A large number of companies are today joining the landscape of innovation and digitization. The growing industries which were using manual and traditional ways are now utilizing technologies for the transformation of organizational services in dealing with their customers. These technologies are not only introducing proficiency in the organization but are also facilitating the customers with quick and efficient services.

One serious use-case is online identity verification. Financial institutions, banking industry, online marketplace are in the most need of online identity verification services. Instead of manually identifying and verifying each customer, technology has made it easier for the organization to automate the identification process for customers by providing them better user experience and security at the same time. But why it is necessary? How does it actually work?

Programmers are the ones who develop systems for them. Well, it is a changing trend in companies in which either the client itself mentions the online identity verification APIs or the developer himself suggests it to the client. To cope with online fraud and insecure measures, it is the responsibility of developers to integrate the trusted online identity verification service in the system they are building. While full-stack development, the developer needs to ensure that the services he is embedding in the system should fulfill the obligations at industrial and federal levels. Also, make sure that there are fewer to no security threats associated with third-party services or APIs.

The need for Identity Verification

With the increase in the massive technological advancements, industries are innovating themselves with digital and automated systems. This helps in less utilization of human power, more productivity, and efficient data management and processing. Also, there would be no headache for the customers to wait for their turn in queues and manual paperwork to provide information. To introduce proliferation for the collection, management, and processing of customer data, online identity verification has become the primary need of the online marketplace.

Online identity verification mitigates the risks of online fraud and money laundering activities from happening in the system. Therefore, it is important to ensure Know Your Customers (KYC) and Anti-Money Laundering (AML) checks in the system.

Now here comes the role of programmers who are responsible for building the online systems for multiple industries and organizations. These systems are asked to be developed in a way that they fulfill all security, local and international regulators and companies’ needs. Deciding the best online identity verification API at run-time can be risky, therefore, the developer should have a pre-knowledge about the services which are provided inline and whether they comply with industrial needs or not. Some of the major requirements are below:

Online Fraud Prevention

The security of industrial and customer data is the primary goal of an organization. According to a 2018 study, 60 million Americans have been affected by identity theft and the cost of an average worldwide data breach has been reached to $3.86 million. This is not only damage to the organization but also for the victims whose identity has been stolen and used for malicious purposes.

To avoid such online fraud, online identity verification needs to be done efficiently that leaves no loopholes for the cybercriminals and protects the system from all possible online frauds. A developer needs to ensure that the API he is integrating meets the indirect and direct requirements gracefully.

Conforming Companies’ SOPs

While developing a system, the developer must take into consideration all the Standard Operation procedures (SOPs) of the organization for whom they are building software. This needs to be catered efficiently to make sure that the purpose and security of the system are not sacrificed in any way.

A developer must know that how a company manages to keep records, how it processes it, what security aspects must be implemented while developing an online system. Also, what kind of APIs they use, integration of trusted online authentication API, online traffic management, etc. All the key points that lie under the SOPs of a particular company should be handled properly to avoid after risks.

Regulations Compliance

For online identity verification, there are some laws that are made to reduce online fraud, data breach, cyberattacks, and identity theft. The software houses and companies which are developing online software are the main targets of these laws. While considering the importance of human rights, privacy, and security, laws are defined according to which the data been collected by the sectors should be protected, the ways in which data is collected and processed should be monitored properly, the KYC and AML background checks need to be implemented to avoid any malevolent activity from happening in the system.

Below are some of the regulations that are required to be considered while using an online identity verification API in a system.

GDPR: General Data Protection Regulation (GDPR) is an EU law for citizen data privacy and protection. According to this law, any company that fails to comply with the GDPR requirements will be subjected to harsh fines.

PCII: Protected Critical Infrastructure Information (PCII) is a program to protect the private sector infrastructure information which is shared with the government for security purposes. It analyzes the information infrastructure, security measures and identifies the vulnerabilities in a system.

FINMA: It is a Swiss government body responsible for financial regulations. It supervises the banks, intermediaries, stock exchange companies, insurance companies, and financial institutions and evaluates their ways of performing tasks.

FINTRAC: A financial intelligence unit of Canada, which ensures data protection and privacy, analysis security measures and deters the chances of money laundering and terrorist activities.

It is the duty of the developer to implement security in the system based on the aforementioned and similar laws that play an important role in protecting sensitive data. Any company or business that fails to comply with these regulations is fined heavily along with reputational damage. To avoid such risks, the developer must integrate the APIs that are trusted and fulfill the requirements efficiently. For this, it is necessary to read the policies and contract of the third-party service providers.