Digital identification

What is digital identification and where is it used?

Digital identification describes the secure verification and confirmation of a person's identity in the digital space. It replaces physical presence while still ensuring high security and protecting against identity theft. Examples of applications include:

1. Opening bank accounts and financial services:

Banks are required to verify their customers' identities according to the Anti Money Laundering AML Standards and Know Your Customer (KYC) regulations. Digital identification methods allow for this to be done remotely, simplifying account openings and loan approvals.

2. Digital contract signing:

Whether it's a rental agreement or insurance policy, contracts can be signed remotely thanks to digital identification and electronic signatures.

3. eGovernment Services:

Authorities enable document applications or the use of eID functions through digital identification without requiring personal appearance.

Other application areas include unlocking online services through age verification, accessing corporate applications, and authentication at crypto exchanges.

Overview of identification methods

1. Face-to-Face identification

What is it?

In classic face-to-face identification, a person presents themselves in a branch or office and shows their ID. Employees verify the identity by directly comparing the person and the document.

Advantages:

• Highest security: Direct contact and visual inspection of the ID ensure maximum security.

• Personal assessment: Human interaction allows for an intuitive assessment of the situation.

Disadvantages:

• Time-consuming: Requires personal presence and often involves waiting times.

• Limited availability: This method is only available during business hours and often requires an appointment.

• Knowledge-intensive: Employees need regular training.

2. Online identification methods

2.1 Video identification

What is it?

In video identification, a person is identified via a video call by trained staff. The user shows their ID to the camera, and the staff compares the image with the person and checks the security features of the document. Additionally, the person is asked to perform specific movements to ensure it’s a live transmission.

Advantages:

• High security: Direct human control ensures high security, comparable to face-to-face identification.

• Convenience: Identification can be done from home without needing to appear in person.

• No special hardware required: A smartphone or computer with a camera is sufficient.

Disadvantages:

• Time-bound: The process is only available during business hours as it must be conducted by staff.

• High dropout rate: Reluctance to share sensitive data during a video call often leads users to abort the process.

• High personnel costs: Video identification processes are personnel-intensive, leading to high costs and limited scalability.

2.2 Fully automated identification

What is it?

Automatic identification, also called Auto-Ident uses AI-supported methods to automatically verify a person's identity. The user photographs their ID and themselves. The software compares this data in real-time and checks the documents for authenticity. Various technologies are used, such as optical character recognition (OCR) to extract ID data, biometric facial recognition to match the user's face with the ID photo, and liveness checks to ensure the person is real and not an image or video. Documents are also checked for authenticity and tampering. In the case of biometric passports, the NFC chip is read to ensure the highest security.

Advantages:

• Available 24/7: The process is fully automated and can be conducted regardless of business hours.

• Fast and efficient: Identification typically takes only a few minutes.

• Convenient: Users only need a smartphone and a valid ID.

• Flexible: Auto-identification is suitable for many use cases and supports various document types and legal requirements.

Disadvantages:

• Technical challenges: The success rate often depends on camera quality and AI algorithms. Poor lighting or unclear images can complicate recognition.

• Complexity for some users: Correctly positioning the ID and performing liveness checks can be challenging for less tech-savvy individuals.

• Limited document support: Not all identification documents used worldwide are compatible, especially those from poorer countries.

2.3 Electronic Identification (eID), Bank, and Document Upload

What is it?

These methods utilize the eID function of electronic ID documents or verification through online banking credentials.

Advantages:

• Strong authentication: Identity is reliably confirmed through cryptographically secured digital signatures or secure banking data.

• Automated and fast: Identity verification is largely automated, making the process efficient and time-saving. Disadvantages:

• Dependence on third-party providers: Specific hardware is required for eID, and not everyone has access to online banking.

• Complex setup: The setup of these procedures can be cumbersome for users.

Why fidentity relies on automatic identification

fidentity combines the advantages of automated identification with comprehensive compliance expertise for maximum security and user-friendliness. Our technology allows identity verification in just 2 minutes – all you need is a smartphone, a valid ID, and a smile.

