Businesses that collect user data must ensure this data is accurate and that the person submitting the data is the person the data belongs to. This process is very important because it is one of the best ways to ensure that you have the right customers buying from and interacting with your business. Below, we will look at what electronic identity verification is and the benefits of implementing it.
Electronic Identity Verification
Electronic identity verification is a process used to make user data is accurate. Electronic identity verification compares data submitted by an individual against publicly available data and databases. Some companies also use private databases as well as data they source from other areas for this process.
Electronic identity verification uses data collected from an individual such as social security numbers, names, physical addresses, date of birth, and other identification data. Once this data is collected and compared against other available data, the result could be a partial match, a perfect match or a non-match.
If you are interested in implementing electronic identity verification for your business, you can learn more about it here. You will learn how Cognito, a provider of identity verification services, can help you implement it and what benefits it will afford your business. Cognito helps you verify the identity of individuals and businesses so you know exactly who you are dealing with.
Which Businesses Need to Implement Electronic Identity Verification?
The first subset of businesses that need to implement electronic identity verification are businesses that need to ensure the person submitting the data is the owner of that data. Such businesses include financial advisor firms, banks, accountants, and brokerage firms. They need this system to comply with laws that need them to know who their customers are, prevent money laundering and identity theft as well as help combat the financing of terrorism.
The second subset includes businesses that need to verify an individual’s identity as part of their due diligence. These include lawyers, casinos, retailers, insurance companies, real estate agents, and businesses that are actively recruiting.
Benefits of Using Electronic Identity Verification
Electronic identity verification can be used to prevent fraud. One such case is where the social security number provided by someone comes back as one that belongs to someone else.
Electronic identity verification can also help you avoid doing business with people who are on government watchlists, politically exposed or convicted of financial crimes.
Finally, electronic data verification can help you verify new customers and help you keep information related to older customers up to date.
What Else Do You Need to Know?
Electronic identity verification is implemented depending on which laws you need to comply with and where your business is based. Different types of businesses might require different or custom electronic identity verification services.
The cost of implementing such a verification system will depend on how many databases you want the information your customers provide checked against.
Implementing electronic identity verification can shield your business from doing business with unsavory third parties. It can also help you comply with local laws and affords your business other benefits as discussed above.