International economic institutions are faced with a expanding require to “know” – determine and authenticate – their buyers, to avert fraud losses, the funding of terrorism, funds laundering, and tax evasion. Failure to comply with appropriate identification of the institutions buyers can outcome in monetary losses, fines, and terrible publicity.

Existing ID Verification Practices at Monetary Institutions

Monetary institutions usually confirm ID for the following varieties of transactions:

  1. Account Opening: The Patriot act initially expected institutions to retain a copy of the ID presented for the duration of the account opening. This was subsequently decreased to requiring only the recording of important information and facts proving that ID was verified (e.g. driver's license quantity). Whilst it may possibly suffice to note the ID quantity, a basic clerical error, such as transposing numbers may possibly invalidate the proof of the ID verification. Capturing the ID card for the duration of the account opening approach confirms that the ID was verified, and opens the door for superior subsequent interactions with the buyer. Possibilities contain: a) Adding the photo ID to a bank-issued debit or credit card, with out the require for photo capture gear. Little photo IDs are employed by warehouse clubs in combined member/credit card applications. b) Displaying the ID/photo, private qualities, and signature to the teller for the duration of a transaction to cut down ID fraud.
  2. Routine Transactions: Machine-readable identification cards (ID cards, credit/debit/ATM cards) can be employed to determine a buyer. The teller application can pre-populate information and facts about the buyer to speed up the transaction, and to build a a lot more pleasant buyer encounter.
  3. Money Withdrawals: ID cards are usually expected for any money withdrawal by a buyer at a branch unless the withdrawal is at the customer's house bank and the buyer is personally recognized to the bank employee.
  4. Massive Transactions: Monetary institutions usually demand a number of pieces of ID for transactions more than a particular quantity threshold, which includes transfers and deposits. This is needed mainly because losses can happen with significant deposits (such as cashier's checks) exactly where the deposit is a forgery, but only detected soon after the quantity was withdrawn.
  5. Verify cashing: A current FDIC survey (1) showed that 7.7% US households are unbanked, and more than a quarter – 25.six % – of all households either never have a checking or savings account at all, or have a bank account but nonetheless pick to rely consistently on “option economic solutions” like payday lenders and pawn shops. Serving these buyers can be lucrative, specially in a hard economy, but demand options to positively determine a particular person who is not a buyer of the economic institution. This business enterprise is currently largely handled by verify cashing shops, pawn brokers, but increasingly viewed as an chance to bring buyer into shops (such as comfort shops and gas stations) by supplying verify cashing solutions. In verify cashing applications, the ID card is expected for initial account registration and for subsequent verify cashing transactions.
  6. Government Regulations: ID verification is expected for any economic transaction that may possibly demand government reporting, such as in the US money transactions more than $10,000. In nations with foreign exchange regulations, transactions require to be reported by government ID quantity. Most foreign exchange windows demand a valid ID.

Developments in Identification Documents

Post 9/11, it has come to be evident that government-issued identification (passports, national ID cards, driver's licenses) have been not sufficiently protected against forgery. The 9/11 Commission suggested that the U.S. strengthen its method for issuing identification documents, urging the federal government to set requirements for the issuance of sources of identification.

For international travel, the International Civil Aviation Organization (ICAO) problems a normal for biometric passports, or e-passports. E-passports contain biometric information and facts on the passport holder on a safe chip. Public important infrastructure is employed to authenticate the information stored on the passport chip. The United States (two) and most of the EU nations have adopted e-passports for all new passports issued.

Passports are only expected for international travel, and are not usually employed as ID in domestic industrial transactions exactly where state-issued driver's licenses are the main identification documents.

The style of state driver's licenses has usually been insecure and really uncomplicated to forge. The uncomplicated availability of counterfeit state ID documents creates a issue with ID theft, and the enforcement of liquor sales restrictions.

In 2005, President Bush signed the Genuine ID-“Enhanced Safety for Driver's License and Individual Identification Cards” Act (three). Genuine ID has been controversial, with various states demanding a repeal and replacement with the proposed PASS ID act. As of January 2011, Division of Homeland Safety issued a waiver of the deadline, but states have to be in complete compliance by May perhaps 2011.

