In the world of online trading, identity verification is a critical step in ensuring the safety and security of all parties involved. By verifying the identity of each trader, exchanges can help to prevent fraud and protect against scams.
There are a few different methods that exchanges use for identity verification. Understanding how these methods work is crucial to choosing the best option for your trading needs.
One common method of identity verification is known as two-factor authentication. This method requires traders to provide two pieces of identifying information in order to log in to their accounts.
This could include a combination of a password and a code that is sent to a mobile device, or it could require the use of a physical token along with a password. Two-factor authentication adds an extra layer of security by making it more difficult for unauthorized users to gain access to accounts.
Another popular method of identity verification is known as Know Your Customer (KYC). This process involves verifying customers’ identities before they can open an account or make trades.
Exchange platforms typically collect KYC information such as government-issued ID, proof of address, and tax identification number. In some cases, exchanges may also require additional documentation, such as bank statements or utility bills. The KYC process helps ensure that only legitimate users can access accounts and make trades.
Choosing the right method of identity verification is an important decision for any trader. By understanding the different options available, you can choose the best option for your needs and help to keep your account safe from fraudsters and scammers.
What Are Identity Verification Companies?
Identity verification companies create platforms to make it easy to verify people’s identities. These platforms allow you to share, store and transfer digital identity data. Also, they use high-quality digital security features.
Verification processes are vital as the internet becomes more prone to scams. In the year 2020 alone, there were over 2.2 million fraud reports.
The security features employed by these companies prevent data breaches, theft, loss, or modification. Identity verification platforms also help prevent identity fraud. They work hand-in-hand with anti-fraud and privacy regulations.
The benefits of these platforms for a company are not restricted to one department alone. Several departments in an organization can make use of verification systems. For example, human resources departments could take advantage of these platforms.
These platforms are equally effective for verifying employees’ identities. The legal system can also use these platforms to get clients’ private information.
Functions of Identity Verification Companies
Top-notch identity verification companies create platforms to deal with identity challenges. These range from fraud prevention to identity verification to Know Your Transaction (KYT) and Know Your Customer (KYC) compliances.
Also, every fraud compliance procedure and anti-fraud activity remains under surveillance. This feature involves the help of an AI system. The system screens the market, giving you the knowledge of your customers in 30 seconds or less. It also includes the choice of the level of automation. The user can also control the speed of screening. Another important function is that the fraud risks can be made available to business owners.
There are several identity verification companies out there. The platforms they create are also diverse. They:
- Provide a secure, powerful platform to help businesses. This enables data collection, storage, and analysis. It verifies every customer. This process is effective through the use of a front-end conversion-optimized user interface.
- Provide audit-proof commercial register information. This could include company filings. This process covers a large range of companies and jurisdictions.
- Use techniques to minimize the fraud risk which can help marketplaces, banks, startups, fintech, and human resource firms.
- Allow the protection of the customer’s account. This is possible with the use of powerful biometrics analysis. This activates when individuals type, with low-code integration and a fluid API.
- Help institutions generate new revenue streams, meet regulations and reduce costs.
- Help companies make better financial decisions. This is achievable with the aid of a single API service. A dashboard is also used to manage the verification of the process.
Qualities of a Good Identity Verification System
Identity verification platforms use several methods to keep things secure. The major method they use is the acquisition of biometric information. This includes checking established identity libraries such as public records. It also involves selfies and photo-based verification of identity documents.
A quality identity verification system should carry out the following:
- Background video verification
- Device and browser analytics
- Offer simple yet effective verification flows
- Track other vital information
- Cross-checking background processes. This is for the improvement of efficiency without affecting the conversion rates.
- Verify documents like identity cards
- Check the information provided to point out risks
Advantages of Identity Verification Systems
There are several advantages of trading identity verification. Some important advantages have been listed below:
- Improved Customer Experience
Presenting physical documents for verification can be tiring for a customer. This requires the customer or user to present their data during each transaction step. It makes the user experience more taxing. It also heightens the possibilities of human error.
A good example is providing data during loan applications. You’ll need to present many copies of documents like paychecks and bills. Streamlining the information simplifies the procedure for both service providers and users. Identity verification makes it possible to narrow down the data provision steps.
Companies can also carry out their verification behind the scenes. They don’t need to contact the user for their data. As a result, the verification process becomes easy, safe, and secure.
- Advanced Security
Unscrupulous parties can steal or copy physical credentials for malicious intentions. Individuals may also lose their physical documents.
An identity verification platform allows users to upload and transfer data online. It also allows the sharing of identity data. This is possible with the use of advanced online security features. These features prevent data theft, loss, modification, and breach.
Identity verification software makes it hard for hackers to access data. It also reduces their chances of obtaining many data pieces at once.
- Improved Privacy and Control
Credentials like drivers’ licenses and passports display information about a user at once. They show fixed information sets that all entities can view. You cannot tailor these credentials to share more or less info.
Identity verification software is superior. This is because it allows you to control personal information sharing. You can provide only the least information needed for any transaction. This will protect your data from prying eyes.
In this way, this solution allows you to control your private information. Otherwise, privacy breaches could cause reputational damage, emotional distress, embarrassment, and humiliation.
- Increased Flexibility
Physical credentials present only a small perspective of people’s identity. They cannot feature any extra abilities or characteristics of a user. For example, a driver’s license gives only specific information. But if you wish to take a loan, you will need to provide more data than what is in that license.
Identity verification software provides a sizable and fluid solution. This provides users access to rich identity information. Businesses can streamline this data to get a broader view of each user.
The Bottom Line
In today’s digital world, it’s more important than ever to verify the identity of online traders. Identity verification helps to protect buyers and sellers from fraud, and it also helps to build trust between parties.
There are several ways to verify someone’s identity, but the most common methods include using a government-issued ID or verifying a phone number or email address. By taking the time to verify someone’s identity, traders can help to ensure that they are dealing with a legitimate party. This, in turn, can help to reduce the risk of fraud and build trust between buyers and sellers.