Reports have revealed that in France, 3 to 6% of the 10 million government-issued ID documents issued are issued based on fake identity documents, thus making them illegitimate. A Javelin Strategy and Research study estimated that in 2021, identity fraud cost the U.S. approximately USD 56 billion. Given these statistics, companies have now realized the strategic need of utilizing robust and automated document verification solutions for fraud prevention and detection.
How can Document Authentication Avoid Fraud?
If you think back to the time you had to get your bank account opened, you must have gone through the process of submitting your identity documents. These could have included an ID card, a passport, or some other official document. A verification officer must have verified those documents through a manual document verification process.
In today’s digital-first world, verification officers have been replaced by AI-powered documentation verification solutions. These solutions can even function online, eliminating the need for customers to visit a bank branch in person. How does this fight fraud? Through a document validation process that verifies the customer’s ID document using advanced models and algorithms. Since fraudsters have started utilizing modern tech for committing fraud, it only makes sense to use the same technology to give them a taste of their medicine. Listed below are some fake documents that are ruled out by an automated document verification solution.
– Modified Documents
These documents are altered versions of an original ID document. These documents are modified in such a way that the changes become undetectable by the naked eye. However, document verification solutions can easily spot the documents and alert the company.
– Illegitimate Documents
These documents are completely fake from scratch. They are detected by document verification systems through missing holograms, rainbow prints, and other standard document details.
– False Documents
These documents refer to stolen ID documents that fraudsters use to bypass document checks in banks, airports, and other high-security places.
What Processes Are Involved?
To combat the burgeoning threat of ID fraud, document verification performs the following procedures.
1. Authenticity Checks
Machine learning and artificial intelligence algorithms are utilized for detecting suspicious features of an ID document. Using such capabilities, legitimate documents are easily identified while false documents are ruled out.
2. Format Identification
Document verification systems have the ability to identify document formats based on specific jurisdictions.
3. MRZ Code
AI technology also weeds out fraudulent documents by verifying the authenticity of Machine-Readable Zone codes. These codes are encrypted with classified information. In case of tampering, the document can be flagged as fraudulent.
4. Detecting Crumpled Edges
ID documents are inherently prone to wear and tear over time. This however does not stop a document verification solution from verifying its authenticity. This is because any folded or crumpled edges can be detected.
5. Photoshop Detection
Criminals and scammers often photoshop important features of an identity document to make it appear as it belongs to them and is legitimate. However, the slightest change in a pixel can be detected by a document verification solution, all thanks to AI technology.
6. Hologram Verification
Hologram stickers are commonly found on ID cards and passports to increase their visual authenticity. As fraudsters use sophisticated techniques to manipulate them, modifications can often be left undetected. AI-based document verification software can detect any discrepancies found in these holograms.
The Endless Benefits of Document Verification
Through document verification, companies can effortlessly stay compliant with KYC regulations. Apart from this, these solutions optimize customer experiences as the verification process becomes much more rapid compared to traditional methods. Listed below are a few other benefits of using document verification solution:
- This method of verification is faster and much more convenient than manual document authentication methods
- By identifying fraudulent documents and suspicious customers during the initial stage of onboarding, the risk of fraud is substantially minimized
- Fraudsters are weeded out from legitimate and loyal customers
Key Takeaways
- Document verification solutions are gaining ground in numerous industries
- Its value can be found through fraud prevention and risk mitigation
- Financial institutions use this method of verification for distinguishing between fraudulent players and legitimate customers
- By using AI technology, this method effectively rules out any sign of ID fraud that might be committed through fraudulent documents
