mobile, immaterial version of chip-inclusive ID documents – and can transmit digital data, when authorized, via NFC.
Finally, should you run into an older generation ID document which contains no barcode nor chip, scanning them with Infrared and/or Ultraviolet light will allow you to leverage physical security features embedded in the way the document was printed. Digital document verification technology can also automatically check for physical criteria such as watermarks, holograms, and font conformity. Machine learning technology can train digital authentication engines to continually improve their ability to detect clues that indicate a document may be fraudulent.

Hardware equipment used for document verification will vary in form, functionality and price - and it's rather uncommon to find devices capable of coping with a range of different authentication methods without ending up bulky, complex and costly.

The Convenience factor

The more security, the better—except when it comes to customer experience. When customers are required to jump through multiple hoops to sign up for a service or access their accounts, they might easily feel bothered. Digital methods of document verification can simplify the first step of the identification process and help remove the barriers between customers and your business, while also maintaining security best practices.

Don’t forget that Panini’s market-leading EverneXt intelligent check scanner includes an ergonomic ID card scanning functionality, capable of imaging both sides of ID cards and making the high-resolution and high-quality scans available to the document authentication platform of your choice.

[Header photo by CardMapr on Unsplash]