Why Does Document Verification Solution Prove to be a Powerful Tool in Streamlined Onboarding?

Digitization during the last decades and COVID-19 pandemic has increased the number of online transactions extremely fast. Customers demand easy, simple, secure, and quick ways for onboarding. They avoid physical visits and submission of documents. Businesses also prefer online transactions for better reach and faster growth. This rise in remote or online transactions  is increasing day by day. According to the Statista Research Department, user penetration in the Neobrokers market will be 7.21% in 2024 and is expected to hit 7.43% by 2028. The main challenge to businesses in this regard is the identity verification of the customers to mitigate fraud, document forgery, and other criminal activities. This blog will explore how a document verification solution can help businesses streamline customer onboarding process while protecting against fraudulent actions.

Document Verification: A Quick Reference

Document verification is a process of validating the authenticity of documents, whether the documents provided by the user are real, genuine, and free of alteration. It helps organizations verify the identities of their customers quickly and securely by authenticating their identity documents during customer onboarding process. Organizations dealing with high-value transactions, such as banks, insurance companies, crypto firms, and other financial institutions need to be sure about the identity of their customers. It is also important for the regulatory compliance of Know Your Customer (KYC), anti-money laundering(AML), and countering terrorism financing(CTF) laws.

Document Verification Process

Although document verification processes can occur both ways i.e, physically and online, a document checker uses online methods of verification. Organizations need a document verification solution to identify their customers and verify the authentication of their documents faster during the onboarding process. It is an automated process with different checks that verify documents remotely. Preliminary information about the user’s name, address, and ID card number is collected at the time of account opening. Users are requested to submit necessary documents depending on the nature of work and requirements of the organization.Then these documents are verified during a real-time video call. The process follows the following steps to verify documents during customer onboarding.

1. Data Collection

User is asked to upload the image of the document along with his selfie during the live call. There are a number of documents that can be required for the verification process. The following are some of them:

• Identity Documents: These documents may include identity cards, birth certificates, driver’s licenses, and passports.
• Educational Documents: These documents may include certificates, degrees, transcripts awarded by authorized institutions.
• Employment Documents: These documents may include pay-slips and employment contracts that provide information about employment history of the user.
• Address Documents: These documents may include credit or debit card statements, rental agreements, and utility bills.
• Financial Documents: These documents may include income tax returns, property tax papers, and bank statements.
• Legal Documents: These documents may include divorce papers, lease papers, and other contracts.

Once the documents are submitted, they are processed if they provide necessary information required for the verification.

2. Data Extraction

An efficient document verification solution uses Optical character recognition (OCR) technology to extract the required data automatically from the uploaded documents. This extracted data is then compared with information provided by the user for account creation. If extracted data matches with the information provided by the user then the system moves forward to the next step.

3. Evaluation

This step involves the verification process for the authentication of the provided documents. Here, different checks are performed on the documents to confirm their authenticity. The selection of these checks depends upon the type of documents verified. A smart document verification solution uses advanced technologies, such as artificial intelligence (AI) and machine learning (ML) and facial recognition to validate the authenticity of the documents. These technologies verify documents for the following features:

• If the document is complete and contains all the required pages and information?
• Is there any significant sign of cropping or tampering?
• Does the document have standard formatting and font specifications?
• If the document contains special features, such as stamps, foils, texture, watermarks, holograms etc?
• If the photo on the document matches with the uploaded selfie of the user?

If required the document can be verified from the issuing database also.

4. Verification

This step involves a final yes or no verification message to the user. The results are also stored in the database for record keeping purposes.

Final Verdict

In today’s digital world, a powerful document verification solution is necessary for all businesses, especially for banks and financial institutions that involve high-value transactions. It helps businesses make customer onboarding easier, faster and more secure. It protects businesses from fraud, forgery, and other illegal activities. Organizations can also ensure compliance to AML, KYC, and CTF regulations by implementing an AI powered document verification solution.