The Role of ID Scanning in Preventing Fraud and Identity Theft

Aug 18, 2024

With the rise of modern technology, fraud and identity theft methods are advancing. Companies using ID scanning in their daily operations are especially vulnerable. Any potential customer data breaches can damage brand reputation, destroy customer loyalty, and even result in financial loss.

To avoid such an outcome, investing in a secure ID scanning solution is extremely important.

In this article, we’ll explain identity theft.

Moreover, we’ll help you understand how ID scanning fraud prevention and identity theft protection works.

What is Identity Theft?

According to Bureau of Justice Statistics, identity theft consists of one or multiple occurrences:

unauthorized use or attempted use of an existing account

unauthorized use or attempted use of personal information to open a new account

misuse of personal information for a fraudulent purpose.

Essentially, identity theft is when someone uses your data without your consent.

Usually, this data includes name, date of birth, and address. Mentioned data can be found on IDs and passports. Stolen personal data can then be used for opening bank accounts or requesting loans, leaving a victim of identity theft in debt.

Since identity theft is a serious global issue, more efforts are put into developing highly secure ID scanning technology. Identity theft protection services market is on the rise, and it’s predicted to grow to $28 billion by 2029 (IdentityTheft.org).

How is ID Scanning Preventing Fraud and Identity Theft?

To avoid potential customer personal data breaches, ID scanning solutions focus on implementing special ID scanning fraud prevention and identity theft protection technologies. Learn more about how these ID scanning technologies are preventing fraud and identity theft in the following paragraphs.

OCR and MRZ Ensuring Accuracy

As a first layer of protection, ID scanning technology ensures data accuracy. False IDs can be either manufactured or manipulated.

While manufactured ID is a completely fake document, manipulated ID is a real document where some pieces of information are changed. For instance, the date of birth is changed for accessing age-restricted products and services.

ID scanning technology performs optical character recognition (OCR) and machine-readable zones (MRZ) for data extraction. While OCR reads and extracts alphanumeric characters from ID documents, MRZ ensures two lines of alphanumeric characters on the bottom of the identification document are accurate.

Those two lines contain information such as the issuing country or organization code, document number, the holder’s nationality, and other personal data.

ScanDoc ID technology reads the MRZ, OCR, and barcode to ensure the ID document contains all the necessary elements. Moreover, it accurately captures data from over 500 countries. It reads and extracts data from ID documents regardless of the language.

Data Encryption Securing Customer Data

Compared to other crimes in 2022, data breaches including ID information had one of the highest numbers of victims (Internet Crime Complaint Center). Storing photos of ID documents and customer personal information on different devices poses a security threat.

With secure ID scanning, all the sensitive information from IDs and passports is protected. ScanDoc ID scanning solutions utilize advanced data encryption.

In case of any security breaches or unauthorized access, customers’ personal data stays unreadable. Additionally, ScanDoc doesn’t store any data. Only companies implementing ScanDoc technology can own or use clients’ personal data.

Liveness Face Recognition Preventing Fraud

For example, to be eligible for a loan or a new credit card in the US, you need to have a good credit score. A credit score is a three-digit number that predicts your credit behavior. It’s based on the information from your credit reports.

MyFICO reports that every time an identity thief requests for a new credit card or a loan, the victim’s credit score can decline by five points.

Other countries such as the UK, Canada, Australia, Japan, China, and Mexico have credit scoring systems. While these systems differ from country to country, they are usually connected to tracking loan activity, open accounts, unpaid balances, and fines.

Considering the impact of fraud and identity theft, it’s even more crucial financial institutions protect their customers.

Along with OCR, MRZ, and data encryption, another layer for secure ID scanning authentication is face recognition technology. ID scanning face recognition is suitable for opening bank accounts and applying for loans in banks completely online.

It saves customers the time they would have spent waiting in lines at branches and protects financial institutions from fraudsters.

Face recognition is used for authenticating individuals based on their distinct facial features. ID scanning solutions can cross-reference and verify images from IDs and passports with real-time facial recognition.

