Privacy laws and identity verification: What companies need to know
In our increasingly digitalized world, companies are faced with a daunting challenge: They are required to protect the privacy of their customers while implementing effective identity verification methods at the same time. With technology constantly advancing and a growing demand for online services, companies are required to take into account applicable data protection laws and implement appropriate measures for identity verification.
Protecting personal data has become extremely important in recent years. Increasing data protection requirements and consumer sensitivity make it inevitable for companies to consider data protection an integral part of their business model. In order to better protect personal data, there are laws and regulations both on national and European levels.
Security during verification: data requirements
Data security is a huge factor in identity verification. Quite a bit of confidential information is required for the process:
- Personal information: Basic information includes the user’s full name, date of birth, and home address. This data is used to identify an individual and ensure that the identity provided matches previous data entries.
- Identification documents: Identification documents such as passports, identity cards or driver's licenses are often used to confirm a person's identity. Data provided by the customer is compared to data on these documents.
- Biometric data: Biometric features such as fingerprints or face scans are used more frequently in identity verification. Biometric data captures and verifies a person's unique features. Since biometric data is difficult to forge, it is considered very reliable.
- Contact information: In addition to identity verification, contact information, such as email addresses or phone numbers, is often used to establish secure communication with customers. Businesses can easily email a verification link or text a code to the user, for example.
- Social security information or tax ID: In some cases, social security information or tax IDs may be requested to verify an individual's identity. This information is particularly sensitive and should be handled with the utmost care to prevent identity theft or fraud.
Data protection laws
Protecting personal data is a big part of all data security regulations.
In the European Union (EU), for example, the handling of personal data is regulated by the General Data Protection Regulation (GDPR) to protect the privacy of all citizens. It outlines some basic principles companies must adhere to when handling customers’ personal information. It also defines the rights of affected persons, obligations of responsible entities and measures to ensure an adequate level of data protection. The GDPR allows for severe fines for violations to ensure that companies take the necessary precautions to ensure confidentiality when processing their customers’ data.
Additional laws or similar stipulations are in place for individual countries and different regions around the world. These are often rather strict, involve severe fines, and should be considered carefully when implementing identity verification or other services that involve customer data.
9 Tips for data protection and identity verification
Companies have to act responsibly to ensure privacy protection while guaranteeing the security and reliability of their services. Here are 9 tips on how to do this successfully:1. Consumer notice and consent
Users must be fully informed about different types and uses of data collected, as well as about data processing. Authorization from users is required before personal data is processed - especially in case of sensitive information.
2. User rights
Users' rights regarding their personal data must be respected. Users should be able to access their data, correct inaccurate information, and request the deletion or restriction of processing.
3. Data collection: data minimization and data economy
Data collection is primarily about storing as little data as possible. Data minimization and data economy should be the key criteria here. Collect only data that is absolutely necessary for identity verification, no superfluous or sensitive information.
4. Data storage and security
Make sure that the personal data is stored safely and securely. To this end, implement appropriate technical measures to prevent the loss or misuse of the data.
5. Data access and control
Restrict access to personal data and grant it only to authorized persons. To this end, implement appropriate access controls and monitoring mechanisms to prevent unauthorized access.
6. Storage regulations
Retention periods must be observed. Don't store data longer than necessary, and delete it as per legal requirements.
7. Privacy by design
It is best to implement technology and measures for data protection in business processes and systems from the outset.
8. Verification of data deletion
When data is deleted, it must be removed from all systems and backups. Verify the functionality of data deletion on a regular basis.
9. Compliance with data protection laws
It is important to comply with all applicable data protection laws.
You can’t separate data protection and identity verification. Businesses need to ensure that their customers are accurately verified and that their data is protected. At a time when breaches of data security and identity theft are increasingly common, businesses must take the necessary steps to protect the privacy of their customers. Familiarize yourself with respective laws and regulations, and make sure that you meet all requirements.
It is the company’s responsibility to protect their customers’ data and privacy. By implementing appropriate measures to protect data and complying with applicable laws, companies can make a positive contribution to privacy protection.
Data protection and data security are two related concepts, but they have different meanings: While data protection focuses on legal aspects such as the lawful processing, storage and transfer of data in compliance with applicable data protection laws, data security is about technical measures such as encryption and backup procedures to secure data.
Personal data is information relating to an identifiable real-life person. This includes data such as the person’s full name, address, date of birth, e-mail address, phone number, IP address and any other information that allows conclusions to be drawn about a specific person.
Biometric data refers to the unique physiological or behavioral characteristics of a person. This includes fingerprints, facial scans, iris or retina scans, hand geometry, voice recognition, and other biological or behavioral characteristics that can be used to identify a person.