25.11.2021

Author: Joseph Koenig

Online identification

There are many situations in which a person needs to verify their identity. However, the person does not always have time to go to a bank or public authority for identity verification. This is why companies and authorities use online identification for digital transformation. Online identification enables an identity check quickly and conveniently from home, saves time, and is flexible. This guide informs you about the advantages and possibilities of online identification.

What is identity verification?

Classic identity verification describes a procedure in which the identity of a natural person is checked. The goal is to assign the available personal data (identity card or passport) to this person and verify its authenticity.

Significance and Advantages of identity verification

Identity verification plays a significant role for many companies in risk management. It is an integral part of preventing fraud measures.

In addition to risk management, identity verification is essential for necessary audit processes. For example, it can ensure that the delivery address is correct and that invoices can be delivered correctly.

Areas of application of an identity check

Today, identity verification is used in many different areas and industries. In banking, identity checks are a prerequisite for opening an account and an integral part of the KYC ("Know Your Customer") process. Identification is also necessary for the insurance industry identification to sign insurance policies. In addition, identity verification plays a vital role in public administration to renew identity documents, such as passports or identity cards.

Identity verification methods

If you need an identity check, there are two basic procedures:

Face-to-face method

The face-to-face method is the traditional procedure for identity verification. Here, the person to be identified visits a company or public authority and presents their identification document. A trained person responsible for the identification verification compares the ID document with the person in front of them and checks the security features of the ID document for its authenticity. Then, trained persons make a copy of the ID and fill out and stamp a form to confirm their identity. Now the identified person can continue with post-identification steps.

Remote online identification method

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In addition, there is an online identity check. Instead of visiting a company or public authority, the person to be identified performs the identification process flexibly and online. In general, the person shows their face and presents their identity document in a webcam to an AI or video agent. The video agent or AI compares the face with the given ID document and makes a liveness detection to verify the authenticity. Sometimes, possessing a valid e-banking account is proof of identity because a bank has once identified the person.

Online identification methods and their security

Video identification

For online identity verification, an encrypted video connection is established between the person to be identified and a video agent. During the secure video conference, the person holds their ID document into the webcam and follows the video agent's instructions. The video agent checks the authenticity of the ID document and the match of the ID images with the person and verifies the person's identity.

Video identification is a certified remote identification method and complies with security standards according to the anti-money laundering regulation.

Identification with e-banking account

Another innovative method is identification using an existing e-banking account. In this case, the person to be identified enters their personal identity data via a web mask and authorizes it with his e-banking log-in and a small reference transaction. This legitimizes the person as the owner of the valid bank account and compares the identity data deposited with the house bank with the data entered in the web mask and issues the valid identity.

The identification with a valid online banking account is also a certified and secure procedure that complies with the legal requirements of the EU regulation eIDAS and the Anti Money Laundering Act.

Requirements for an online identity check

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For online identification, the user only needs a valid ID document, a device with a camera and microphone, and a stable internet connection. The person should also check the lighting conditions in his environment so that the webcam can capture everything in good quality.

How the online identity check works

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To start the online identification, the user must first register via an application, website, or an app. An encrypted connection is established to perform the video call with an agent. During the video conference, the person must present both sides of the ID document in the webcam and show their face to the video agent. The video agent verifies the authenticity of the ID document and makes a liveness check person. The person is confirmed if the person in the video and on the ID document is identical.

Regulations and standards for identity verification

Due to the large number of fraud cases on the internet, which are possible due to a lack of identification on the internet, the AML-5 regulation was issued. This sets standards for online identity verification. These regulations are comprehensive and thus support the security of the verification processes.