Additionally, ID scanning solutions like ScanDoc use liveness face recognition. It’s a highly advanced technology for ID scanning fraud prevention and identity theft protection.

Attackers take photos, videos, masks, or deepfakes to impersonate their victims. Liveness face recognition ensures the person from an ID is present in real-time.

Face Recognition

How to Implement Face Recognition?

Face recognition is often applied in financial institution scenarios. For instance, many banks provide online services to avoid long lines in their offices. When a client wants to open a bank account, request a new credit card, or apply for a loan, ID scanning combined with face recognition is a standard practice.

It’s a simple and secure process. Customers scan their IDs using a mobile phone. Then they take a selfie for face recognition. The system compares a taken selfie with an ID photo. Lastly, liveness detection confirms a living person is trying to request financial services.

Implement Secure ID Scanning Technology to Protect Your Company

Other than spotting fraud and preventing identity theft, it’s extremely important to protect customer personal data. Any potential data breaches can leave unrepairable consequences for your business. Learn more about the risks of not investing in a secure ID scanning solution.

5 Risks of Not Implementing Secure ID Scanning Solution

Damaging brand reputation
Losing customer loyalty and trust
Experiencing financial loss
Disrupting business operations
Dealing with legal consequences

Want to Implement Secure ID Scanning Solutions?

ScanDoc is a secure ID scanning solution for preventing fraud, and identity theft and protecting your customer data.

Our ID and passport scanning technology can be implemented on any device. Due to its open API, ScanDoc is easy to integrate into your system.

Along with preventing fraud, and identity theft and protecting your customer data, ID scanning technology has other benefits. Some of them are time efficiency, reducing workload for your employees, improving customer experience, and stimulating business growth.

Interested in learning more about ScanDoc?

Fill out our contact form to understand how ScanDoc can improve your business.

Interested to see how ScanDoc can supercharge your business?

Request a Demo

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Document Scanning Software: OCR and MRZ Extraction

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Benefits of Automated ID and Passport Data Extraction for Businesses

