The world is moving towards total digitization and automation but this has created many loopholes for criminal entities. These loopholes have increased the risk for businesses that causes financial and non- financial losses. These losses can be prevented with the help of customer due diligence practices, also called KYC screening. Many businesses verify the identity of their customers by verifying their names, addresses, and identity documents, but these checks are not enough in some cases. Extended security is needed in some cases such as age verification.
As the name shows age verification is the practice to verify the age of the customer to be sure if that customer is entitled to get the services or the product he wished to get. Let’s see why businesses need to verify the age of their customers.
Most of the businesses need to identify their customers because of their regulatory obligations. Businesses that sell the goods harmful for minors are legally obliged to verify the age of their customers before selling any service or product to them. It decreases the risk for minors as it may cause harm to their health (mental and physical).
Common businesses that are obliged to verify the identity of their customers are alcohol sellers, drug sellers, online gaming and gambling sites, dating sites, hospitals, etc. All these cater to millions of customers on a daily basis and many customers are minors.
For instance, gaming websites in the UK are required to verify the identity of their customers before onboarding them. At least the name, address, and date of birth of the customer must be verified before allowing them to enter the gaming platform.
It’s the corporate social responsibility of the businesses to sell their goods and services only to people who are mature enough to use those products. Many children lose their lives and hard-earned money of their parents on online platforms entitled to adults.
Gaming addiction among children is increasing due to the abundance of such websites on the internet. In some regions, gaming websites, especially the ones that involve money are required to take concrete measures for reducing addiction and child exploitation on their platform. Other than gaming addiction drug and alcohol addiction causes health and life loss of children. It has made the businesses to invest in age verification practices, as it is the corporate social responsibility of a company and enhances its customer value.
The research found that children’s identities are used commonly to develop synthetic identities that are later used to defraud businesses and it has caused losses of worth millions of dollars. These losses prove to be the killing blow for small businesses. Because if a platform is scandalized for its lack of customer due diligence practices it loses customer value and faces penalties from regulatory watchdogs.
In case a customer is using a synthetic identity developed with the stolen credentials of a minor, he’ll be identified within seconds with age verification. Once the age is verified it will be found to be wrong and the business will be able to prevent fraud.
Given the significant need for age verification, most of the businesses are using online age verification solutions to verify their customers in real-time. These solutions verify the age of a customer in real-time through their identity documents using artificial intelligence. Age can be verified within seconds, using these solutions, so it enhances the user experience as well.
To wrap up age verification is the need for advanced due diligence practices of 2020 and beyond, for the security of businesses and consumers.