How Electronic Identity Verification Helps Fight Financial Crime


Electronic identity verification is a process that helps businesses ensure that their clients provide them with information about a real person. In other words, it is the remote verification of a person’s identity through digital means. The process happens in two main steps:

  1. Documentary verification
  2. Non-documentary verification

Documentary verification

Verification systems use electronic means to check the photos on a client’s documents to determine whether the documents are authentic.  Examples of such documents are a driver’s license, passport, or another state identification document. They also check the details on the identification documents, such as name and date of birth, to ensure they are valid.

Verification software then compares the photo on the customer’s ID with a real-time photo.

Non-documentary verification

Businesses can check customer data against a number of databases.  These include those of government agencies, watch lists, adverse media, credit bureaus, and utilities. This helps get as much information as possible. It enables screening for negative information about the client, to avoid potential risk. The whole process can take just a few minutes.


How electronic identity verification helps fight financial crime

Electronic identity verification is an integral part of conducting due diligence in organizations such as brokerage firms, banks, insurance companies, and financial advisers.

Firms can detect potential financial fraud by identifying prospective customers suspected or convicted of financial crimes, and those on government watchlists and sanctions. They can also use electronic identity verification to keep their client lists updated.

Companies use electronic identity verification to prevent illegal activities like scams, harassment, and money laundering.

Additionally, these methods help businesses comply with Anti-money laundering laws (AML), Combating the Financing of Terrorism (CFT), and Know Your Customer laws (KYC). All these laws are meant to prevent criminals from committing crimes such as money laundering and financing terrorism.

Electronic identity verification methods also help prevent identity theft and financial identity theft. They do this by ensuring that the potential customers’ documents  are authentic, unaltered government-issued IDs.

Final word

Although there is a cost associated with electronic identity verification, it’s not as expensive as the long term consequences of working with people who are not who they say they are. Electronic identity verification is therefore indispensable for modern businesses. It can be a vital instrument to help you prevent fraud. It does this by identifying prospective customers who have been convicted of financial crime, are subject to government sanctions, are on international watch lists, and those who are politically exposed.



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