Manual data entry often leads to inaccuracies, especially when dealing with international customers and complex names. ScanDoc's document scanning solution minimizes the need for manual input, ensuring more accurate and efficient data processing. In this article, we’ll explore the key benefits of automated ID and passport data extraction for businesses and how it can streamline your operations. [caption id="attachment_2521" align="aligncenter" width="810"] Data Extraction Example[/caption] What are the Benefits of Automated ID and Passport Data Extraction? Some of the key benefits of using document scanning solutions include a faster digital customer onboarding process, reduced paperwork, and lower employee training costs. Find out the rest of the advantages of automated data extraction below. Faster Digital Customer Onboarding Process One of the advantages of data extraction is a faster customer onboarding process. ScanDoc ID scanning solution accurately extracts information from the document in 1.5 seconds. In the case of a hotel, reception check-in, or providing bank services, you’ll be able to process more customers and reduce waiting lines. As a result, you’ll significantly improve customer service. Similarly, with online check-in and requesting bank services, customers can complete the data extraction process by simply scanning ID using a camera on any device. Implementing data extraction to your hospitality, financial, or other business offers your customers flexibility. For instance, 76% of people in an Opinion Research Corporation (ORC) study expressed that checking in ahead of time would minimize their potential frustration. Additionally, 41% of respondents answered they would rather choose a hotel with an online web or mobile check-in option. Reduced Paperwork The advantages of data extraction for employees include reduced paperwork. With less paperwork, your business can turn towards a more digital workplace while saving the environment and providing better service. ScanDoc supports over 500 document types including PDF, JPEG, PNG, and TIFF. You can simply upload images or PDFs of IDs and passports from your computer. ScanDoc will extract data the same way as it would with directly scanning IDs and passports. Your employees won’t have to manually enter the data which will reduce their workload, too. Lower Employee Training Costs The manual ID verification process usually requires extensive employee training. If your company is using a more complex CRM or other industry system, it may take more time and financial resources to train your employees. On the other hand, one of the benefits of automated data extraction solutions is lowering employee training costs. ScanDoc is user-friendly, quick to learn, and convenient to use in daily operations. Seamless Integration to Existing Systems If your business is already using a CRM, specific industry system, or application, it’s important to explore business data extraction solutions that easily integrate into existing systems. ScanDoc can be seamlessly integrated into any system using Open API, IOS, and Android SDKs. On top of that, ScanDoc is already widely integrated into hotel property management systems, financial institutions, airlines, etc. When it comes to implementing a data extraction solution, you can either installScanDoc on-prem or run it in the cloud. Corporations and enterprises with extensive IT teams and more resources might opt for on-prem information storage. However, smaller and medium-sized businesses usually go for cloud storage. Whichever option you see fit, ScanDoc can accommodate your business needs. Multilingual Capabilities In case your business operates in different markets, or you have customers from all over the world, you should still be able to accurately capture their data. Manually recording the data might present difficulty for your employees. With ScanDoc's ability to extract data from IDs and passports in multiple languages, you can smoothly operate your global business. Improved Data Quality Along with the mentioned automated data extraction benefits, ScanDoc captures clean and structured data. Automated data extraction minimizes issues with data consistency and completeness. When ScanDoc is successfully implemented into existing systems such as hotel property management systems, it transfers the data into the system without any need for manual labor. Fraud Detection From 2017 to 2023 the fraud detection and prevention (FDP) market doubled its worth (Statista). There are numerous solutions dedicated topreventing online identity theft and other advanced fraud tactics. ScanDoc business data extraction solution ensures data accuracy. ID scanning technology functions using optical character recognition (OCR) and machine-readable zones (MRZ) for data extraction. Both technologies are key to detecting false IDs. While OCR reads and extracts alphanumeric characters from ID documents, MRZ ensures two lines of alphanumeric characters at the bottom of the identification document are accurate. Along with these advanced business data extraction technologies, you can add another layer of protection with face recognition technology. For example, financial institutions implement online ID scanning face recognition for opening bank accounts and loan applications. Face recognition authenticates individuals based on their distinct facial features. Moreover,ScanDoc also uses liveness detection in face recognition. Liveness distinguishes fraudsters using photos, masks, or deepfakes to impersonate their victims. Scalability The number of your customers can drastically change between seasons. Also, your business can experience sudden growth. In both cases, you can avoid hiring additional staff. The advantages of automated data extraction include scaling your business without unnecessary costs. Automated ID data extraction can process higher volumes of customers while saving your resources. 24/7 Availability As you may operate in a global market, your customers reside in different time zones. Additionally, customer support services might only be available during regular working hours. With many customers having to work their 9 to 5 jobs, they might find it difficult to adjust their schedules. An automated business extraction data solution can operate round-the-clock without human intervention. It provides flexibility to your clients to choose the most convenient time for their ID scanning process. Supports Remote Operations Automated data extraction has various business use cases. As mentioned before, it can be utilized for online hotel check-in or for requesting services in the finance sector combined withface recognition. However, it’s widely used in fully remote operating businesses. For instance, ScanDoc identity verification is convenient for platforms for independent freelancers and contractors or for applications for pairing individuals to share assets. There’s no need for an in-person contact to carry out an ID verification. [caption id="attachment_2532" align="aligncenter" width="810"] Simple API[/caption] Document Data Extraction ScanDoc Other Business Advantages of Automated ID and Passport Data Extraction Time Efficiency Reducing Workload Improving Customer Experience Cost Savings Easy to Use Reliability and Accuracy Organized Information Storage Data Security and Safety Competitive Advantage Business Growth Learn more about the advantages of automated data extraction for your business here. Considering Automated Data Extraction Solution for Your Business? Regardless of your industry, ScanDoc data extraction solutions can easily be integrated into your business. You can install it on-prem or it can function in the cloud. It also can be used on any type of device with a camera. Moreover, since it’s easy to use, your employees won’t need any additional training. Interested in how your business can start using ScanDoc data extraction software in daily operations? Contact us to find out more information on ScanDoc’s use cases, integration process, and pricing list.

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