In addition to Genuine ID, Michigan, New York, Vermont, and Washington are issuing Enhanced Driver's Licenses (EDL) (four). EDL's offer proof of identity and U.S. citizenship, are issued employing a safe approach, and contain technologies that tends to make travel much easier. EDLs are an option document to comply with travel guidelines beneath the Western Hemisphere Travel Initiative (WHTI) for getting into the United States from Canada, Mexico, or the Caribbean by means of a land or sea port, in addition to serving as the permit to drive. Michigan, New York, Vermont, and Washington situation WHTI compliant documents.

In spite of the opposition to Genuine ID, most states are implementing new driver's licenses and state ID cards that contain enhanced safety functions:

  • Magnetic stripes – magnetic stripes have been the primary system for storing information and facts on a credit/debit/ID card. They are not really safe, but are normally retained for compatibility with a significant installed base of gear.
  • two-D barcodes. EDLs demand a Machine-Readable Zone (MRZ) or barcode as backup to the RFID. Lots of states are adopting two-D barcodes in simple driver's licenses. two-D barcodes employed in Ohio and Georgia driver's licenses can retailer a lot more information, and information can be protected with encryption or digital signatures.
  • Radio Frequency Identification (RFID) chips. RFID is employed for Enhanced Driver's Licenses and the Trusted Travelers Applications (NEXUS, SENTRI, and Quick).
  • Ultra Violet Zones. UV zones include invisible symbols that light up only in the presence of UV light. These are hard for counterfeiters to copy.
  • Microprint. Microprint on driver's licenses prevents forgery. As with bank notes, microprint can be recognized with magnifiers and higher resolution imaging devices and make counterfeiting a lot more hard.
  • Colour and positioning of holder photograph. As with banknotes, colour patterns and placement are employed to identify forgeries.

Applications of ID Card Imaging

The availability of scanners and application to capture ID card magnetic stripes and pictures open possibilities for two levels of utilization of the ID card pictures:

Archival storage of ID card pictures gives a definite proof that ID cards have been presented. As noted earlier, they can offer levels of protection against ID theft by displaying pictures of the ID holder. Even a basic application of recognition technologies (comparing information and facts from the card text, magnetic stripe, and barcode) will detect numerous popular forgeries. Storing front/rear pictures of ID cards offer proof that the bank employee complied with the Patriot Act, acquiring the ID of a new account holder.

Authentication requires the ID verification to the subsequent level. Authentication options supply an automated method to ID verification, alerting the user of prospective danger aspects, forgeries, and expired ID cards.

Sophisticated ID detection systems (see instance:, usually contain a colour/higher resolution scanner combined with application to genuine ID cards. ID authentication options

  • Scan the ID in colour, with higher resolution
  • Study barcodes and magnetic stripe information
  • Confirm infrared patterns
  • Cross-verify information and facts in clear text, barcode and magnetic stripes
  • Warn if the ID card is expired, a particular person is beneath legal age, and so forth.

Automated authentication systems are employed, for instance, in liquor shops and restaurants to stay away from sales to minors. It is fascinating to note that the Transportation Safety Administration (TSA) has not implemented automated authentication on a wide scale. TSA has accepted bids for systems, but so far has restricted ID authentication to workplace instruction and hand-held UV lights.

Application of ID Scan/Archive and Authentication in Monetary Institutions

Most teller stations in economic institutions are equipped with a validation/receipt printer, a Computer, monitor and keyboard. Extra sophisticated institutions deploy money dispensers, money recyclers, coin recyclers, and signature/PIN pads.

Verify image capture has moved largely from centralized proof/reader/sorter operations to branch capture. A majority of economic institutions have implemented branch capture (est. 68% of branches) at the back counters. Back counter capture eliminates the “prime pass” but does not get rid of most of the back-workplace verify processing tasks. It delivers couple of fraud prevention possibilities – by the time the item is captured the particular person will have left the branch.

Fewer but a lot more technologically sophisticated institutions have implemented verify capture at the teller. Implementations of teller capture are expanding swiftly in 2010/2011 with numerous significant regional institutions adopting teller capture.

Sadly, present teller scanners are not suited for ID capture, and even much less for ID authentication

  • Very first generation verify scanners have been oriented towards the “lowest popular denominator”, 200 dpi bi-tonal pictures, which may possibly be enough for verify image exchange but not nicely suited for IDs.
  • The installed bases of devices have a u-track style that can't approach stiff things such as IDs.

