March 22, 2024
Conventional identity verification techniques in the fintech industry are no longer reliable in today's digital world, as security is their top priority. This relies on secure individual recognition to prevent fraud and protect financial information. Traditional methods are weak, raise privacy concerns, and are more vulnerable to scammers trying to intervene in confidential documents. Artificial Intelligence(AI) potentially revolutionises identity verification systems as they verify more quickly, making it complex for imposters to steal the data. Various identity verification methods, including two-factor authentication and passwords, secure users from fintech industry scammers. This smooths the way for an efficient and more secure future in the digital world.
Advanced identity verification systems combine different technologies to investigate if the person is the same person they claim to be. If the system detects any scammer, it automatically warns the employer or someone in charge to investigate that suspicious person. Let’s break down the standard services of identity verification:
The conventional document verification process is time-consuming and requires more employees to complete staff. Banks and other financial firms don’t have enough time, so advanced versions have omitted all these possibilities by introducing optical character recognition (OCR) and document authority check features.
Quickly extract text from pictures such as user name, ID number, and address, and easily read different languages and fonts.
Document processing systems effectively analyse ID documents for any suspicious activities and detect differences in patterns, showing fake IDs.
Biometric verification systems in banks are very famous due to their accuracy and efficiency. This technology commands users to do certain actions, including blinking their eyes and tilting their heads. Let’s break down its components to understand more:
Fintech refers to financial technology that automates financial services, such as:
The fintech industry revolutionises how people use financial services by providing products and services that make management faster, easier, and more accessible for businesses and consumers. These firms use advanced technologies, including cloud computing and artificial intelligence, to simplify procedures such as sending and receiving money faster, applying for a loan, and managing investments.
Compared to traditional methods, the advantages of biometric identity verification exceed their cons. The following are the benefits provided:
AI-based identity verification provides exceptional services that address the following crucial needs:
Traditional methods in the fintech industry are error-prone and slow as they usually rely on a manual document check process. AI automates these procedures by introducing OCR and biometric services, including face recognition, that help minimise processing time for new user onboarding.
AI also verifies customers through video calls and selfies from trusted sources, eliminating excessive paperwork and physical visits to provide exceptional onboarding procedures. These algorithms are trained on vast datasets to accurately identify fake documents and reduce errors compared to manual document checks.
Identity verification systems detect user behaviours, fingerprints, and financial transaction patterns to investigate suspicious activities and save companies from fraud. It can quickly evaluate the risk each transaction carries by implementing verification measures. Simpler identity verification methods are used for low-risk transactions and vice versa.
AI identity verification leverages data sources, including social media and utility bills, to authenticate identities for users still using traditional methods and vulnerable to scammers, expanding financial services.
AI identity verification makes the user onboarding procedure smooth and easily accessible to people who are still using manual techniques. This automatically reduces the need for physical documents.
AI-based identity verification can easily be translated and used in different languages that helps fintech firms to provide their services in the market.
Verification procedures provide an exceptional way for fintech companies and easily streamline procedures, and improve user safety.
For fintech firms, AI based identity verification is an exceptional technology to improve security and streamline firm procedures. Let’s explore some real-world examples:
Previously, KYC and AML document system was a slow and error prone process. Now many fintech companies are using user IDs and passports to complete investigations through document and biometric verification, automating the procedure, improving accuracy and minimising manual efforts.
In the fintech industry, businesses have to secure their financial transactions. Many firms took steps and used AI to analyse financial transactional patterns by recognising anomalies, preventing scamming activities such as money laundering.
Fintech firms use AI identity verification algorithms including social media activity to investigate different data points. This process helps in accessing credit and loan approvals.
Above mentioned are just examples, as AI is evolving it’s expected that more technology will take over manual verification procedures in future.
Every firm wants to secure itself from the dirty tactics of imposters, specifically the fintech industry. Scammers are waiting to get advantage of this industry as more financial transactions are done over there. It's an easy way for them to get rich over time. However, AI identity verification is transforming the fintech industry by making it secure for businesses in the digital world. It easily streamlines user onboarding procedures and detects fraud to prevent them. AI identity verification ensures accessibility and helps fintech to improve their overall productivity.
