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.



5 Top Identity Verification Methods

With an increasing number of data breaches striking companies and governments on a regular basis, identity verification is quickly becoming vital. Additionally, the development of Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations has intensified the growth and development of identity verification methods, especially in the e-commerce and financial sectors.

In today’s post, we will review some of the best identity verification methods you may consider.

Two-factor authentication

This is one of the most common identity verification methods. In two-factor authentication, users have to input not only their username and password, but also another form of personal identification, before they gain access to an account. Two-factor authentication is well suited for opening accounts and resetting passwords since the use of a token deters fraudulent activity.

Biometric verification

Biometric verification uses physical properties such as fingerprints, voice, facial features, iris, and retina to verify the identity of an individual. This is a highly convenient method since it does not require users to memorize passwords or answers to questions.

Optical character recognition

Optical character recognition combines the best practices of collecting specific types of documents to verify identity. The technology scans documents, such as passports or drivers’ licenses, to verify that they are legitimate.  What is more, the data processed in the verification process is encrypted so it can’t be stolen.


In addition to forming the basis for cryptocurrency, blockchain technology has a significant role to play in identity verification.  Individuals can control who can access their personal information through use of a blockchain-based digital ID.

A blockchain-based digital ID allows verification of a user’s identity, and can empower the user to decide which personal data to share. This increases the efficiency of the process while at the same time reducing the risk of fraud.

Artificial intelligence

Artificial intelligence and deep learning add another layer to the identity verification options.  It can compile data at speeds unattainable by humans. It therefore speeds up the identity verification method.  Additionally, this technology addresses biometric challenges related to makeup, aging, and facial hair.

Final word

In this post, we have discussed some of the top identity verification methods you can use to combat fraud. If your business is looking for an effective identity verification method, go for one based on modern technology such as these top methods.

Identity Theft: What to Do If It Happens To You


Identity theft happens when someone illegally gathers your personal information with the intention of using it to commit fraud. The identity thief can use your information to file taxes, get medical services, make purchases, or obtain credit.  Under the Fair Credit Reporting Act (FCRA), identity theft victims have the right to:

  • Place fraud alerts with the three major credit bureaus or credit reporting agencies (CRA)
  • Place a security freeze on your credit reports from the three main credit reporting agencies
  • Get copies of your credit reports from the three main credit bureaus
  • Obtain information from debt collectors
  • Stop businesses from reporting inaccurate information to credit reporting bureaus
  • Obtain documents about fraudulent accounts opened or purchases made using your information

Should you become a victim of identity theft, you should take the following urgent steps to stop the criminal from continuing to use your information:

Contact the credit reporting agencies

If you find out that someone stole your identity, you should contact credit reporting agencies as soon as possible. You might also want to request a fraud alert for at least a year. This will prevent any fraudsters from using your information to obtain credit. Once you have placed a fraud alert, businesses will have to verify the identity of anyone using your information to obtain credit.

Contact the affected banks and companies

This is another step you must take as soon as you realize that someone compromised your identity. Contact the fraud departments of the financial institutions and businesses where your identity was used fraudulently.  This step might require you to freeze the affected accounts.

Ask for copies of your credit accounts

It’s important that you get free copies of your credit report from the three major credit reporting bureaus. Since each bureau’s report might be different, getting copies from all of them will ensure that you don’t miss anything.

Report the identity theft to the FTC

Although reporting identity theft to the Federal Trade Commission (FTC) is not a requirement, the report it issues may help you prove the identity theft to businesses and financial institutions. Law enforcement agencies such as the police or the FBI  may use the information the FTC gathers to help arrest and prosecute the perpetrators of identity theft.

Contact local law enforcement

Once you get a report from the FTC, you should contact your local police department.  Bring proof of your current address, a government-issued photo ID, and any proof you might have that your identity was stolen. Remember to ask for a copy of the police report in case you need it.

Clean up your accounts

You will also need to contact other companies where you have accounts, such as  utility and phone companies, and cancel any fraudulent accounts. You can also choose to open new accounts with new account numbers. Remember to create strong passwords for all your accounts.

Final word

The steps we have discussed in this post will put you on the right path to reporting identity fraud. However, as you can see, the effort required to get your identity back can be a huge mountain to climb, depending on how severe the damage is. It’s important to protect yourself going forward, and take action as soon as you realize someone has stolen your identity.


Identity Theft vs. Identity Fraud


Although identity theft and identity fraud may seem similar.  Though the terms may even be used interchangeably, they are not the same.  Understanding the difference between these two crimes can help you protect yourself and prepare adequately to handle them when they happen.

What is identity theft?

