Customer identity verification for clients and businesses

As companies across various sectors embrace digital transformation, one challenge consistently emerges: finding the right balance between security and customer experience.

A seamless, intuitive identity verification (IDV) process can enhance user satisfaction, but often at the cost of security. Conversely, implementing stringent security measures may compromise user convenience and hurt conversion rates. Whether you’re launching a new mobile app or refining an existing web service, optimizing the IDV process is crucial for both trust and growth.

This article explores customer identity verification from the user’s perspective and highlights how businesses can build secure yet user-friendly verification flows.

What is Customer Identity Verification?

Customer identity verification involves confirming that a user is a real individual acting in good faith. This process typically relies on data from government-issued IDs—passports, driver’s licenses, residence permits—and includes collecting and validating personal details like full name, birthdate, and address.

In regulated industries like banking, IDV is mandatory. For example, U.S. banks must follow the Customer Identification Program (CIP), which requires verifying customer identities as a legal obligation.

At its core, IDV involves document and biometric checks—capturing a user’s ID and selfie to ensure authenticity and prevent fraud. While the process must be robust, it also needs to remain as smooth and accessible as possible.

Users’ pain points in the IDV journey

By evaluating client feedback and interviewing one of the most mobile demographics—digital nomads—we identified eight common obstacles users face during identity verification.

1. Manual data entry

Manual form-filling is tedious and error-prone. In fast-paced sectors like e-commerce or mobility services, users expect speed. Having to enter personal details manually slows down onboarding and increases the likelihood of errors.

Example: First-time customers at Lloyds Bank must enter all personal data by hand before beginning ID verification. Automating this step would improve both speed and accuracy.

2. Limited document support

As services become global, IDV systems must accommodate a broader range of ID types. Yet many platforms support only select documents, creating friction, especially for digital nomads.

Example: Etsy requires sellers to upload government-issued IDs, but the selection is country-dependent and often limited. This deters legitimate users whose documents aren’t accepted.

3. Poor user interface and UX Design

Confusing interfaces, unclear instructions, and a lack of localization frustrate users. In our survey, 28% of digital nomads cited poor UX, while 16% pointed out language barriers.

These issues result in higher abandonment rates and reduced customer satisfaction.

4. Technical limitations

Technical glitches, such as weak internet connections or budget devices, often interrupt the IDV process. Poor camera quality, low lighting, or outdated devices lead to retakes and friction.

Additionally, noncompliance with the latest ID standards (e.g., RFID chip support) can cause failed verifications.

5. Inconsistent interfaces

Disjointed verification flows—especially those relying on multiple vendors—confuse users. Switching apps mid-process, such as uploading a selfie in a different app than where sign-up occurred, raises red flags.

Consistency in branding and UX is vital to maintain trust.

6. Security doubts

Customers are understandably concerned about sharing sensitive data online. If an app doesn’t clearly explain how data is secured, users may abandon the process.

34% of respondents in Regula’s survey expressed such concerns.

7. Lack of pre-deployment testing

Many businesses don’t fully test IDV systems using real-world documents or diverse user groups. This results in unforeseen issues during rollout, damaging the customer experience.

Testing with focus groups is essential to identify weak spots and fine-tune the system.

8. Overuse of full IDV for low-risk scenarios

Requiring full identity and selfie verification for all users, regardless of risk, can be excessive. In many cases, verifying an email or phone number may be sufficient.

Implementing risk-based IDV allows companies to reserve stringent checks for high-risk users.

The role of technology in enhancing both UX and security

To deliver a streamlined yet secure verification process, businesses should adopt advanced technologies that minimize friction and maximize trust.

Key capabilities include:

• Guided capture and quality checks: Help users take valid document photos on the first try.
  
• Automatic document type detection: Ensures accurate verification by applying relevant checks.
  
• Auto data extraction: Fills out forms using OCR and MRZ data, reducing human error.
  
• Cross-validation of data: Compares information from MRZ, VIZ, and barcodes for consistency.
  
• Liveness detection for documents and faces: Detects fake documents or spoofing attempts.
  
• Comprehensive document database: Supports IDs from various countries and regions, helping verify digital nomads and international users.
  
  
• Cross-platform customization: Maintains consistent branding and localization across all devices.

A glimpse into the verification flow: User vs. software perspective

Verification step	What the IDV software does	What the user does
Document image capture	Evaluates focus, alignment, and lighting for quality	Scans their ID using a phone camera
Document analysis	Identifies MRZ, photo, barcode; detects fakes or screen-based documents	Waits a moment for system feedback
Data extraction	Reads text and chip data; populates forms automatically	Confirms pre-filled data if prompted
Selfie capture	Assesses image quality and performs liveness detection	Takes a selfie
Face matching	Compares selfie with ID photo	Waits while verification is completed
Final verification	Transfers verified data to the relevant business system	Gains access to the service or completes onboarding

Building a better IDV flow without sacrificing security

A few key principles can help refine your identity verification process:

• Ask only what’s necessary: Collect minimal personal data—just enough to verify the identity without creating friction.
  
• Embrace automation: Technologies like auto-fill and passive liveness detection accelerate the process while reducing errors.
  
• Tailor to risk level: Implement tiered verification, with stringent checks only where justified.
  
• Keep software and templates up to date: Ensure compatibility with new document versions and evolving regulations.
  
• Test with real users: Involve diverse focus groups to uncover potential roadblocks.
  
• Understand document nuances: Stay informed about security features and formatting quirks of international IDs.
  
• Comply with local regulations: Align IDV processes with specific industry and regional requirements to avoid penalties and inefficiencies.

Conclusion

Creating a secure and user-friendly identity verification process is no longer optional—it’s a critical component of building trust and driving growth in the digital landscape. While stringent checks are essential to prevent fraud and ensure compliance, they must be thoughtfully implemented to avoid frustrating legitimate users.

By adopting advanced technologies, automating key steps, and tailoring the verification process to different risk levels, businesses can strike the right balance between security and user experience. Regular updates, thoughtful UX design, and comprehensive testing across diverse user groups help ensure that verification flows remain smooth, efficient, and inclusive.

Ultimately, the goal is to make identity verification feel less like a hurdle and more like a seamless part of the customer journey—one that empowers users while protecting businesses.

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DISCLAIMER – “Views Expressed Disclaimer: Views and opinions expressed are those of the authors and do not reflect the official position of any other author, agency, organization, employer or company, including NEO CYMED PUBLISHING LIMITED, which is the publishing company performing under the name Cyprus-Mail…more