As more customers go online to set up new bank accounts, rent cars, or buy insurance, the need for Know Your Customer (KYC) and Identity Verification (IDV) gives no sign of slowing down. This article looks at how businesses dealing with data extraction from identity documents can minimize processing costs and lower their risk of errors thanks to Alphamoon’s Intelligent Document Processing (IDP) platform. Read on to learn more about:
- Difference between manual document processing vs. document automation
- Benefits of automated document processing
- Automating identity document processing
- Most common data extracted from identification documents
- What industries benefit from automated identity document processing?
Looking at the data, we see that in 2020 the Identity Verification market was valued at approx. $8 billion, with a prediction of doubling by 2025, according to a StraitsResearch report. In the financial sector alone, the global digital banking platform market size had an estimated value of $3.95 billion in 2019, with a projection to triple and reach $10.87 billion by 2027.
While improving the user experience for customers, the emergence and adaptation of online identity verification generates costs and requires setting up new processes and workflows for service providers.
Before we move on, here’s an important question: have you ever played Chutes and Ladders?
The game involves players racing each other to be the first to reach the finish line of a 100-square board. On their way, they come across a number of obstacles (chutes) and assets (ladders). While the first one slows the player down with an involuntary detour, the second speeds the journey up, helping them to get ahead and reach the finish line much faster.
The “game plan” of businesses across any industry, banking, skip tracing, insurance – you name it – is to avoid the pitfalls of faulty or outdated processes and spot opportunities for streamlining and simply “getting things done” faster.
Automated identity verification offers exactly this kind of opportunity.
Relying on manual client verification is a tedious and time-consuming process (manual processing of IDs and passports, including data entry into systems and comparing the collected information). Faulty or outdated solutions only add more work, becoming a “chute” or obstacle, slowing the entire process down.
A productive approach involves using a Machine Learning (ML), Artificial Intelligence (AI), and Natural Language Processing (NLP)-powered platform that can support and handle the workload of data extraction. More on that later.
Manual document processing vs. document processing automation
Before the widespread digitization of services, the go-to protocol for identity verification required an in-person visit to a local business branch to submit proof of identity, such as an ID, passport, driving license, or other.
Let’s take a moment to visualize a picture, probably far more familiar than we’d like it to be.
You arrive at the bank, local insurance branch, or other office and can already see the waiting line from the door. As you step in, you accept that your plan to pop in and out to submit some documents quickly is just not going to happen.
The procedure was no easier for those on the business end. Clerks and workers were faced with hours of tedious and repetitive tasks, manually identifying relevant information from every client’s documents and processing it by typing it into a form, system, or database.
The process was slow for all sides. Not to add, there is also a risk of costly errors that can result in serious consequences. When it comes to dealing with personal data, a small mistake takes a lot of effort to fix. Inaccurate information needs to be rectified, meaning another trip to the local branch, where forms must be completed all over again, or an additional statement explaining the mistake needs filling in.
If faulty information is processed before the mistake is spotted, the data may be copied and filled into multiple other systems, databases, and projections, creating further losses.
Quite a nightmare, huh?
Considering the above, the investments in automated solutions take on a new light (and value). It means removing the boundary of physical presence (significantly saving business’ and the customers’ time), improving user experience, and expanding the process to borderless availability. Take the route taken by fintech businesses like Zen or Revolut, where KYC and identity verification happens within the mobile app.
However, the automation needs to work on both sides, and avoid leaving physical workers to manually maneuver through masses of online documentation to extract and verify data.
While technology reaching the end-users has become much more advanced, the development of tools to process the increased volume of solutions for these clients is still ongoing. Without the introduction of effective processes to automatable tasks, innovative, on-the-go solutions will be met by long waiting times again, as clients and businesses find themselves stuck, not in long lines but in digital bottlenecks.
Another factor to keep in mind is that the more the business grows, the more difficult it gets to keep control over each process and its elaborate elements, especially as they transition into their online alternatives. That’s why worldwide giants often end up losing money in layers of complex processes that no one even tries to optimize.
Read: Looking for ways to cut on unnecessary losses? Tigthen your payroll systems thanks to automated timesheets.
Benefits of automated document processing
In order to save resources, such as time and money, and create a more efficient and sustainable procedure for employees and customers alike, document processing calls for automation. Here, Intelligent Document Processing takes the spotlight.
Read: What is Intelligent Document Processing?
