Everything you need to know about Document Verification
Download the buyer's guide to document verification software.
The demand for online services and products is increasing at an unprecedented rate. With this shift to adopting online platforms, it becomes vital for businesses to confirm the identity of their customers via an online portal.
Online Document Verification is imperative for businesses to ensure safety, eliminate misuse of services and render better customer experiences.
For example, ride-sharing apps need online document verification to ensure both the rider and driver are identified as real individuals. Online document verification is important to fight online identity theft and make online experiences safer.
Let’s dive into the guide to document verification and learn more about it with illustrative examples.
What is document verification?
In a traditional setting, the original ID card or passport was the way to verify the true identity of an individual. But in an online setting, online document verification is crucial to building trust amongst the target audience.
Document verification is the process of verifying the authenticity of a document.
Document verification is used to check the originality of submitted documents, extract information using OCR software like Nanonets, and confirm genuine microprint text and facial recognition for matching identities.
- ID card
- Driver’s License
- Bank Statement
- Utility Bill
- Tax bill
- Insurance Agreement
- Employment documents
- Educational Documents
- Employee Letters & many more
The document verification process checks document features, such as stamps, watermarks, holograms, fonts, or other security features, and automatically approves the document. This automation saves time and effort for the organization and frees up employees’ time to provide better services.
Opt for a smarter document verification process with custom document workflows in 15 minutes. See how it works with a free product demo from our automation experts.
Why do we need Document verification?
Online identity theft is a huge problem for all online businesses.
For instance, in the US alone, 47% of US citizens experienced financial identity theft.
The losses from identity theft cases cost $502.5 billion in 2019 and increased by 42% to $712.4 billion in 2020. Losses are forecast to increase again in 2021 to $721.3 billion.
Document verification is an integral tool in the verification of a customer’s identity. Online document verification is needed whether it is for complying with KYC regulations, or it is for account opening.
During the customer onboarding process, document verification software can help organizations verify new customers quickly and securely by checking the authenticity of ID documents.
Online document verification software like Nanonets, makes it easier for organizations to reduce their customer onboarding time to minutes. With help of AI-enhanced OCR software, teams can selectively extract data from ID documents and combine it with their existing CRM software to build rich customer profiles.
What are the different types of Document Verification?
Different businesses require different types of document verification. For example, banks would need passports whereas a ride-sharing app might just need a driver's license too. Banks might need multiple documents whereas an app might need just one document. Based on requirements, there are different types of document verification as shown below:
Education Certificate Verification
In this class, the credentials and information about the educational qualification claimed by an individual are verified. Education credential verification includes:
- Degree passing certificate copy verification
- Degree mark sheet copy verification
- Year of graduation
- Registration number/Roll number
Professional License/Certificate Verification
The date on which the professional license/certificate was awarded is verified and the status of the license is checked.
The candidate’s place of residence is checked. The following points are taken into consideration:
- Residence address
- Duration of stay
- Residential status
- Type of Accommodation
The database information is used to check the applicant’s relevant information. The following points about the applicant are checked:
- Criminal Record Database check
- Civil Litigation Database check
- Credit & Reputational Database check
- Regulatory Authorities Database check
- Serious & Organized Crimes Database check
- Compliance Authorities Database check
- Web & Media searches
Driving License Verification
Individuals need to provide a driver’s license to identify an individual. A driving license is issued by the government which means the credentials of the individuals are thoroughly checked.
Birth Certificate Verification
The date of birth of the applicant is verified from central records.
The details of the passport are verified by Government passport issuing authorities.
Ration Card Verification
The State Government agencies validate the ration card details.
Voter ID Verification
The Central Government Voter card issuing agencies record is used to check the applicant’s information.
PAN Card Verification
The Central Government PAN card issuing agency record is used to check the applicant’s details.
It is used to verify the current or previous employment detail of the candidate. It may include the following:
- Position held
- Period of employment
- Details of salary
- Reasons for leaving
- Behavioral details
Manual Document Verification
Anyone in a professional occupation can verify your documents. They could be a:
- Police Officer
- Commission of oaths
- Company Manager or Director
- A chartered accountant
You can show originals to the person who is verifying your copies. The person verifying your documents will sign it with their name & include their job title and the date of verification.
