Document Checks – A Method for Businesses to Mitigate Identity Fraud

Document checks are the limitations on identity documents that firms are applying for in the hiring process. When an organization hires a candidate after poor document screening, then it may put its finance and security at risk. The candidate has access to this organization’s finance and security areas. He can damage the reputation of the company and also affect confidential data.

Documents checks – Technological Advancements

Fraud in documents is always a big issue all over the world. Most people use fake documents to move to developed countries, get a dream job, hide from law institutions, etc. There are also some serious offenses included such as human and drug trafficking, terrorist funding, and, bank fraud. According to a survey, fraud losses in the US were USD $9.62 billion in 2019.

Moreover, this survey showed that 33% of employing people experienced identity fraud. In the past, it was very difficult to commit fraud. Businesses need to plan for days and sometimes for years. Where technology helps to catch fraud, it also helps criminals to develop new methods of crime. As a result, many government and non-government organizations have to bear billions of dollars in loss, bad reputation, and leaking of sensitive data every year. There are different laws and methods for preventing document fraud in different countries and organizations that use artificial intelligence and machine learning. These methods are proving very helpful in controlling these frauds.

What is Digital Document Checks?

Digital document checks are defined as the checking and verification of documents remotely by digital means. Typical ID identification methods require the physical presence of a person and his IDs like passport, utility bill, driver’s license, etc. These traditional methods need long paperwork, are time-consuming, less accurate, costly, and slow for both the client and service provider. On the other hand, digital document checks outperformed manual document checks in the following areas: 

  1. Accuracy
  2. Time
  3. Cost
  4. Availability
  5. Document Tamper Detection
  6. Scalability
  7. Customer Experience
  8. Fraud Detection
  9. Consistency

Document Verification Process

The document verification process makes it possible to confirm the authenticity of documents with thorough identification checks. Verification based on artificial intelligence helps financial institutions to prevent fraudulent identities and documents. Its accuracy is so high that it can capture the minor try of forgery in any pixel of an ID document. The online document verification method checks the micro prints, holograms, MRZ code, and fonts. Clients can simply verify themselves by just uploading the ID document image like passports or ID cards from their smartphones or laptops. 

KYC Process

Know Your Customer refers to standards that financial institutions or different organizations employ to authenticate their clients’ identities and determine what fraudulent risks they may face. KYC standards prevent money laundering, human and drug trafficking, smuggling, and financial fraud. The KYC included the following procedures:

ID card verification

In this procedure, the personal data of the client is stored in the system. After that, the ID card image will be uploaded to the system for comparison with the stored data. If the data of the ID card is the same as stored data then the customer is genuine otherwise fake.

Face verification

The system identifies the customers through their features of the face. The system matches the image on the ID card with the physical face. If the features of the face match with the image on the ID card then the system considers it real otherwise fraud. 

Document verification 

Verifying the address and identity of the customer through formal documents like ID cards, utility bills, or passports is known as a document verification service. Global regulators like FATF have made it compulsory for financial institutions to identify or verify documents. So, the chances of fraud become minimized.

Why Do Banks Apply Document Checks?

Banks are the most affected institutions by fraud. Banking frauds are at the top of all the frauds. To prevent fraud and potential risks of fraud, banks apply document checks. Global watchdogs make it necessary for banks to authenticate customers’ identities during the account opening process. Because all illegal transactions required a bank account for further proceeding. Opening an account in a bank requires different document checks. ID card verification, biometric verification, address verification through utility bills, and passport, are the documents checks that banks demand.

How Document Checks Help Corporates to Eliminate Identity Fraud?

Documents are very important for the identity of a person. The fraudulent activist always tries to steal someone’s identity to acquire the wrong purposes. To stop scammers from using someone’s identity, regulatory organizations set multiple document checks. Document checks are meant to verify the client’s identity to ensure what they say they are. Businesses use different processes for verification purposes such as ID card confirmation, face recognition, and document authentication. The purpose of document checks is just to prevent the clients from fraud and risk of fraud.

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