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Digital Identity Verification and Document Verification to Know Your Customer

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Customer Profile Validation

Digital Identity Verification and Document Verification to Know Your Customer

Document verification is important when onboarding new customers, depending on the type of bank you are running. KYC checks are now the norm in every industry, online and offline, no matter your business. Every business wants a long-lasting relationship with its clients, and every relationship begins with trust.

Document verification is the first step to creating that trust. Verification is crucial for businesses to guarantee that legitimate client accounts aren’t compromised and that they aren’t placing themselves at risk of fraudulent transactions. Customers also need to have equal trust in the company or bank. The initial stage in developing this trust is digital identity verification. Customers are more likely to return for additional purchases if they believe the procedure is fast, accurate, and secure. Additionally, businesses may concentrate on other tasks, like offering the most excellent experience possible, if they are convinced that clients are who they claim to be.

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Why is Digital Verification important?

Customers may lose control of their accounts if the documentation is submitted without notice and have money spent without their knowledge if their credentials are stolen. As victims learn the full depth of the problem, the effects of ID compromise can endure for months or even years. For instance, there are cases where victims receive calls from creditors from banks stating that they owe money and will have to face strict legal action. Deplorable document verification systems can help lower this risk by streamlining businesses to identify and thwart fraud before it gets out of control

Meanwhile, fraud and identity theft can cost businesses money because consumers may switch to more secure rivals or find the company’s inadequate data protection. Some of the reasons why electronic identity verification matters include:

Help to Prevent Fraud

Digital identity verification reduces discount abuse and increases the ROI of customized offers. Discount fraud is observed by businesses using identity marketing initiatives more than before.

Numerous businesses that provide students with personalized offers often compromise email addresses to confirm eligibility, which is quite a serious act. After a few years, many of the graduates still carry these email addresses. Utilizing faulty email address verification also restricts your audience because more than 40% of college students never received the wrong email address. Creating false email addresses is also simple, and many businesses lose money to fraudsters who do that. But digital validation is effective.

Help to carry out long-term relationships

Thanks to digital verification, customers are more likely to return when a procedure is quick, trustworthy, and secure. Contrarily, ID procedures that take too long are erroneous; keeping users in the dark about their status in the procedure or what will happen next will thwart efforts to forge reciprocal connections.

Respect Customer Privacy

Customers are concerned about the security of their personal information, and cases are growing in huge amounts. 4 out of 5 customers prefer not to do business with a company that doesn’t follow the right verification method and has faulty privacy practices. By requesting only the most basic personal information, digital verification protects their privacy. More than two-thirds of consumers are willing to share their name, birthdate, email address, and physical and mailing addresses for a personalized offer.

Privacy must be respected when implementing an identity marketing program that targets college students.

Helps in Boosting Operational Efficiency

Through automation, reliable digital identity verification tools help to increase overall productivity. The correct tools can decrease the need for manual review of PII and boost overall decision-making speed without compromising security by utilizing complex data analysis and comparison algorithms.

Increase the Confidence of Consumers

Customers are frequently eager to give businesses access to their personal and financial information to ease friction and speed up transactions. To avoid having to enter their credit card information each time they wish to make a purchase, users can, for instance, allow a website to remember it. Customers who find it comfortable can feel more at ease with the process thanks to secure and open digital verification services that reduce the overall time and energy spent reviewing documents and details manually.

Different Types of Digital Identity Verification :

Knowledge-Based Authentication

Knowledge-based authentication (KBA), which asks for an answer to security questions, confirms a person’s identification and general information sent. These questions are generally made straight for the person answering them but challenging for everyone else. Like “Who was your favorite teacher?” or “Which pets do you love?” A further precaution for KBA is the necessity to respond to the questions at a specific time. The fact that KBA is the most user-friendly verification method has the most advantage. However, the drawback of this method is how simple it is to find solutions through social networking

Education Verification (590 × 400 px)11

Two-Factor Authentication

In this type, the customer enters a code given to their email or mobile phone as part of two-factor or multi-factor authentication. Today, many online services use the verification technique; consumers may easily recognize and comprehend how to utilize it. You may quickly confirm a customer’s email address and phone number with 2FA or MFA. The process is critical; you need to be sure your consumer did not enter their info improperly.