The procedure for online document verification is as follows:
- Select your institute and upload a certificate.
- Make payment and request verification
- Receive your e-verified certificate
The document verification process usually takes two weeks. The pending document verification implies that your documents still need to be verified.
How to automate the document verification process?
Check that the security features are in the right place
Every ID document comes with its own unique set of security features, such as watermarks, logos, holograms, and microprint. Checking that these security features are where they are supposed to be is a solid first step in verifying the document is real. All that is needed is a clear image of the document to be able to verify its security features.
The end result should be a clear, horizontally aligned image of the document.
Compare the ID data for consistency
Every ID has the document holder’s personal data encoded in some way - whether in a barcode or a Machine Readable Zone (MRZ). Any mismatch between this data and the data printed on the rest of the document ( its so-called Visual Inspection Zone, or VIZ) is an indication of tampering.
Match the user’s face with the portrait on the document
One more way of verifying a document is to compare the ID photo and uploaded selfie of the customer. In the event the characteristics on these two images match, the user is the genuine owner of the submitted document.
Document process automation is the design of systems and workflows that assist in the creation of electronic documents. These include logic-based systems that use segments of pre-existing text and/or data to assemble a new document. This process is increasingly used within certain industries to assemble legal documents, contracts, and letters. Automation systems allow companies to minimize data entry, reduce the time spent proof-reading, and reduce the risks associated with human error.
Reduce fraud, improve customer turnaround time and ensure compliance with smart document verification workflows.
What is the Document Verification Process?
The document verification process is simple, data is collected at the source from the customers, and then it undergoes data extraction where selective data is extracted from the required documents. The documents are validated and checked for authenticity by various AI checks which reduces identity thefts. And after going through human in the loop process, the document is finally verified. Let's take a look at all the steps in detail below:
Step 1 : Document Collection & Data Capture
In the first step, the required documents are submitted. The customers are asked to upload the photos or videos of the relevant ID documents in high quality. The AI and algorithms scan the document for information, including the encrypted data, and recognize it.
In the first step, the documents are pre-processed and are made ready for the next step. This includes checking the borders of the documents, de-skewing the images, and improving the color and brightness of the image to ensure better data extraction at the next step.
Step 2: Data Extraction
In the second step, the required information is selectively extracted from the documents. With intelligent document processing software like Nanonets, users can select the information that is important and discard all the other irrelevant information.
As opposed to a simple OCR software, it is better to use Nanonets as it converts your entire document into a structured informational document that can be directly fed into your next data sources as required. At this step, you can also classify the document based on their templates and ensure proper documentation of all the customer documents without fail.
Step 3: Document Validation
Validation of the data extracted from the scans requires establishing if the document and the info shown are still valid. Based on the extracted data, you can match the extracted information against any data source to check its validity. For example, the loan processing department might want to check if the person applying for a loan has any present loans in the same bank. Document validation is imperative to reduce identity thefts and frauds.
Some of the validation checks that automated identity document verification solution conducts:
- Face and orientation detection
- Edge detection and cropping
- Front to back correlation
- Cross checks on thousands of global IDs
- Colourspace analysis
- Headshot integrity
- Selfie to ID photo match
Step 4: Document Verification
As a final step, the documents which are flagged due to any error are sent through an approval process. This symphony of manual and automated workflow is often called the human-in-loop verification process. After checking for everything, the documents are then verified.
Onboard customers, employees, or patients in minutes with automated document verification workflows. Just upload the documents and let Nanonets do the rest.
What is the role of the Document Verification Executive?
The Document verification executive steps in the fourth step of the document verification process. These are the tasks that they carry out on a daily basis:
- Collecting documents from the selected candidates
- Maintenance of employee files and other documents
- Responsible for employee verification
- Understanding the requirement on manpower from the business and sourcing candidates
- Conduct background verification for all new hiring (need to be done before joining)
- Responsible to maintain recruitment and employee master data
What are the benefits of using online document verification?
