22.04.2022 15:30

Identity Authentication – A Quick Guide to Curb Online Frauds

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In an online legitimate business, two aspects are very important, first is the security of your platform and second is the user experience. To attain both features at the same, it is crucially important to take in place stringent measures.

Identification of fraudulent behaviors in online business without compromising customer experience is a challenging task. Although it is a desperate wish to secure business reputation by all means. This article directs towards the security challenges in financial institutions and e-commerce platforms. Also, how fraud risks can be mitigated to meet both regulatory and customer requirements.

Programs for online customer acquisition demand high-level security and a seamless customer onboarding process. Here, opportunities and system vulnerabilities go hand in hand. The fraudsters are always in search of exploiting weaknesses in the system and through those loopholes, they try to breach it’s security layers. The sheer transactions taking place every second provide endless opportunities to money launderers, terrorist financiers, and other fraudsters to act malevolently in the system. Exponential growth in technologies and innovative criminal tricks are always in the race.

Every second, incidence of identity theft, online payment scams, credit card scams and data breaches take place. One of the main reason behind these bunch of attacks is an unauthorized data access. The entities in the system are not authenticated and therefore, taking and advantage of the privilege, they tend to attack the system. In online e-commerce platforms, these consequences are higher. The data website stores for customers are prone to identity theft through phishing attacks or data breaches. There is a dire need for business administration to be keen regarding digital verification and take in place the methods of user authentication and screening.

Electronic Identity Verification (eIDV)

By carrying electronic checks on government id documents, the identity of a customer is authenticated. The identity verification services are available that bypass the forgery techniques of fraudsters, identify the spoofed and photoshopped documents. It also conducts signature authentication to eliminate spoofing attacks. In an online customer boarding, there is no other substitute to verify the customers instead of electronic identity verification. eIDV undergoes face verification, biometric authentication, AML screening, document verification, etc. In addition to this, customers are screened against a number of lists of criminal records. These are:

Politically Exposed Persons (PEPs): These are individuals who have held a notable public function. This function influences them to undergo some illegal money transfer, it might be money laundering or corruption. As a result of this, they are regarded by serious financial actions by law enforcement agencies. eIDV solutions process identity screening with the lists of PEPs and regulated sectors establish digital verification checks that make sure no exposed personality becomes part of a legitimate system.

Sanctions: Jurisdictions specified sanction lists consist of individuals that are blocked pursuant. It is crucially important for especially online businesses and the finance industry to verify customers against these lists. To avoid the involvement of criminals, sanctions measures have become mandatory by local regulators.

Watchlists: Blacklists and watchlists hold official lists of individuals that are globally exposed due to some high-risks criminal record or past behavior. The list could include wanted criminals, disqualified dictatorship holders or money launderers.

Transaction Screening

Identity verification software monitors the transaction source and destination nodes. It looks for the recipient to which money is sent and authenticates the identity against several categories of exposed persons. Transaction screening acts as a final stage for online businesses to assure that they are not facilitating any criminal activity that could lead to reputational or regulatory risks. It is a binary check. If all parties agree on moving the transaction, it happens and if they don’t, the transaction is immediately halted.

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