Teller scanners are developed for a 5 year life cycle, but with declining verify volumes will final 7-10 years or longer. It is consequently necessary for the sector to assure that the subsequent generation teller scanner is a lot more versatile to shield the substantial investment expected to implement teller capture.

The presently offered no cost-standing options for ID authentication are not nicely-suited for branch banking, mainly because

  • ID authentication options are not integrated with other banking applications
  • Cost-free-standing ID authentication options are high-priced and would consume useful teller workspace.

It tends to make significantly a lot more sense to use teller verify scanners for ID capture. To allow future ID scan/ authentication applications, a appropriate teller scanner have to supply

  • A straight track for stiff ID cards. Due to the fact restricted footprint and the require of 100-item hoppers and stackers demand a u-shaped style, ID cards have to be scanned employing a “by-pass feeder” that enters nonetheless things soon after the bend, but prior to the front/rear cameras.
  • A resolution of at least 300 dpi, with 256 gray level image capture.
  • An integrated magnetic stripe reader.

The subsequent generation of verify scanning devices will enable institutions to capture ID pictures for

  • Archival storage of proof that the institution validated the ID
  • Automatic capture of buyer information and facts (name, address, age, sex) for new account opening or future promoting of unbanked / competitor prospects.
  • More logon safety by authenticating the teller employing the teller employee ID card.
  • Quicker teller service by automatically opening the buyer account when an ID or credit/debit card is captured -with out an added Computer peripheral device. This is typically employed in teller operations in international banks.
  • Recoding of ID pictures for show at teller workstations to avert withdrawals with stolen ID
  • A level of authentication supported by 300 dpi grey-scale pictures, such as decoding two-D barcodes, and matching ID card and account information with barcodes and magnetic stripe information and facts
  • Potentially adding ID photographs to bank-issued Debit/ATM cards, a practice effectively employed by warehouse clubs for combined membership/credit cards, with out added photo gear.

Application of ID Scan/Archive and Authentication in Alternate Monetary Solutions Channels Option economic solutions channels offer solutions that are mainly targeting the unbanked/beneath-banked population. Alternate economic solutions are supplied by pawn brokers, verify cashing shops, spend day lenders, gas station shops, casinos, comfort shops, and even prisons. A current Wall Street Journal write-up (five) ] lamented that the 2009 Credit CARD (Card Accountability Duty and Disclosure) Act “pushed a lot more Americans outdoors the banking method” in the name of customer protection.

Lots of alternate economic transactions are carried out on economic self-service kiosks. Kiosk integrator manufacture devices with a wide array of functions: ID card readers, debit/credit card readers, verify acceptors, money dispensers and acceptors, cameras, and even funds order and retailer worth card printers.

Due to the fact these buyers usually do not use a bank card as the ID or debit/credit card, the driver's license becomes the main identification tool. The following is an instance of an application implemented at comfort shops of a gas station chain with the CTS SB50E module in a self-service kiosk:

  • Client registers by inserting the driver's license. The ID is scanned, stored, authenticated by application, and returned to the buyer.
  • The buyer is registered employing information and facts from the ID (clear text, magnetic stripe and barcode).
  • The buyer feeds in the verify.
  • The ID and photo/video of the buyer is employed for approval by a human operator at a central place. The operator accepts the verify and it is endorsed, stamped and retained in the device, or rejected and returned to the buyer.
  • The kiosk dispenses money, a stored worth card, or a funds order (minus a commission).

Monetary self-service kiosks are funded by transaction charges, but are generally deployed as a promoting tool to bring buyers into the comfort retailer.

Future Technologies Advancements – UV and Colour Imaging

Whilst colour pictures are normal in most imaging applications, they have not been extensively adopted in US verify processing. But in international banking, the use of colour imaging and UV is expanding swiftly.

  • Asian applications demand greater-resolution colour pictures to authenticate “chops” – seals that function as signatures.
  • Central banks in India (six) and Latin America are establishing verify requirements that contain UV zones to avert fraud. The new Reserve Bank of India Verify Truncation Program CTS-2010 (7) functions contain use of watermark and printing of bank logos that are only visible with ultra violet pictures.

As a outcome, we will see advancements in verify scanner technologies, which includes UV and colour image capture for verify capture and authentication. Colour / UV image capture will supply the chance to additional strengthen the strength of ID authentication.