Businesses reaping a fair share of success due to their growth and appeal of ideas need to tackle the complex web of fraudsters who’re ever-present at their cyber portals. Employing AI in ID verification increases the security of commercial portals ten-fold, along with providing businesses with an edge over those who’re on the lookout to commit fraud. When used in conjunction with human intelligence, AI increases the human ability to process data, thereby enabling businesses to process information intelligently and prevent being scammed. Some of the benefits that machine learning brings to document verification are:
Faster return on investment
Automation document processing tools can be set up and trained in days or weeks rather than months or years. With a lower total cost of ownership, enterprises can apply automated document processing to a wide range of documents to realize ROI faster compared to traditional tools. Softwares like Nanonets can provide up to 3-5x ROI in less than 3 months. Learn more
Improved operational flexibility
AI with deep learning enables rapid document modeling and training so that new, never-processed documents can be quickly added to the document processing system. And, with reduced lead times, enterprises can respond quickly to new opportunities by creating new document processing applications without increasing staffing.
Faster operational responsiveness and compliance transparency
AI-led automation can support “human-in-the-loop” validation that delivers document classification and extraction results to the person submitting the document. This enables fast and responsive information verification and correction in near-real-time. Front-line workers can quickly make corrections or request additional information while collaborating with customers, partners, or other external stakeholders. This saves time and ensures better data accuracy and transparency for everyone involved in a business process.
Enhanced Fraud Detection
AI-enabled document processing software can detect fake documents by using photoshop, EXIF or forgery detection. It keeps a check for any anomaly in the documents which can indicate tampering of any sort.
Document verification software automates the entire document verification process which makes it standardized and scalable across geographies without any differences.
With an automated onboarding process, it is possible to reduce the customer onboarding process from days to minutes. Nanonets can help enhance the customer onboarding process with fewer waiting times and almost 99% accuracy.
Document verification software like Nanonets uses AI-enhanced OCR technology to extract information from customer documents. It can identify images, over 200+ languages, and handwriting with over 99% accuracy. Also, with no human intervention except for flagged cases, the accuracy of the entire process increases to over 99%.
Remote ID verification is done from anywhere in the world, anytime, for a seamless customer experience
Instant Online Document Verification
This is the perfect solution for banks and non-bank financial institutions to reduce cost, effort, and mistakes, while simultaneously enhancing the overall customer experience. User verification within 30-60 seconds to optimize conversion rates and reduce drop-offs. This technology provides instantaneous and real-time verification of documents including bank account verification, bank statement verification, proof of address documents, tax return verification, identity verification, and more.
Enhanced KYC, KYB, and AML compliance
You can enhance your KYC, KYB, and AML compliance and at the same time improve the user experience by cutting down the onboarding time.
Fully-automated digital process for increased productivity and reduced manual labor. This technology provides instantaneous and real-time verification anytime, anywhere, and globally.
What are the challenges of using online document verification?
Here are some of the disadvantages of using online document verification.
Document verification software is a powerful tool to verify fraudulent documents but it is not exactly foolproof. Human in-the-loop verification is a must for all regulatory institutions to prevent mistakes.
Inefficient & Expensive Identity Verification Solution
There are many ID verification solutions available in the market. Each has its own advantages and disadvantages. Also, each has its own protections against fraud, but some are more easily forged or tempered with than others. Companies are constantly updating techniques in order to meet growing data privacy needs across countries and industries. It is crucial to look at their security certifications.
Evolving Biometry Forgery
The rise of technology has given birth to the problem of online identity verification. For every advance in identity verification, there is an advance in identity fraud techniques. Detection techniques for each type of biometric forgery are required, as well as proactive monitoring of the involving fraud techniques.
Hurdles in Determining the real identity
Document verification software checks for the authenticity of the document and forged documents. But if the fake ID passes all the verification filters, it would be difficult to identify the person without manual verification processes.
Which industries use online document verification?
Organizations are overwhelmed by documents. So, the potential impact of document processing is immense in paper-heavy processes. Automation software can extract and organize data across industries and business functions, right out of the box.
