Recent trends in fraud have created the imperative to authenticate the identity of your customers to ensure you know exactly who you are conducting business with. But what is the best way to “know your customer”? With terms thrown around such as verification, validation, authentication, etc., it can be confusing to know what steps need to be taken to ensure you can effectively put a stop to fraud.

Here is a brief summary of two of those terms – ID Data Verification and Identity Document (ID) Authentication.

What is ID Data Verification?

Put simply, identity data verification is an effort to establish data accuracy. It is the process of confirming the integrity and consistency of the data. Verification involves checking data against a set of predefined rules or standards to ensure that it is valid and reliable.

The main objective of data verification is to identify any errors, inconsistencies, or discrepancies in the data. In the case of KYC, this would mean verifying that the Personal Identity Information (PII) given to you by your client is accurate.

How do you verify data on an ID?

ID data can be verified by ensuring the information on the front of the ID (i.e. – the printed information, such as name, birthdate, ID#, and expiration date) matches what is digitally encoded on the document, whether in the barcode, magnetic strip, machine-readable-zone (“MRZ”), digital watermark or RFID chip. Making sure data is correct and consistent is just one way you can help prevent fraud in real estate transactions.

Some verification services might additionally send the “PII” to be compared to public-records data, such as DMV records or private identity databases, to make sure the data matches what is on file with the issuing authority for the document.

What is ID Authentication?

By definition, ID Authentication is the process of authenticating the genuineness of the source of the data (e.g. - the document). It involves verifying the physical identity document itself for authenticity, rather than just the data contained within it. This ensures that the physical document being presented was genuinely issued by a government agency and not a fake created by a forgery operation.

The difficulty from a transactional perspective lies in the fact that so many different types of ID Document exist. In the US, alone, there are more than 1,100 types of official, government-issued credential documents. This one fact renders it virtually impossible to authenticate a document without some form of tool or solution.

How does ID Authentication work?

Modern Identity Documents are among the most securely produced documents in the world. Great care has been taken to make forgery or alteration of ID documents very challenging.

This is achieved by layering security printing techniques and features into the design and production of the document.

Authentication, then, involves testing for the presence of these and many other design features to make sure that the document contains the requisite design, printing and security features it should have.

The term “forensic” is often used in connection with ID Document Authentication. This is because it may require a unique set of physical tools and objects in order to perform the level of testing required. Ultraviolet and/or infrared light, magnification, magnetic detectors, high resolution imagers and more are involved in performing a truly high-confidence physical document authentication.

Why is ID Authentication more secure than Data Verification?

The simple fact is: almost every single American has had their PII hacked at some point over the past decade. Just check out this alarming graphic from information is beautiful. This is exacerbated by the fact that the international organized crime groups involved in professional ID forgery have evolved the use of data processing tools to make efficient use of this hacked data. It is not difficult to produce, or purchase, a forged document that contains genuine PII information that will match the information in the DMV database. That is because the data is being offered in online marketplaces for as little as $0.10 per individual record.

This means that data verification is sufficient only to detect and prevent fraud performed by amateur operations.

Forensic ID document authentication on the other hand, is far more difficult to fool. It requires extraordinary skill to produce the dozens of high-tech security printing techniques used to secure ID documents. In some cases, absent the involvement of a corrupt government agency that has access to the technology, it can be impossible to produce the security features.

Why not do Both?

Of course, there is no reason why we should not consider doing both of these processes, both ID Document Authentication and ID Data Verification. Best-practice would further indicate that – when conducting a “remote” transaction when the customer will not physically come to your place of business, that a facial-match also should be performed to ensure that the person conducting the transaction is, in fact, the person whose face is pictured on the authenticated ID document.