Users need to provide their identification, commonly referred to as a token, along with the regular username and password when using the two-factor authentication.

Credit Bureau-Based Authentication

In the credit Bureau- based authentication, data from one or more of the credit bureaus are collected. The data involves name, address, and social security numbers. These are an important part of customer verification.

Credit-based authentication establishes a certain match of customers without jeopardizing the data for business benefit. However, for young people and new immigrants with thin credit files, it might not match.

Database Methods

Database ID techniques help check an individual’s identity card using information from many sources. Since the method helps assess the overall risk for the user, there is no need for manual reviews. Due to the prevalence of fictitious online identities, this method’s biggest drawback is that it doesn’t guarantee that the person supplying the information is also the one carrying out the transaction.

Online Verification

Artificial intelligence, machine learning, and human assessment are a few methods used in online verification to establish whether a government-issued ID belongs to the users. This verification technique often asks users to upload a photo of themselves holding an ID to confirm that the person on the ID is the same. Online verification is highly secured and is now followed by every other website. Still, some users find having to provide a photo of their face and ID to be a hassle or an invasion of privacy.

Biometric Verification

Based on bodily traits, biometrics helps in identifying and authenticating people. Facial recognition, iris, voice recognition, retina scanning, and fingerprinting are all examples of biometric technology. Customers who use these techniques will find them quite convenient because there are no passwords to remember or questions to respond to.

Using the Best Digital Identity Verification Service

It is best to connect with professionals to make the best use of electronic verification identification through modern tools. MIMOIQ is the leading company that deals with background checks and identity verification for NDFC, banks, and e-commerce companies. With the nationwide coverage, the company uses professional and agile technology, including geo-tagging, online data verification, and others

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How is Customer Profile Validation/Field Verification done in the Banking and Finance Industry?

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How is Customer Profile Validation/Field Verification done in the Banking and Finance Industry?

There has been a massive change in customer onboarding and field verification processes in the past few years. Customer profile validation is an important part of easy onboarding and ensures the customer has a clean profile. Also called Customer Due Diligence, it is the procedure for gathering and confirming customer information. It includes the client’s name, address, and other private information.

When creating a business partnership, companies must perform CDD or field verification. For instance, a bank or trading platform might need to look up the person’s passport before allowing a consumer to open an account and make a deposit. In this article, we will check how profile validation/field verification is performed in the banking industry. But before that, let us check on customer profile validation. 

Table of Contents

What is Customer Profile Validation?

The bank performs credit card, KYC, and retail asset product validation. It is the critical stage of the product development process.  

The process helps to examine customer problems, the target market, and the banking product. After the validation process, the product can be iterated upon to discover the ideal market fit. Additionally, validation links the product with potential customers and paves the way for developing useful items consumers desire and need. These products include personal loans, auto loans, business loans, education loans, commercial vehicle loans, loans secured by real estate or mortgages, and home loans. 

What is Field Verification?

A vital step in a financial institution’s risk and credit approval procedure is field verification, also referred as contact point verification (CPV), background verification (BV), or field verification (FV). It enables the independent verification of important details about current or potential customers through in-person visits and other necessary due diligence procedures before establishing a banking or lending relationship.

When does the Customer Profile Validation take place?

The process of field verification should happen as early as possible in the banking system before a product team spends a lot of time and money developing a new product, of course. Your theory doesn’t need to be accurate. It only needs to be specific enough for you to know who you might want to talk to, what difficulties they could be having, and how your product might be able to help. 

Steps for Customer Profile Validation/Field Verification

Since we have covered what customer profile validation means and why it is important, let us check the steps involved in doing the job perfectly. 

Verifying the Customer

The first step in customer due diligence is gathering basic details about the client. Whether this customer is an individual or a business will determine the necessary list of data.