The earlier the stage that document automation is implemented, the better because it prevents redundant, ineffective systems from ever forming. This principle applies to businesses of every size – a small business generating a minute number of documents and a well-established company with large operations.
An effective automation workflow tool, such as Alphamoon’s IDP platform, is just the sort of tool (or ladder, as opposed to a chute) that is one step ahead of any unnecessary processes. It removes the tediousness of repeatable steps, simplifying and automating the processes.
Large volumes of documents cause bottlenecks. Let’s see what happens without automation in place.
For example, if a bank statement was sent to a process that calls for IDs and passports, this mistake could take employees a long time to spot and address if they are assessing all the documents by hand.
Alphamoon’s IDP has been trained to identify incorrect documents for a given workflow thanks to the Document Classification feature that can filter the documents that do not fit a particular category. With the mistake spotted straight away, time is saved, and internal KYC processes can be done faster.
Another example is that without invoice automation, Accounts Payables need to verify each invoice and individual transaction with the team responsible for it.
Alphamoon’s OCR, which is responsible for identifying fields of written texts within scanned documents, is based on Machine Learning (ML), meaning it continually learns from the documents processed by it. With time the platform’s accuracy increases while also decreasing the chance of misidentified or mislabeled data, a mistake that, in the case of, e.g., medical records or insurance policies, could have very serious implications.
The aspect of ongoing learning is one to keep in mind, as documents such as passports and IDs are particularly challenging in the case of image-to-text extraction. This is because of the noisy background and the mix of colors, symbols, and patterns used. It’s also worth keeping in mind that identification documents differ in terms of designs and languages, further increasing the overall complexity of document processing.
Client verification is a vital step for many industries’ business processes. It allows for:
- better allocation of Human Resources by removing the workload of manual verification from employees
- saving on costs by decreasing processing time and the number of steps involved in the process itself
- minimizing of errors connected to misplaced data
- introduction of a continual learning algorithm that improves in accuracy with each processed document
Agility, efficiency, accuracy, cost-saving – much can be said in praise of an IDP-based solution.
Automating passports & IDs processing: Classification and Data Capture
Now that we’ve compared manual and automated document processing, and identified potential bottlenecks that can emerge within business workflows, let’s go back to the main matter at hand – how Alphamoon assists in Automated Identity Verification.
By moving this Identity Verification process online, customers gain the advantage of being able to use the service on the go by sending in a scan of their document, which, thanks to the use of Optical Character Recognition (OCR) and trained algorithm, can read, identify, capture and extract information from such documents turning them into structured and processable data.
As the algorithm eases employees’ workload, they are no less in control of it. Alphamoon platform keeps humans in the loop as they are the ones overseeing and approving the identified information, and it can then be extracted in their desired format.
Data extracted from identification documents
Alphamoon’s platform has been trained to identify and process all relevant fields within identity documents. In the case of data extraction from IDs and data extraction from passports, these include:
- Name and surname
- Date of birth
- Gender
- Address
- Nationality
- ID number
- Expiration date
- Insurance number
- Personal identification number
The platform is capable of learning and easily adapting to new languages. For example, you can see how Alphamoon Workspace handled a US passport data extraction with zero-shot learning.
What industries benefit from automated identity document processing?
IDP is the right solution for all businesses that deal with large volumes of client-related paperwork, both in physical and digital formats. That’s why automation is of great relevance to sectors such as:
- finance
- insurance
- banking
- medical
- legal
- debt collection
- and more.
Even more so because automating the extraction of unstructured data from scans of identification documents plays a major part in regulatory compliance and new client onboarding within many sectors. It is, in fact, often one of the first steps that enable progression into further procedures across the following sectors:
Document Automation in traditional and challenger banking – from opening a new account, verifying the user’s access to personal online services, reviewing a bank loan application, or broadly speaking, ensuring document verification is in compliance with safety regulations such as KYC, AML, or eIDAS.
Document Automation Insurance – from creating insurance policies for individual clients, verifying information in mortgage underwriting to processing claims reports.
Document Automation in the Legal sector – identity verification and Customer due diligence processes within solicitor and law firms as part of the client screening and onboarding process.
Document Automation in Debt Collection and skip tracing – identity verification depends on the processing of all known documents linked to the debtor, including identification documents.
Process passports & IDs seamlessly with Alphamoon IDP platform
The ever-growing number of use cases and demand forecasts for advanced authentication points to its value in improving the efficiency and reliability of business processes. With Alphamoon, introducing and implementing such an automation solution means streamlining your business processes is within hand reach.