Apart from the document overload, many organizations are heavily regulated and required to follow strict rules for KYC and AML compliance in financial services, banks, and insurance institutions. Using document verification software can alleviate the pressure of reducing customer turnaround time and enhance customer satisfaction.
Apart from these, all organizations
- Financial services - including loan and claims processing and bank account openings.
- Healthcare - including medical forms, billing, and patient records.
- Aviation - contactless check-in, boarding of passengers
- Telecommunication - billing, application forms
- Travel - invoices, identity verification
- Gaming- identity verification
- IT firm - employee records and service records.
- Logistics - delivery slips, invoices, purchase orders
- Retail - customer identity verification, invoices
- Government - public records, invoices, approval systems
- Banking - application, customer onboarding
- Software Apps - ID verification
Authenticate identity documents on autopilot. Save Time, Effort & Money while enhancing efficiency!
What are the document verification use cases?
Document verification is used by different industries for varied use cases. To give you a basic idea of use cases, we will discuss some of the prominent document verification use cases below.
Account Opening or Customer Onboarding
During account openings, businesses have to verify the identity of the customer. Many institutions like banks, educational institutions, healthcare, and more have to go through an extensive verification process to ensure the authenticity of the submitted documents. Intelligent document verification software like Nanonets helps organizations reduce their customer onboarding time to minutes by automating the document verification process. Read more about id verification.
Age verification is crucial for some industries like gaming or healthcare. Age verification can be done by extracting the date of birth from government-issued ids like driving licenses, birth certificates, pan cards, KYC documents, or more. Read more about passport OCR and driving license verification.
Every business has invoices. Employees sometimes manually fill in the details to keep a track of company expenses which takes up a lot of your employee time while also leaving room for error. Automating invoice processing using Nanonets will ensure that all your invoices are processed with an error-free standardized process. You can automatically collect invoices from sources like email, drive or dropbox, collect selected data from the invoices and then send them to the database of your choice like CRM, Tableau, or Excel. Read more about invoice processing and automating data entry.
This technology provides an effective fraud prevention solution. It protects your business from different parameters of document fraud such as forged documents, compromised documents, counterfeit documents, pseudo documents, photoshop detection, fake documents or stolen documents from entering your onboarding workflow.
KYC and AML compliance is a must for banks, insurance, and other financial services institutions. Due to the rising cases of identity theft, KYC compliance is a must, and using an online document verification software like Nanonets ensures a smooth hassle-free process for your employees and customers.
Businesses work with multiple vendors over the course of their financial year. Retail businesses work with multiple suppliers and vendors. During the vendor onboarding process, it becomes imperative to verify the identity of the vendors to ensure you are working with the right kind of people.
Apart from the ones mentioned above, there are other use cases where document verification can be used extensively:
- Case Reviews
- Contract Administration
- Mortgage Loan Application Processing
- Insurance Claims Processing
- Digital Document Archiving
- Address Verification
- Driver Registration
- Payment Registration
Nanonets - The best Document Verification Software
Nanonets is an AI-enhanced intelligent document processing platform that helps organizations of all sizes digitize, classify and selectively extract important information from their documents. Organizations use Nanonets as an end-to-end document management system.
Nanonets are used extensively by enterprise clients to verify documents on a secure online platform to conduct Passport Verification, ID Verification, Driver License Verification, Invoice Verification, Vendor Verification, Accounts Payable Automation, and more.
Also, Nanonets is known for being an easy-to-use, no-code workflow-based platform that delivers ROI at a much higher pace.
- automatically source documents from emails attachements or drive
- identify the document type based on document content
- route the document to the correct OCR model without supervision
- extract data from document
- match the document data with your internal data set
- flag the documents in case of any anomalies
- export the extracted data to your required database (5000+ integrations)
Here's a snapshot of performance expected from Nanonets.
Nanonets is highly rated on peer-to-peer customer review websites as shown below.
Are you interested in saving time and effort with intelligent automation? Use Nanonets to start your automation journey. We're here to help you along the way.
12 September 2022: This blog was originally published in June 2022 and was updated in September 2022 with updated content.