Confirming a person

Depending on the jurisdiction, you may need other details, but the following provides a standard starting point for identifying people:

  • Full name, home address, government-issued ID, and tax identification number.
  • Banks can use these documents with the customer's photo supplied by a responsible third party to confirm the identification of a customer. It could be a passport or an ID card.
  • Banks can use recent (up to six-month-old) energy bills, municipal taxes, and bank account statements to confirm a customer's residential address.

Verifying the company

Field verification isn’t limited to customers only; banks also need to do company verification. Businesses must ask for and confirm specific information before partnering with other organizations. While the detailed list can vary between jurisdictions, the following is a common starting point:

  • Trading name, registration number, and registered corporate name;
  • Complete address of the head office and registered office;
  • Location of primary operations; Contact information

The objective of taking these steps is to learn about the company’s beneficial owners. These people control over 25% of the corporation, directly or indirectly, or through other means. It is important to verify beneficial owners after being found.

Banks usually demand certified copies of the paperwork confirming the company’s legal foundation and the records showing all shareholders before lending over the loan or opening an account.

Choosing the right Customer Profile Validation Track

Banks can select between regular, enhanced, and simplified due diligence depending on the customer. For instance, a bank can still onboard a customer if it knows they are a public official (a PEP), but an extra check is required.

Ensuring Security when Having Profile Validation

Fraudsters have been known to send legitimate documents and even dark net selfies. Since there hasn’t been any document tampering in this instance, even the most trustworthy verification systems won’t find anything odd. Businesses can add a second facial biometric check-called liveness to prevent thieves from onboarding clients remotely. This check guarantees that the identity of the genuine document holder is verified.

Things to Remember in the Customer Profile Validation Process Conducted

Let us check some things the individual should know while conducting customer profile validation:

Mandatory

Mark the field under “Mandatory,” preventing it from being left empty. A star (*) symbol will appear next to the field name and any required fields. Incomplete “mandatory” fields prevent managers of content from saving entries.

Uniqueness

Unique marking helps in preventing the duplication of the content in the document. The validator will ask the user to alter the duplicate value each time they enter a previously entered value into a field that is meant to be unique.

Number of characters

Setting up the character restriction will ensure that users only enter the text that fits inside the field’s maximum or minimum character limit. For instance, if you wish to add a “Password” field to your website, you should specify the limit for the cell. The number of characters validation criterion is useful in this situation.

Types of Customer Profile Validation

Also known as data validation, different procedures ensure all the data included is accurate. Some of the types of data validation are:

Data Type Check

In this type, it is checked if the right data type is included in the document. If so, the system should reject any data that includes additional characters, such as letters or special symbols. A field, for instance, might only accept numerical information.

Code Check 2

A code check verifies that a field is chosen from an acceptable list of values or that it adheres to specific formatting guidelines. For instance, comparing a postal code to a list of legitimate codes makes it simpler to confirm if it is valid. Another element is the country code.

Format Check

Numerous data kinds adhere to a predetermined format. Date columns with a set format, such as “YYYY-MM-DD” or “DD-MM-YYYY,” are frequent use cases. Maintaining consistency over time and across data is made easier by a data validation process that ensures dates are formatted correctly.

Check for Consistency

A logical check verifies that the data entered is logically consistent. An illustration is determining whether the delivery date for a package is later than the shipment date.

How MIMOIQ is providing profile validation services all over India to NBFC and banks

MIMOIQ is the leading on-demand customer validation and last-mile delivery service in India. We undertake a complete tech-enabled customer validation service, concentrating on different cities from Tier 1 to Tier 4.


To ensure data validity, we employ skilled task associates and real-time monitoring technology, including geo-tagging, quality management, and real-time data transfer. Our service is not limited to customer profile verification but we offer document collection and verification services to NDFC and top banks in India.

Conclusion

The banking industry keeps updating its data on customers to ensure there is no fraudulent activity in the process. KYC, or customer profile validation, is now part of the customer onboarding process by banks. If you are entering the banking industry or financial services, then learning about field verification is a part of your job.

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