What is a Digital Identity Check?

Verifying identity is a critical process for businesses, financial institutions and platforms that conduct business online. Aiming to  reduce identity fraud, help ensure security and better comply with regulatory requirements, a digital identity check is a key reason for using an identity verification service.

How do digital identity checks fight identity fraud?

Digital identity checks use advanced technologies to analyze digital information and credentials and help verify an individual accessing services online is who they claim to be. The process involves the use of various advanced tools, technologies and methods to provide faster, more accurate and reliable results:

1. Advanced verification techniques: Digital identity verification employs advanced techniques that go beyond traditional methods to better ensure a higher level of security and accuracy. Examples of such techniques include:

• Biometric verification: Biometric data, such as facial recognition, fingerprints and iris scans, provide a more highly secure method of verifying identity. Unlike passwords or PINs, biometric data is unique to each individual and more difficult to replicate or steal. By matching biometric data with verified records, digital identity checks help ensure the person accessing the service is who they claim to be.
• Machine learning (ML) and artificial intelligence (AI): Identity verification solutions often use ML and AI to detect anomalies and patterns indicative of fraudulent activity. These technologies can analyze vast amounts of data more quickly and accurately, better identifying potential fraud in real time and reducing the risk of human error.
• Multi-factor authentication (MFA): This adds an extra layer of security by requiring users to provide multiple forms of verification. For example, in addition to entering a password, a user might need to enter a security code sent to their mobile device or scan their fingerprint. MFA significantly reduces the likelihood of fraudulent access as it requires the fraudster have access to more than one piece of compromised information.

2. Device intelligence: As the world becomes increasingly digital, and with digital identity becoming multifaceted, assessing the riskiness of an associated device can provide key risk signals that enable a better understanding of the risk associated with an identity.

3. Real-time monitoring and alerts: One significant advantage of digital identity verification systems is their ability to provide real-time monitoring and alerts. These systems continuously monitor user activity and transactions, immediately flagging any suspicious behavior. For instance, if there’s an unusual login attempt from an unfamiliar location or sudden change in user behavior, the system can trigger an alert, prompting additional verification steps — thereby helping prevent fraud before it causes significant damage.

4. Broad database cross-referencing: Digital identity verification services leverage extensive databases to cross-reference information provided by users. These databases include credit bureaus, public records, mobile phone service operators, social media profiles, and other data sources. By comparing provided personal information (such as email address and phone numbers) with these trusted sources, identity verification tools can more quickly identify inconsistencies or fraudulent attempts.

5. Document verification and anti-tampering measures: Identity verification software can analyze the authenticity of uploaded documents, such as passports, driver’s licenses and ID cards. Advanced techniques help detect tampering, forgery and other signs of fraud like discrepancies in fonts, holograms and other security features embedded in official documents.

6. Enhanced security protocols: Identity verification platforms implement enhanced security protocols to better safeguard user data and help prevent unauthorized access. These protocols include encryption, more secure data storage and stringent access controls. By better protecting the integrity and confidentiality of user data, these platforms reduce the risk of data breaches and identity theft. Additionally, they comply with industry regulations and standards, helping ensure  businesses using that identify verification service meet their legal obligations for data protection and privacy.

7. Deterrence of fraudulent activities: The presence of more robust digital identity verification measures can act as a deterrent to potential fraudsters. When criminals know a business employs more stringent identity verification solutions, they recognize the higher likelihood of detection and failure and are less likely to attempt fraudulent activities.

What are common examples of digital identity checks?

Digital identity checks can be performed using a variety of methods and technologies, each suited to different scenarios and security needs. Here are some common examples:

• Biometric identity verification: 
  • Fingerprint scanning: Scanners capture the individual’s fingerprint patterns, which are then matched against stored data.
  • Facial recognition: Cameras capture an image of the user’s face and compare it to a photo on a government-issued ID or previously verified image in the database.
  • Iris scanning: This highly accurate process scans the unique patterns of the user’s eye and matches them against stored data.

• Document verification:
  • Optical character recognition (OCR): OCR technology reads and extracts information from ID documents, converting it into digital data for verification.
  • Hologram and watermark checks: Advanced software verifies the presence and authenticity of holograms, watermarks and other security features embedded in official documents.
  • Machine Readable Zone (MRZ) analysis: MRZs on passports and ID cards contain encoded information that’s cross-checked with the authoritative databases.

• Knowledge-based authentication (KBA): This requires individuals to answer security questions based on personal information only they are likely to know. Examples include previous addresses, loan amounts or account balances, or historical transactions.

• One-time passcode (OTP): OTPs are sent to the user’s registered email or phone number via SMS and must be entered within a short time frame to verify identity.

• Email verification: An email with a verification link or code is sent to the user’s email address. The user must then click the link or enter the code on the website to confirm their email address.

• Phone number verification: Phone number verification confirms the individual has access to the phone number they provided, either by SMS (a code is sent to the phone number which the user must enter on the website or app) or by voice call (the user receives a voice call with a code or automated message to verify their number).

• Bank account verification: This confirms the validity of a user’s bank account details. Two common methods are micro-deposits (small amounts are deposited into the user’s bank account and they must confirm the exact amounts), and instant bank verification (IBV) where the bank uses a secure connection to verify account information in real time.

• Device Intelligence: Looking at the device associated with an identity can provide additional signals that can help enable a more comprehensive assessment of the risk associated with an identity.