Confirming who someone is online is one of the biggest challenges businesses face right now. Identity fraud cost U.S. consumers $10.3 billion in 2022, according to the FTC. Smart companies do not rely solely on a username and password. They use multiple layers of identity verification to confirm the person on the other end of the screen is exactly who they claim to be. From financial services to healthcare to e-commerce, strong ID verification is no longer a nice-to-have feature. It is a legal and operational necessity. Here are seven methods businesses actually use today.
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Document-Based Identity Verification Using Government-Issued IDs
This is the most widely used method. A customer submits a photo of their government-issued ID, like a passport or driver’s license. The system uses AI to check that the document is real, not expired, and not digitally altered. Over 4 billion people worldwide hold some form of government ID, making this the logical starting point for most verification workflows. The technology reads holograms, microprinting, and layout patterns that vary by country and document type.
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Biometric Facial Matching with Liveness Detection
After submitting an ID photo, the customer takes a selfie or a short video. The system compares the live face to the face on the document using facial geometry measurements. The accuracy in top-tier systems is well above 99%. A liveness check is usually added to prevent someone from holding up a printed photo or using a deepfake video to fool the camera. Passive liveness detection, which requires no special actions from users, is quickly becoming the industry standard.
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Knowledge-Based Authentication
This method asks the user questions based on their financial or personal history, like a previous address, car payment amount, or mortgage lender. The answers come from credit bureau and public records data. It is fast but not perfect. People with thin credit histories may find it impossible to answer the questions accurately. Organized fraudsters have also become skilled at researching answers through social engineering, which is why most companies now use KBA as one layer among many, not as a standalone check.
- Database Verification Against Credit Bureaus and Government Records
Companies check the information you provide against multiple external databases. This includes credit bureaus, government records, and sanction lists from agencies like OFAC. If your name, date of birth, and address match across several data sources, confidence in your identity increases. This is a passive check that happens in the background during account signup, often completing in under a second. Most consumers never know it is happening. Fintech and banking apps rely on it heavily during onboarding.
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One-Time Passcodes via SMS or Email
A one-time passcode sent via SMS or email confirms that a person controls a specific phone number or email address. It does not verify identity on its own. But as part of a multi-factor process, it adds a solid layer of confirmation. Banks and fintech apps rely heavily on this step. The weakness is SIM-swapping fraud, in which attackers redirect SMS messages to a different device. That is why security-focused businesses are moving toward authenticator apps and hardware keys as stronger alternatives.
Many organizations pair one-time passcodes with broader identity security infrastructure from providers like Entrust to strengthen authentication workflows and reduce the risk of unauthorized account access across digital platforms.
- Step-Up Authentication at High-Risk Transaction Points
High-risk transactions trigger extra verification steps in real time. A large wire transfer, a new device login, or a password reset might require the user to re-verify mid-session. This is called step-up authentication. It limits fraud without forcing every single user interaction through a full verification cycle. The goal is frictionless for genuine users and flagged for suspicious ones. Most modern fraud detection engines use machine learning to determine in real time which transactions require an extra step.
- Continuous Behavioral Biometrics During Active Sessions
The industry is moving toward passive, ongoing verification during active sessions. Behavioral analytics track typing speed, mouse movement, scroll patterns, and device angle to build a real-time confidence score that the right person is still present. This removes friction for genuine users and automatically flags suspicious sessions. In regulated industries like banking, behavioral biometrics are already in production use. By 2027, analysts at Gartner project that over 40% of large enterprises will be using continuous authentication as part of their access security strategy.
