What is eIDV (Electronic Identity Verification)?

Organizations leverage modern technology to streamline various back-office processes, and eIDV is the latest solution to help make the identity verification process more efficient.

What Is Electronic Identity Verification (eIDV)?

Electronic identity verification (eIDV) refers to the process of using a computerized system to verify an individual’s identity against public records and private databases. An eIDV search will consider the person’s information, such as their name, address, date of birth, and Social Security number, and see if they can find a match, partial match, or non-match for the individual’s identity. 

This process is completed with the help of an automated computer system, which streamlines the identity verification process and reduces the hands-on work required to prove the customer is who they say they are. 

A number of providers for this service are currently on the market, though this will likely become a growing field as the world moves increasingly more digital and the volume of consumer data available online continues to grow.  

How Does eIDV Work?

The exact steps in the eIDV process can vary between service providers. However, the general steps involved are as follows: 

  1. An individual signs up/submits an application to open a new account
  2. The service provider requests proof of identity 
  3. The new customer provides personally identifiable information (PII) like their name and date of birth plus ID documents like a passport, driver’s license, birth certificate, etc.
  4. The eIDV system cross-references the provided data against public and private databases to check for a match, pulling data from credit bureaus, vehicle registration records, police records, utility providers, and others 
  5. The system will return one of three values: match, partial match, or non-match
  6. The service provider will take the appropriate action based on the return value, such as denying the application or service, requesting additional information, or continuing the application process

Benefits of eIDV

Though a newer technology, eIDV has the potential to provide significant benefits for organizations across various industries. Below, we will highlight some of the top advantages that these systems can offer. 

  • Enhanced Security

The primary benefit of using an eIDV system is that it can help mitigate the risk of new account fraud, identity theft, and other crimes by ensuring individuals are who they claim to be. If the system returns a partial or no match after a comprehensive search against available data, it could indicate that the person is not being truthful and has stolen someone’s identity or is engaging in synthetic fraud

  • Greater Convenience

It is more convenient for users and organizations to verify identities with an automated online system rather than through manual checks. The process can be completed much quicker, helping to improve the user experience with faster onboarding. It also saves the organization valuable time and resources since their staff can work on other, more critical tasks. 

  • Cost Effectiveness

Similarly, it can be more cost-effective for organizations to use eIDV solutions over manual identity verification checks. Though there is typically a fee associated with using these services, it’s often cheaper than the equivalent labor costs to support the team verifying identification data and documents by hand. Make sure to consider the ROI of these services before selecting a specific system to ensure it makes sense financially.  

  • Stronger Compliance

Organizations can strengthen compliance with eIDV solutions, avoiding potential fines and penalties. These systems can help organizations meet regulatory requirements related to anti-money laundering (AML) and know-your-customer (KYC) laws, ensuring they’re only working with legitimate customers and not fraudulent enterprises or bad actors. 

  • Scalability

Human workers have an upper capacity limit and can only feasibly process a certain number of applications and identity verifications per day. This can create a significant bottleneck for organizations, especially as they grow and receive an increasing number of applications each week. An eIDV system is a more scalable solution, helping businesses expand their capacity and work more efficiently. 

Potential Drawbacks of eIDV

Despite the impressive benefits, there are some drawbacks to consider before implementing an eIDV solution.

Consumer Privacy Concerns

Using an eIDV system can raise consumer privacy concerns, especially if handled improperly. Organizations should work with reputable providers who prioritize data security to meet compliance requirements and safeguard customer information.

Erroneous Responses

No system can be 100% accurate all of the time, so there’s a risk that eIDV will incorrectly return a no-match response. Sometimes, a legitimate individual will not successfully complete the electronic verification process due to outdated information stored in databases or discrepancies between different data sources. This can be frustrating for the consumer, and correcting the erroneous information online may be challenging. It can also slow down the sign-up process for the organization if they need to verify their identity manually.

Possible Limitations

Certain individuals may not have a comprehensive digital footprint, which can create roadblocks during the eIDV process. It may be difficult for the system to properly verify a person’s identity if they don’t have substantial information available online.

eIDV Use Case: Banking and Financial Services

Banks and financial institutions must adhere to strict KYC requirements and anti-money laundering regulations, and eIDV is an efficient way to help them meet these standards and verify customer identities. Especially as the regulatory landscape for the financial services industry continues to evolve, systems like eIDV will allow these organizations to remain efficient and productive while upholding industry standards.

The application of eIDV will continue to expand, with potential use cases for government agencies and services, law enforcement, healthcare, and more.

For more information on how to implement eIDV at your organization, contact the AuthenticID team.