Liveness checks and deepfake protection:

To ensure that the user is a real person and not a manipulated image, extensive liveness checks are conducted. This ensures complex deepfakes and replay attacks are detected. Our algorithms analyze subtle features such as skin textures, light reflections, and movement patterns.

Security through technology and experts:

Our AI checks the documents and the user's face using state-of-the-art algorithms. The NFC chip in the biometric passport is read to ensure authenticity and compliance with money laundering laws (AML). Additionally, a (PEP-Check) can be conducted to identify politically exposed persons and minimize risks.

Comprehensive document support:

fidentity supports a variety of ID documents from different countries. Our algorithms are specifically trained to reliably recognize and process both machine-readable zones (MRZ) and visual inspection zones (VIZ) of documents. This allows us to accurately verify the authenticity of numerous national and international ID types and identify complex security features. This list of supported documents is continuously expanded to ensure broader global coverage and seamlessly integrate new document types and standards.

Certified compliance:

fidentity's identification solution IDENT was specifically developed for the regulated environment. Each customer solution is based on a separate database to ensure strict data separation. With certification under eIDAS and ZertES, compliance with Trust Service and AML standards is demonstrable. The KYC process meets the requirements of FINMA and has been audited by KPMG. IDENT fulfills the requirements of FINMA Circulars 2016/7 and 2018/3. All data and processes are hosted in a Swiss data center, and development occurs entirely in our offices in Bern.

Optimal usability with maximum security:

Despite these high security standards, our system remains user-friendly. Thanks to clear guidance, the identification process is simple and understandable. Even technically less experienced individuals can complete it without issues. Over 85% of users succeed on their first attempt.

Why fidentity doesn’t rely on video identification:

Video identification may have once been an advanced method, but it no longer meets today's requirements. At fidentity, we rely on future-proof technology that is available 24/7 and provides results in minutes.

Conclusion: Flexible, Secure and user friendly

Secure identification is a crucial factor in the digital world, especially in financial transactions. fidentity leverages the latest technologies such as liveness checks, NFC reading, and comprehensive document checks to offer the highest security. With our user-friendly solutions, people worldwide can be reliably identified around the clock – quickly, securely, and flexibly.

Key to Security: ABCs of Digital Identification

• AML Standards (Anti-Money Laundering):
  AML regulations are rules and procedures aimed at combating money laundering and terrorist financing. They require companies to report suspicious transactions, identify customers, and mitigate risks through PEP checks and due diligence.

• PEP Check (Politically Exposed Person Check):
  A PEP check verifies whether a person is considered a politically exposed person to identify money laundering and corruption risks. This involves collecting personal data, matching it with special databases, and conducting a subsequent risk assessment, along with documentation and monitoring of the business relationship. The PEP check is an essential part of the compliance processes of financial institutions and companies.

• Trust Service Standards:
  Regulations that ensure the security and reliability of electronic services such as electronic signatures, timestamps, and certificates. They ensure these services are trustworthy and meet legal requirements.

• Replay Attacks:
  A fraudulent attempt where previously recorded video or image material is replayed to simulate identification.

• Deepfakes:
  Manipulated videos or images created using artificial intelligence to convincingly mimic a person's appearance and voice.

• Liveness Checks:
  A method to verify whether the person in front of the camera is a real, living human and not an image or video. Typical tests include movements like blinking or head turning.

• VIZ (Visual Inspection Zone):
  The visually readable area of an ID document, such as the personal data and photo page of a passport. This contains information such as name, date of birth, and nationality that can be read directly by humans.

• MRZ (Machine Readable Zone):
  The machine-readable area of an ID document, such as a passport or ID card. This area contains specially coded information that is standardized and easily captured by machines, such as name, date of birth, and document number.

• NFC Chip:
  A small chip in biometric passports that can be read via near-field communication and contains additional, encrypted information for identity verification.

• OCR (Optical Character Recognition):
  A technology for automatically recognizing and converting text from images, such as from ID documents, into digital text. OCR is the technology needed to read data from the MRZ of a document.