Verification documents are the ID specimens that are issued by a competent authority to validate the identity claims of an individual or a business entity. So, it is a standard procedure across multiple industries to comply with KYC and AML practices. It makes sure that the applicant does not belong to politically exposed persons (PEP) or is involved in illicit activities.
Processes and operations were moving to digital media at an evolutionary pace. The COVID-19 pandemic started an unprecedented revolution in all aspects of a business. Including manufacturing, marketing, legal, even how a company verifies documents.
We are going to cover some of the trends that are dominant in the post-pandemic world for handling verification documents.
Mobile-First Document Verification Services
These days, mobile has become a desktop pc, a shopping mall, a food joint, a bank, you name it. It was only natural that the compliance mechanism would become sophisticated enough to do the heavy lifting on a small device.
With the waves of pandemics still crashing to the shores of civilization, governmental and private organizations. These are actively catching up to issue document verification certificates on the go. States have built up applications for the contactless to ensure the authenticity of the verification documents process.
A number of countries have already issued e-IDs to provide readily available documents for identity proof across several industries.
Higher Frequency Of Data Breaches
Data security is now more sophisticated than ever, with multiple roadblocks and authentication checkpoints. Somehow, cybercriminals often find a way to steal valuable information and use it as spoils of war.
So, Yahoo still tops the list of companies that were subject to the worst data breaches in modern history, with over 3 billion user accounts exposed by hackers in 2016.
In the aftermath of the COVID-19 pandemic, there is nothing novel about document checking and verification through digital means. At the same time, it has raised alarms for both professionals and people. For those who believe that verification documents theft is still one of the biggest security threats.
Fierce Regulatory Checks
Verification documents were already subjected to KYC and AML compliance. With the great shift from paper-based documents to e-IDs for compliance, regulatory bodies are now more active. Then ever to ensure FIs are not being used to threaten the integrity of the international financial system.
The EU’s 6AMLD (6 AML Directive) came into effect in December 2020, with six months’ time to be implemented by regulated entities. It was a part of Europe’s collective drive to stop the advances of money laundering and terror financing.
The rationale of shoring up regulatory defenses is to plug the tiniest gaps in the current due diligence regime including documents verification for AML and CFT compliance.
Application of Artificial Intelligence For Verification Of Documents
Another rising trend to check the validity of verification documents is to employ Artificial Intelligence and Machine Learning tools to flush out counterfeit condiments and false IDs.
AI has successfully taken over several industries, from leisure and travel to online gaming and FIs. There is a consensus among industry leaders that Artificial Intelligence will be leading the way for document verification practices.
It is smart and intuitive enough to pick up subtle abnormalities in forged documents in real-time. Companies that have already adopted the AI-based document verification process report that they are getting the best bang for their buck. So, the trend is here to stay and grow tremendously.
Document Attestation Frauds
The unprecedented rise of digital financial transactions through e-wallets has risen astronomically in 2020. Although it has opened new avenues for service provision, there is a hanging sword of data security and document attestation frauds. According to a survey by Statista, 43% of the respondents predicted a rise in identity theft and documentation fraud episodes.
Although the application of AI and ML have helped the compliance departments mitigate the risk of letting false positives into the system. It has met with another dilemma as hackers also use such tools to bypass digital security measures that are in place for identity document verification. The intensity of such attacks is on the rise.
Verifications Documents – What To Expect
The nature of verification documents and the systems to assess their integrity are improving radically in a short span of time. These documents are now laden with security features, such as QR codes, watermarks. That makes it a challenge for hackers to counterfeit such documents.
So, Industries are pooling their resources to ensure the safety of clients’ data. Although, the current trends indicate a regime in the making to ensure a more robust and safe environment for the verification of identity documents.