Age verification is the practice conducted by businesses, financial institutions, online businesses, and even the health care industry. It is conducted to ensure if a customer or user is suitable for the product or service. Although it is a very crucial due diligence measure many organizations overlook its significance and don’t perform it in their customer onboarding process. Let’s have a look at this vital part of customer due diligence and see how it affects businesses.
Which businesses need to perform age verification on their customers?
Age verification is the regulatory obligations of several businesses and even for some public sector entities. Below is the list of entities that are liable for the age verification of their customers.
- Online gaming, gambling, lotteries, and dating websites
- Blockchain businesses (cryptocurrencies)
- Financial institutions
- Age-restricted goods sellers (Alcohol, drugs, medical marijuana sellers)
- Drug stores
What is the significance of Age verification?
Age verification is becoming crucial day by day. An increasing number of businesses are integrating it into their customer due diligence practices. This rise in the use of age verification is led by the acceptance of its importance in achieving several business benefits. Below are a few things that highlight its significance for businesses.
It’s a regulatory obligation
Age verification is important for numerous industries, due to their regulatory obligations. Non-compliance leads to fines and penalties in the form of monetary losses, and jail. So it is crucial to prevent these losses.
Identity theft is increasing and it is a problem for businesses. Research by the insurance information institute of the U.S states that 14.4 million identities were stolen in 2018, and most of them were used to defraud businesses. It is a common practice that minors or identity thieves use stolen/fake ID cards to buy restricted goods. On the other hand, developing synthetic identities is quite common and child identities are primarily used in this setup. Age verification identifies such frauds.
Major data breaches hit the healthcare industry recently and increased the risk of medical identity theft. One stolen medical identity may cost more than a few dollars, it could cost someone to lose his/her life. It happened in several cases where the victim of medical identity theft might have been given wrong treatment if his/her identity, age and medical credentials are not cross-checked before giving the treatment. The medical and identity credentials of the victim are switched with the credentials of the criminal once a stolen medical identity is used.
Other than the health care industry, it is also the corporate social responsibility of businesses to verify the age of their customer before onboarding them. Every year 4300 youngsters die due to excessive alcohol consumption. These deaths can be controlled with effective age verification measures by the alcohol sellers.
Take away from this read is that nowadays, age verification is as easy as ABC, due to artificial intelligence and machine learning. Most of the merchants selling underage goods and services are now using age verification solutions to verify the age of their customers. As the “I’m 18 years old” checkbox is no more useful. These age verification solutions can verify the age of a customer in real-time by screening their identity documents. There is no fear of false positives or losing legitimate customers as these solutions deliver high accuracy (98.67% in some cases) and can verify the age within seconds.
To wrap up, age verification is an integral part of KYC screening process and ignoring it leads to huge losses. Now that online age verification solutions are also available in the market businesses can leverage this technological advancement to on board a reliable customer base.