Document Check

The key difference between physical document verification and digital document verification is the method used. Physical checks examine a document’s tangible attributes, such as the MRZ zone, while digital checks utilize automation to verify the document’s authenticity online.

There are a few types of document checks that businesses choose to implement. For example:

• Automated software. Uses algorithms and machine learning to analyze documents and compare them with existing databases.
• Manual checks. Reviewing documents to ensure they’re valid and match the information provided by the individual.
• Third-party providers. Often offer more advanced ID verification solutions, including facial recognition, liveness detection, biometrics, and other innovations.

Banks often use document checks along with other methods to improve their identity verification processes and onboard new customers. For example, they might use facial recognition technology to confirm a new client’s identity by comparing a live video of them with the photo on their ID card. Alternatively, customers can visit a physical branch to have their documents inspected by staff directly.

Businesses can use third-party services like iDenfy to automate document verification. These AI-powered solutions offer automated identity document checks and other document-related verification processes, such as utility bill verification or bank statement verification, that can quickly and accurately verify documents, integrating seamlessly into existing systems to enhance efficiency and compliance.

Financial institutions and similar service providers use document checks, among other obliged companies, for example:

• Fintech companies
• Investment firms
• Insurance companies
• Credit unions
• Real-estate firms
• Crypto exchanges
• Banks

Using a document check helps them fulfill regulatory obligations, reduce fraud risks, establish trust, and streamline customer onboarding processes.

NFC technology allows for the secure reading of encrypted data directly from electronic chips embedded in identity documents. This method enhances security by providing cryptographic validation and is particularly useful for high-risk scenarios. Some RegTech companies like iDenfy offer NFC-enabled ID document verification, which is often used for onboarding and reading chips faster (where the information is stored). This is considered to be a good and tamper-proof Know Your Customer (KYC) verification method. 

By implementing robust document verification processes that include biometric checks, data cross-referencing through official government database checks, and the use of secure technologies like AI, businesses can effectively meet KYC and Anti-Money Laundering (AML) regulatory requirements. Each particular use case depends on the business, its operating countries, internal risk appetite, and so on. However, the most common approach to verify ID documents is to ask the user to upload a copy of their government-issued ID document, which can be a passport, ID card, or driver’s license.