Selfie identity verification: A key part of fraud prevention

Countless Americans fall victim to identity theft. In 2023 alone, 1.03 million saw their identity stolen, with the most likely victims ranging from 30 to 39 years of age—a key user demographic for digital businesses.

Moreover, research shows 2022 had the second-highest number of data compromise events in a single year, with 422.1 million victims. This means preventative fraud measures have become more important than ever, not only to bolster consumer trust and security but also to save money: Identity theft cost US businesses an estimated $56 billion in 2021 alone.

Using live ID selfie verification via mobile devices can help financial companies mitigate losses from theft while protecting their customers’ identities and improving the user experience.

Sources: ProofPoint, FTC, IDX

As technology and cyber security measures evolve, so do the ways fraudsters try to skirt them. Synthetic identity fraud, for example, has become the fastest-growing financial crime in the United States. It works by combining both authentic and fake information to create a new—or “synthetic”—identity. 

The latter has enough verifiable information to seem credible, allowing fraudsters to open fake accounts, make fraudulent purchases, and defraud a diverse array of businesses and organizations.

Presentation attacks—commonly known as spoofs—are also on the rise. This form of identity fraud sees a bad actor use another person’s physical characteristics through things like photo printouts or fake fingerprints to impersonate them during an onboarding process or gain access to their existing accounts.

Biometric verification, including selfie identity verification, has emerged as a key method to combat spoofs by comparing a person's physical characteristics to their identity documents and verifying they are who they claim to be.

What is selfie ID verification, aka selfie authentication?

Selfie ID verification is a form of ID card verification that requires the user to capture a selfie during the onboarding process and submit it through their mobile device. It then verifies that selfie against the driver's license, passport, or other government-issued ID provided, in an action known as one-to-one verification. 

Generally, this is carried out with a smartphone, reducing friction for the user, and is required for highly secure services, such as opening a bank account or accessing sensitive information.

This process was once carried out manually, draining resources, limiting scalability, and lengthening onboarding times. Modern automated solutions like Plaid Identity Verification are helping organizations break free from limitations while effectively mitigating identity fraud risk. 

They do so through facial mapping technology that compares specific facial features from the selfie—such as the distance between the eyes, nose, and ears—against those of the ID photo, ensuring they’re the same person.

Plaid IDV also verifies identity data against regulated data sources in seconds, reducing the risk of fake selfie verifications. 

Maximizing the effectiveness of selfie verification

To improve the remote identity verification process, selfie verification should be combined with what’s known as biometric liveness detection or a liveness check. This ensures that the user is physically present by requiring several selfie photos or videos to determine if they’re a real person or a passive fake. 

Also known as “anti-spoofing”, liveness checks reduce fake selfie verification efforts by confirming the input is a true biometric source (e.g., an actual eye, thumbprint, or—in this case—human face) rather than a false or recreated image of one (e.g., a printed photo). These techniques look at elements like skin reflectivity, patterns seen on screens, pixel changes and signs of image manipulation, depth, and more. 

Plaid Identity Verification, for instance, asks users to record short videos rather than simply uploading a photo—though those with slow or unreliable internet connections may fall back to the latter (this, however, carries a higher risk of fraud as static photos can be more easily spoofed than videos). The verification then applies complex machine learning algorithms to verify the person’s authenticity, as well as face-matching algorithms to check the person’s identity against their photo ID.

How reliable is selfie identity verification?

Statistics show excellent results when using selfie verification at scale. Plaid Identity Verification, for example, has achieved a success rate, also known as a pass rate, of up to 94%. However, some selfie verification systems have failed to identify users properly, locking them out of the onboarding process entirely. More generally, facial recognition technology has also been shown to create biases that disproportionately affect people of color. 

This is because the decision-making capabilities of AI algorithms are ultimately based on training data, which can include biased human decisions or reflect historical or social inequities due to factors like:

• The size of the AI training base

• The source of the data used to create the training data sets and the level of real-world representation

• The labeling of the data sets 

• The quality controls that govern the tagging process

• The diversity of the developer team

These concerns should be taken into account when creating a machine-learning model. In addition, industry-specific testing should be carried out to help eliminate potential bias. 

The importance of selfie verification for AML compliance

Beyond limiting identity fraud and reducing the associated financial costs, selfie verification can also help businesses meet Anti-Money Laundering (AML) requirements. A key piece of these regulations includes verifying that a customer is who they claim. By staying compliant, businesses avoid the risk of potentially hefty fines and penalties.

Plaid Identity Verification achieves this through a multi-pronged approach that: 

• Matches personally identifiable information (PII) such as name, date of birth, phone number, and social security number against authoritative data sources (think financial institutions or phone records.)

• Verifies the authenticity of the government-issued ID cards or documents, ensuring it’s not a printout and hasn't been digitally altered. 

• Confirms the user is who they claim to be through automated selfie verification technology and liveness checks

Robust protection for today’s evolving threats

As identity theft efforts grow more advanced—and as in-person identity checks become less user-friendly— digital identity verification is an essential tool for financial companies. 

Scalable, low-friction, and highly reliable selfie authentication provides a layer of security for sensitive online operations without sacrificing the equally important user experience during customer onboarding. This makes IDV ideal for maximizing business growth and limiting fraud risks. 

Learn more about Plaid Identity Verification