What is Identity Proofing and Why Does it Matter?

As the world becomes more modern each day, there is a constant increase in the use of online payment methods for most business transactions. As a result of hundreds of data breaches by unauthorized individuals like hackers, keeping your social network and financial accounts safe is crucial. Data breaches in financial institutions like banks have proven devastating as they lead to money and identity theft cases.

Without a secure verification process during account access, users and clients can lose critical resources and finances to unauthorized individuals. Therefore, to ensure the safety of all user accounts and eliminate identity fraud, it is essential to employ identity proofing and verification services.

What Is Identity Proofing?

Identity proofing is a process of verifying the identity of a user based on the identity document they provided during account creation or registration. In most cases, without a reliable identity verification process, a hacker can provide basic information. He can claim to be the legitimate account owner, and gain access to personal information and resources.

Luckily, the identity-proofing process has become more complex and secure with the constant evolution of the digital world. Accurate identity verification and proofing processes are under development to ensure the safety of user accounts across all financial and social platforms. The most notable examples of identity-proofing systems include facial recognition and biometric verification.

Verification generally consists of comparing the claimed and actual identities to ensure that the account is accessed only by authorized users. If you have an effective digital identity verification procedure, you can be sure that your account is safe from breaches.

Type of Identity Proofing

You can choose from several types of identity proofing available on the market depending on whether you need personal identity verification done remotely or in person. Below are some of the main ones.

Two-Factor Authentication

This method requires users to provide two or more authenticating factors to access their accounts, also known as multi-factor authentication. These factors are confidential information that can only be accessed by the user, including a social security number, username, and password. This identity-proofing method aims to show that having a series of authentication processes reduces data breach risks.

Knowledge-Based Authentication

This method uses personal information to determine a user’s digital identity. These can include data such as security codes, passwords, and phone numbers. It involves a set of security questions that are personal to the user. The answers to these questions are known to the user and close family members. However, this identity verification process has become ineffective over the years due to many data breaches.

Biometric Verification

The identity-proofing method is relatively convenient compared to other methods. That is because the user does not need to memorize any passwords or codes to log into their accounts. This method includes fingerprinting, facial recognition, voice recognition, and iris scanning.

This method of identity verification offers a smooth user experience for individuals using it to verify their identity when logging into their accounts. In other words, you can portray it as a user-friendly option since entering passwords is unnecessary.

Why Does Identity Proofing Matter

As fraud cases increase globally, institutions lose clients and financial assets. It shows how critical it is to have an effective identity-proofing process. Below are some significances.

• Clients usually review the reputation of an organization before transacting with them. Building trust between clients and the institution is therefore critical when keeping clients for years to come. The easiest way to build trust is to ensure that confidential information is kept secure from risks like breaches.
• To avoid fraud cases and money laundering cases, businesses or financial institutions found guilty of money laundering are closed down almost immediately or fined huge amounts. This factor shows how critical identity proofing is to ensure safe and secure user accounts. Therefore, every institution should improve its security level by adopting identity verification software.
• Improves client or customer experience; in financial institutions like banks, the verification process is fully automated; therefore, the customer doesn’t go through any exhausting paperwork during transactions. As most processes are made easier, customers don’t have to wait long during working hours to access financial services.