If you're looking to implement identity verification solutions for your business, you’ve got a lot of options to choose from, ranging from the relatively simple to the extremely complex; from the tried-and-true to the cutting-edge.
While it may not be the most exciting option, document verification — really, the OG verification solution — still has an important role to play when paired with other verification techniques.
Below, we take a closer look at document verification and outline how it works. We also review the industries most likely to benefit by incorporating it into their identity verification processes and answer other commonly asked questions about document verification.
What is document verification?
Document verification is simply the process of verifying whether a document — such as a bank statement, employment record, business document, etc. — is authentic or not. Many businesses leverage document verification as a part of their broader identity verification processes alongside other verification methods.
While document verification can occur in both physical and digital spaces, the term is most often used to refer to online or digital document verification. In either case, document verification typically looks something like this:
- The user supplies information about themselves as part of the account creation process. This information can vary from business to business but may include the individual’s name, address, date of birth, SSN, etc.
- Where necessary, the user is then asked to provide one (or multiple) documents that can verify the information provided. For example, a piece of mail may be requested to verify the individual’s address, and a birth certificate may be requested to verify the individual’s age and date of birth.
- The provided document is verified to ensure that it is authentic and not forged.
- If the document is successfully verified, it can act as evidence that the information provided by the individual is truthful.
How does online document verification work?
How exactly online document verification works depends on a number of factors, including the industry you operate within and the types of documents that you are dealing with. That being said, the online document verification process can be broken down into four discrete steps:
- Document collection
- Data extraction
- Document validation
- Manual verification
1. Document collection
The first step in verifying a document is, naturally, to collect it. While this can be achieved in a number of ways, it typically involves asking the user to capture and upload one or multiple photos of the document.
Once the individual submits the document, it’s pre-processed and analyzed to ensure that it meets whatever requirements the business has set. Is it actually a picture of the required document and not of a cat? Is the photo clear and of high enough quality? Does the photo capture the document in its entirety, or is it a partial photo? Are there any obvious signs that the document (or photo) has been tampered with? Does the document contain the necessary information for verification?
Documents that don’t meet these requirements, for whatever reason, will be rejected. Those that meet the requirements will move on to the next step.
2. Data extraction
When a user uploads a document for verification, they do so by providing a photo of said document. In order to access the information stored within the document, the data must be extracted. This extraction can be accomplished in a number of ways, including the use of optical character recognition (OCR), pattern recognition, and other methods.
Once all relevant data has been extracted, it is then compared against any data that has been provided by the user. For example, if the user has uploaded a utility bill as proof of address, the address contained within the document will be compared against the address initially provided by the user.
Discrepancies between user-supplied data and the data contained within the document should raise a red flag. While these discrepancies may be indicative of an input error, they may also be a sign of fraud.
3. Document validation
The next step in the process is to actually validate that the provided document is authentic. This involves a variety of different validation checks — potentially hundreds of different checks — depending on the type of document being verified.
Common validation checks include:
- Document completion: If the document consists of multiple pages, are all required pages uploaded?
- Edge detection and cropping: Does the edge of the document appear to be cropped or tampered with in any way?
- Special feature identification: Many official documents, such as government-issued IDs, are designed with special features that are meant to be difficult to forge. This can include watermarks, holograms, stamps, foils, fonts, textures, and more.
- Colorspace analysis: A photo’s color, lighting, and shadow all provide additional context that can signal whether a document is legitimate, forged, or tampered with.
Depending on the document being validated, this step in the process may also include an issuing database verification.
4. Manual verification
In cases where a document is flagged as being suspect, businesses have two options. They can err on the side of caution and simply reject the document, or they can move the document into a manual review process wherein a human being reviews the case. While less efficient and secure, manual review can be an effective means of reducing the incidence of false negatives. This manual review may include the collection of additional, alternate documents.
Industries that use online document verification
Document verification is heavily used by financial institutions, which are required to verify the identity of all new customers as a part of anti-money laundering (AML) and Know Your Customer (KYC) regulations. Businesses considered financial institutions include:
- Credit unions
- Thrift institutions
- Brokerage firms
- Investment firms
- Fintech companies
- Cryptocurrency exchanges
Because they often deal with large sums of money and may be leveraged for money laundering, travel agencies, casinos, and vehicle dealerships are also considered to be financial institutions under the Bank Secrecy Act.
Of course, other many other industries also incorporate online document verification into their processes, including those operating in:
- Digital health & telemedicine
- iGaming & online gambling
- Online marketplaces
- Delivery apps
- Vehicle retail
- Social media
- Online dating
Really, any business that operates online can leverage document verification and realize the benefits that it offers.
Benefits of online document verification
Online document verification can bring a number of powerful benefits to your business. By leveraging online document verification, you can:
- Meet regulatory requirements: Depending on the industry your business operates within, you may be required by law to verify the identity of new users. Document verification is a widely accepted and highly effective means of meeting regulatory requirements.
- Mitigate fraud on your platform: Even if you are not legally required to verify user identity, doing so can help you mitigate incidences of identity theft and other forms of fraud (such as account creation fraud) on your platform.
- Build customer trust: When identity verification (in its various forms) is incorporated into your onboarding process, it can go a long way in building customer trust in your business or platform. Because all users have undergone the same verification, the implication is that it is much harder for bad actors to slip through and potentially cause harm.
- Onboard new customers faster: When paired with automation, online document verification can be completed very quickly — in just seconds in many cases. This is much quicker than is typically possible with manual review, which can take anywhere from minutes to days, depending on the specific processes used.
A deceptively simple verification option
However basic it might appear to be at first glance, document verification is still an effective means of verifying the identity of your users and customers. With this in mind, it likely deserves a place in your verifications toolkit.
Here at Persona, we know that there is no one-size-fits-all approach to identity verification that will work for all businesses. That’s why we’ve developed our Verifications solution to be hyper-customizable.
Leverage document verifications alongside other methods like government ID verifications, database verifications, selfie verifications, biometric verifications, automated reports, and more. Build the verification process that makes sense for your business and your customer — not everyone else’s.