Flexible Online Identity Verification: The Key to Scaling Globally
Flexibility is key for digital businesses. Yet all too often, the development of companies is hampered by inflexible solutions that cannot accompany them on their international growth journey. This also holds true for businesses that seek flexible online identity verification solutions. In order to scale globally, companies need a software solution that is flexible enough to deal with a multitude of different compliance, business and financial requirements as well as engineering constraints.
As consumers increasingly conduct their commercial activities online or on mobile, companies are following suit by investing in state-of-the-art software platforms to manage their customers’ trusted digital identities securely, right from the onboarding stage and beyond.
While doing so, companies have to fulfill the demands that customers, regulators, as well as other factors put on them. They have to create interactions with their customers that are built on trust, while optimizing the user experience and preventing fraud.
How to deal with the challenges of scaling globally
This alone will be enough to give a company’s compliance staff a headache. Yet, it becomes even more challenging when considering the various constraints they have to fulfill when a company scales internationally.
Globally there are thousands of ID types, comprising biometric passports, national IDs and driver’s licenses – issued by 196 countries and territories. Identity verification solutions need to be able to recognize every single document type. However, not all of these documents may be machine-readable. For example, biometric passports are fairly harmonized across the globe, but documents such as drivers licenses are not.
This is why companies need to deploy a scalable and flexible software solution if they want to be able to verify a document bearer’s identity.
At the same time, not all countries have the same regulatory maturity and thus require different features and functions – setting aside the fact that customers in country A might not be familiar with the user journey in country B. An inflexible software solution could therefore become a real obstacle to scaling internationally.
Besides the need to be able to deal with myriad documents, regulations, and customer habits, there are some other overarching constraints that companies in any sector will face when deploying an identity verification software solution. Some of these relate to engineering challenges, others to general compliance requirements.
Platform-agnostic design ensures flexible online identity verification
An online identity verification solution should be flexibly deployable across different platforms – on the web and on mobile. Even greater flexibility comes when the software solution can be used as a stand-alone product or integrated into a company’s own app.
So, how can we ensure a flexible online identity verification solution that works for all businesses? In general, the ideal flexible software solution has to be able to authenticate the ID document, match the user’s face to the ID photograph, and check for the user’s liveness. It needs to be able to accurately extract information from the machine-readable and visual inspection zones through the fully automated real-time capture of the document using the smartphone’s camera.
The software needs to be flexible enough to work equally well on iOS and Android, and also perform under the technical constraints of any mobile phone camera. When authenticating an ID document, the software will automatically do a forgery check and validate the ID’s various security features, such as a hologram and lenticular.
Furthermore, any decent software solution has to offer the company peripheral services and tools to support end-to-end identity verification and the onboarding processes.
These may include:
- Scanning and processing of barcodes or QR codes,
- Background checks against various government databases such as lists of politically exposed persons (PEP) and sanctions lists, and
- Undertaking a facial recognition check against existing user databases – all in a matter of just a few seconds.
Besides these demands, the software has to fulfill the strictest data privacy settings and do so equally well integrated into a software as a service (SaaS), i.e. cloud-based solution, and in its on-premise variety.
A flexible online identity verification solution should relieve your compliance department
There are many compliance procedures that all companies have to adhere to globally. For example, the European Union’s (EU) General Data Protection Regulation (GDPR) applies to all companies that conduct business in the EU. Likewise, all companies are bound by general and sector-specific know-your-customer (KYC) requirements.
Compliance is important, yet it is also expensive. It has created a lot of overhead for companies and tied up many of their employees in unproductive tasks. A flexible software solution that automates most of the required procedures will aid companies tremendously.
Use case-specific online identity verification is key: Three solutions you should consider
Every use case is different: while telecommunications companies need to optimize for conversion, a bank or a national ID card scheme are driven by the most stringent compliance requirements and security standards. The ideal identity verification solution is flexible enough to accommodate them all.
Here are three industry-specific solutions to keep it mind when it comes to strong online identity verification:
1. Direct banking
Banking is a line of business in which compliance requirements are extensive. In the European Union (EU), banks have to comply with anti-money laundering (AML) regulations such as AML5, the revised Payment Services Directive (PSD2), other relevant KYC procedures, as well as privacy regulations such as the GDPR.
With many new regulations having been introduced over the past years in all major jurisdictions, the compliance department has become the biggest of all in most banks – whether they are direct or retail.
Fulfilling strict KYC mandates is a cumbersome process with high costs, a lot of friction, and long processing times. This highlights the importance of online identity verification solutions. So-called “challenger banks” or “neobanks” were early adopters of these technologies and that is one reason why they have leapfrogged established banks in many ways.
Telecommunications providers are legally required to perform an identity verification when they onboard new customers. In the past, this was accompanied by cumbersome manual processes, which in turn led to high drop-out rates and added significant costs. Customer experience suffered as a result of having to come to a store, while online sales growth languished.
Likewise, telecommunications companies were also frequently exposed to fraud by bad actors showing fabricated ID documents at the point of sale, tricking their shop floor staff into authorizing a sale.
A flexible software solution to onboard new customers can solve these problems. Most telecommunications companies already have a customer-facing smartphone app. Why not implement an option to access telecommunications products and services remotely and thus create a compliant, secure, and convenient solution for both customers and retail employees?
3. Sharing economy
All sharing or gig economy platforms have one thing in common that is integral to the success of their business: they must establish trust – both among the platform users and between the individual user and the company. Yet, it is still surprisingly easy to remain anonymous on these platforms.
For a small community platform, this might not be a problem at all and therefore, no huge verification process is required. But think about companies like AirBnB: They scaled from a small website to a billion-dollar company. If your solutions, (e.g. for identity verification), cannot keep up, your company will struggle to reach a certain size.
Platform businesses require a simple and flexible solution that includes enough security features to meet their needs while satisfying the demands regarding customer experience.
Nevertheless, if you are planning to go big, you need to plan ahead when it comes to your software.
How PXL Vision helps you stay flexible
PXL Vision’s technology serves the needs of any industry. Our software can swiftly and easily be deployed as a cloud or on-premise solution for full flexibility and independence, allowing complete customization of your end-to-end identity verification and onboarding process. It is up to you: you can choose a plug-and-play solution and start right away, or configure the technology to your very own needs.