Business is leveraging blockchain to modernize verification workflow

Identification verification is a basic a part of each day work. Folks want it in banks, workplaces, academic establishments, and medical services. Nevertheless, conventional id verification methods fail as a result of error-prone mechanisms, lengthy delays, knowledge silos, and dangers of non-compliance.

Corporations giant and small are more and more counting on rising improvements like blockchain to confirm the identities of workers, prospects, college students, sufferers, and extra. Blockchain acts as a privilegeless and immutable ledger to retailer knowledge securely, automating real-time checks and verification methods with cryptographically secured info.

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Conventional authentication methods have issues

In keeping with the Federal Commerce Fee, there have been greater than 1.1 million studies of id theft in 2024, leading to $12.5 billion in fraud losses. With the appearance of AI-driven deepfakes, id verification is changing into much more troublesome.

A yr in the past, OnlyFake generated authentic-looking faux driver’s licenses and passports from 26 international locations for simply $15 utilizing picture metadata with spoofed GPS areas, dates, and instances. These AI-generated faux IDs have efficiently bypassed KYC verification of common cryptocurrency exchanges and monetary service suppliers resembling OKX, Kraken, Bybit, Huobi, and PayPal.

The affect of id theft goes far past the monetary realm. In keeping with a report from the Identification Theft Useful resource Middle, id theft takes a extreme psychological toll, with 25% of victims contemplating suicide and greater than 70% being re-victimized by cybercriminals. With 19% of customers shedding as much as $1 million, victims are sometimes weak, offended, and missing belief.

To regain consumer belief, corporations implement multi-layered verification procedures and protracted KYC checks. Customers are requested to add their ID and supply proof of selfies a number of instances. Though these steady monitoring methods are meant to display screen and mitigate threat, they create new factors of friction between customers and companies.

Then again, prospects turn into annoyed with “double KYC” checks and abandon the method, and companies lose income. In the meantime, regulators proceed to tighten KYC-AML guidelines, however are unable to reconcile knowledge throughout disconnected methods. Consequently, the steadiness between compliance and consumer expertise stays elusive.

The issue is additional difficult for the two.6 billion deprived individuals who shouldn’t have entry to the web and shouldn’t have entry to e-KYC. In a state of affairs the place there isn’t any id verification system and no method to verify who one is, the very which means of human existence is being questioned.

Contemplating the worldwide state of affairs, companies are adopting blockchain for id verification. Rising applied sciences resembling blockchain permit customers to digitize, encrypt, and share their identities immediately with related authorities with out intermediaries, minimizing knowledge theft and rising general safety.

Blockchain for id verification

Blockchain makes id verification extra compliant and user-centric, whereas securely sharing verified credentials and delicate knowledge throughout platforms. Blockchain permits corporations to get rid of pointless bottlenecks and streamline the onboarding course of for workers, college students, sufferers, and customers with out sacrificing regulatory obligations. On the similar time, customers can preserve sovereign possession of their knowledge and select what knowledge is shared and the situations below which it’s reused/revalidated.

Not like consortium-based id verification methods, some blockchain-based protocols take a decentralized strategy, the place delicate knowledge is encrypted and saved off-chain and hashes reside on-chain. Customers can then show that their credentials are real with out having to trip to confirm their id.

Due to this fact, blockchain not solely protects customers’ knowledge sovereignty, but in addition permits companies to higher handle compliance insurance policies. By permitting customers to bypass repetitive id verification, companies could make onboarding easier and extra accessible.

Blockchain has democratic potential as corporations can customise their each day actions primarily based on the dimensions of their operations.

For instance, small and medium-sized companies can leverage blockchain-based options to realize enterprise-grade performance with out large prices. Inexpensive blockchain reduces administrative burden by automating repetitive duties and liberating up consultants’ time to concentrate on core performance.

Blockchain additionally streamlines workflow for small groups whereas complying with native regulatory pointers. Blockchain with transparency and auditable verification companies facilitates the screening of recent and current prospects with seamless employment, academic and legal background checks.

Midsize companies that can’t function with primary instruments but in addition shouldn’t have the assets to cope with enterprise-level complexity can even profit from blockchain. This know-how gives a scalable verification system that may develop as your workforce and organizational infrastructure grows, bettering operational effectivity throughout departments.

Blockchain has complete screening capabilities for high-volume verification and automatic periodic checks, making it very best for these midsize companies. They equally assist enterprise-scale validation with personalized APIs, superior compliance reporting, multi-party audit trails, and real-time disclosures.

American inventor and thinker R. Buckminster Fuller as soon as mentioned, “Humanity is buying all the correct applied sciences for the incorrect causes.” As the specter of deepfakes and id theft looms, blockchain provides a ray of hope for each customers and companies. They display how rising applied sciences can be utilized “for all the correct causes” to verifiably show humanity’s true id throughout all realms of existence.

learn extra: Verifiable Credentials: AI’s Antidote to Fraud | Opinion