Identity theft is the stealing of personal data (private or financial information) with the intent of using it to assume another’s person’s identity.  Critical information that identity fraudsters target includes full name, date of birth, address, bank accounts, passwords, social security number, and credit card numbers.

Because of technological advancements, today’s criminals can commit identity theft on a broader scale than ever before. For example, They can hack into government and business servers and steal the personal information of millions of people instantly. Other common methods that criminals use to steal your data include:

  • Malware- Fraudsters commonly use “freebies” to lure you into downloading free software loaded with malware to open up your computer and your network to the criminals.
  • Phishing – In a phishing attempt, a criminal emails the intended victim using a malicious email. If the recipient of the email acts on it, the criminal gains access to a large amount of the victim’s data.
  • Low tech tactics- An identity thief does not necessarily require sophisticated skills to steal personal details. Simple methods such as dumpster diving, mail theft, or collecting a lost wallet or mobile phone can help fraudsters lay their hands on valuable information.

What is identity fraud?

Identity fraud is the use of stolen private, personal, or financial information. Identity fraud affects the individual whose identity is used as well as the business where the fake identity is used to make transactions.

Fraudsters don’t always have to use the identity of a living person.  They sometimes use the identity of a deceased person to commit fraud. Criminals can also use different pieces of information from different people to create a new identity.

Some of the most common types of identity fraud include:

  • Credit card fraud – A criminal uses a stolen credit card or credit card number to purchase something
  • Phone or utility fraud involves using someone else’s info to open a cell phone or utility account
  • Loan or lease fraud- Using someone else’s information to get a lease or a loan
  • Employment or tax-related fraud- Utilizing someone else’s info and social security number to file an income tax return or gain employment
  • Bank fraud- Fraudsters use someone else’s details to open an account or take over an existing financial account
  • Government benefits fraud- Obtaining government benefits by using someone else’s information
  • Criminal identity fraud- An arrestee uses someone else’s name and identifying information when presenting himself or herself to the authorities.

Final word

As you can see, there is a difference between these two crimes. While identity theft is the stealing of someone else’s private information, identity fraud is the fraudulent use of this information. Remember to keep your private information safe.  This will help minimize the chances of becoming a future victim of identity theft or fraud.




Hackers Targeting the COVID-19 Response


Last month, the United Kingdom and the United States issued a warning about ongoing cyberattacks against companies and institutions involved in the COVID-19 response.  Hackers have targeted health care institutions, academics, pharmaceutical companies, local governments, and medical research organizations.

Hackers trying to steal information related to COVID-19

Authorities report that the hackers target organizations frequently to collect intellectual property and intelligence, as well as personal information. Currently, developing a vaccine for the coronavirus pandemic is a top priority for every country.

Health care providers must remain alert

The U.K./U.S. warning reported large-scale ‘password spraying’ campaigns against medical research organizations and healthcare bodies in the past. Password spraying is when a hacker tries to access a large number of accounts by using common passwords. Therefore, according to the U.S. Department of Justice, a major area of concern is the possibility of cyber attacks against U.S. hospitals and labs.

Health care providers, hospitals, research laboratories and pharmaceutical companies, which are at the frontline of fighting COVID-19 pandemic, must stay alert to prevent any kind of breach by hackers. It remains extremely important for them to secure their networks properly, keep strong passwords, use authentic networks and update their cybersecurity tools.



Teaching Cybersecurity


One of the weakest points in cybersecurity is the human end-user.  One careless click by a user can render moot all the antivirus software, firewalls and other technical protections.

Therefore, education is essential.  The more awareness about cyber risks, the better.  A more prepared population can better defend itself.

One recent initiative marches forward on this path. The government of the UK recently launched a new virtual cyber security school.  The goal is to fight hackers and prevent cyberattacks by increasing awareness.  The new school will aim to encourage students to learn new skills while they are stuck at home during the COVID-19 pandemic.

Teaching cybersecurity to people of all ages

Cybersecurity education is important not just for adults, but for the young as well.  The UK’s initiative recognizes this and offers skills for young and old.

The idea is to offer youth interesting and useful skills and assignments like fixing security flaws and learning to crack codes. These include lessons on how to dissect the digital trails of hackers while progressing through a game as a cyber agent.

Teaching cybersecurity leads to greater actual cybersecurity

Industry experts will teach fundamental security disciplines like cryptography, digital forensics, and operating systems. With schools currently closed, the idea is to make use of internet to spread awareness about cybersecurity and allow teenagers to learn few essential things while staying at home.

Initiatives for teaching cybersecurity to the public are important.  Educational programs can ingrain an understanding and awareness about cyber threats that are crucial in order to help prevent them.  Such initiatives can usher in a culture of cyber awareness which will make the end user a much harder and more imposing target for hackers and other malicious actors.