Identity proofing

Identity proofing refers to the processes a business undertakes to establish that a customer is who they say they are. It involves the collection of information and evidence from an individual, which is then used to consider whether or not the person is who they claim to be. While any business can engage in identity proofing, it is common in regulated industries subject to Know Your Customer (KYC) requirements, such as the financial industry, online marketplaces, and, increasingly, social media.

Frequently asked questions

What are the components of an identity proofing process?

Identity proofing is typically broken into three key parts:

  • Resolution: The process of uniquely distinguishing an individual within a given population by using the smallest amount of information necessary. Its primary purpose is to verify that the identity is unique and that the information collected from the user belongs to an actual person and is not fabricated.
  • Validation: The process of determining the authenticity, validity, and accuracy of user-supplied evidence collected during the identity verification (IDV) process. Its primary purpose is to verify that the user-provided evidence is real and current and that the information contained in the evidence matches the information contained within authoritative sources. 
  • Verification: This is the process of tying together the identity and user-provided evidence from the person requesting access to the product or services. Its primary purpose is to establish a link between the evidence and the presumed identity.

How much confidence or assurance you need in a customer’s identity should inform your identity proofing processes.

Why does identity proofing matter?

As noted above, businesses operating within certain industries are required by law to engage in varying degrees of identity proofing. Failure to comply with these regulations can result in fines, lawsuits, and other legal actions. But even businesses not subject to these laws can realize benefits by implementing identity proofing, for the simple reason that it makes it more difficult for a bad actor to access your business or platform to engage in fraud.

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