Applying ai document verification to reduce fraud in banking

Identity theft is one of the most aggravating problems that financial institutions and payment processors have to deal with. Fortunately, modern advances in machine learning and artificial intelligence (AI) technologies can help solve all these issues. Continue reading the article by SmartOSC to learn all you need to know about document fraud and how new AI document verification systems can identify false papers.

What is document fraud?

Identity document fraud is the unlawful practice of purchasing, dispensing, or producing fake identification documents in order to engage in illegal financial transactions, immigration, business registration, or other criminal acts.

The crooks may use both forged papers and real documents to commit identity fraud.

The most typical identification papers used in fraud are listed below.

– False Document Sources:

• Theft: documents the victim’s physical copies which had been taken and subsequently sold on the dark web after having been stolen from the victim.
• Hacks: documents, either scanned or photographed, that were acquired by hacking databases and then sold on the dark web.
• Purchase: Purchasing of scans or photographs from the victim on false pretenses in return for monetary compensation.

– Counterfeit Documents:

• Pseudo documents: documents that are not produced legally by any government yet have the appearance of being authentic identification cards.
• Counterfeit documents: copies that are not permitted to be made of original papers issued by the government.
• Falsified documentation: Identifiable documents that have been fraudulently altered in some way (e.g. changing the photo to resemble another person).

How AI document verification works

Integration

Integration of the necessary software into your organization’s payment processing systems should serve as the first step toward adopting AI document verification. Pseudo Documents are, as we have established, wholly false documents. They often lack crucial safety components like holograms and watermarks.

Document verification with little friction

When AI document verification is necessary, the new customer will be prompted to submit an image of a government-issued document as well as a selfie that was taken within the app itself.

Document scanning using AI

The software that detects fraud uses algorithms for optical character recognition (OCR), which enables it to see any inconsistencies in the document’s typography that may be an indication that the document has been tampered with.

Concurrently, the AI document verification system examines the document in relation to a database containing known genuine documents and performs a comprehensive check for any and all observable forging signs.

Facial examination of data

After it has been established that the document in question is authentic, the algorithm will consult a highly developed facial recognition system in order to check that the customer’s face is an exact match for the one that is shown on the AI document verification.

Verdict

A few seconds after the data has been submitted for review, the system will either automatically confirm the verification attempt as genuine, block it as fraudulent, or send it to your security team for further review. 

This will happen in one of three ways: it will either block the attempt as fraudulent, automatically confirm the AI document verification attempt as genuine, or both.

The conventional document validation procedure was cumbersome to scale, sluggish, and unreliable. Using AI document verification gives you the opportunity to reduce the work required for document verification and reduce the amount of fraudulent papers in your company’s routine activities.  If you have any queries, please contact SmartOSC as soon as possible. Thank you for reading.