Foreign ID Document Verification for Businesses: Addressing the Challenges of the Digital Nomad Era

Regula found out that, starting from the summer of 2021, the number of cases of foreign document verification has grown an average of 21% across a variety of industries.

The explanation for this is simple. A long-term stay requires some life arrangements, such as obtaining a residency permit, finding accommodations, buying a local SIM card, obtaining an insurance policy, and more. All of these include ID verification as a part of the formal procedure. As a result, more businesses are facing the need to verify foreign identity documents. And in some countries, nomads have a higher chance of encountering issues.

The short answer is Yes, it is. Regula’s previous findings confirmed that 80% of finance and technology organizations are already witnessing a surge in foreign document circulation, with 62% reporting that they’re verifying such documents manually. This significantly prolongs the inspection time and, what’s worse, creates more opportunities for fraudsters. 

Usually, the most complete and accurate identity verification is carried out at state borders. It involves professional tools—ID scanners, advanced comparators, and specialized software—and seasoned experts trained to detect any irregularities.

But once the digital nomad journey continues domestically, the level of security decreases from point to point. Public organizations and businesses don’t always have enough trained specialists, capacity, and tools to prepare for the growing number of foreign customers. This leads to an upsurge in undetected fraud and financial losses.

Here’s the proof:

Is it possible to reduce such a risk for your organization? Absolutely.

The fact is, trying to detect identity fraud without the right tech tools is like going bear hunting bare-handed. This is especially true if you don’t have a team of forensic experts, have a high customer flow, and offer remote onboarding.

As Border Control is a pioneering industry in providing the highest level of security, adopting some of their methods will help organizations serve foreign customers while remaining on the safe side.

The list of documents used for the verification of nomads can vary depending on the country and its local migration laws. For instance, digital nomads in the UAE tend to submit work permits more frequently than their counterparts in Mexico (38% vs. 19%). But generally, there are certain documents that companies use for verifying nomads more often than for verifying citizens: 

• Passports (67%) 

• Proof of address (48%) 

• Visas or entry permits (43%)

• Residence permits (39%)

• Work permits (31%)

When companies have to deal with foreign ID documents they haven't seen before, the accuracy of checks to prove their authenticity becomes even more important. Yet, the variability of document types, along with their security features, makes it more difficult to establish a smooth identity verification process. 

Using subpar tools (not to mention not using them at all) leads to spikes in false acceptance and false rejection rates. The issue is that you'll never know there's something wrong until it's too late.

The accuracy of document verification is determined by a comprehensive number of authenticity checks and a variety of supported documents. The cornerstone of it is, perhaps, the latter—after all, you need to know what a genuine ID looks like, down to the tiniest detail, to be able to compare the provided document against it.

Regula’s comprehensive database includes over 13,000 document templates from 247 countries and territories. It supports 138 languages and contains both standard ID types (passports, national IDs, and driver’s licenses) and more specific types, such as marine licenses, refugee cards, voter cards, and more. Once submitted, Regula automatically identifies the document type and proceeds with data capture and numerous cross-checks.

Identity verification is a multifaceted process, consisting of a series of different operations needed to validate someone’s identity. As Gartner roughly puts it, the process can be described as an ID plus selfie check. Of course, each part of the equation includes numerous sub-checks as well.

For example, NFC chip verification is one of the most important checks for document authentication and verification, but it’s not the only one. There are also a myriad of checks to perform, from lexical analysis to evaluating font spacing in the MRZ code and detecting whether the photograph is correctly positioned.

That’s only the “document” part; then, there’s the “selfie” part.

Multi-factor authentication (MFA) involving biometrics is now commonplace in many industries, including ones that attract digital nomads as clients. According to Regula’s survey, 57% of companies have already implemented biometric verification (using face recognition or fingerprints), while 30% have such plans for the coming year. 

A bright example of broad MFA adoption is demonstrated in the Banking and Fintech fields: digital onboarding in UBS, the largest bank in Switzerland, involves comparing the document portrait (both the visible one and the one in the RFID chip) with the selfie to ensure the person is who they claim to be. Another example is car-sharing businesses usually require users to take a selfie after scanning their driver’s license to conduct a biometric check. 

To ensure credibility, the entire ID proofing process must be meticulously constructed. But when it consists of tens of moving parts, not only is it harder to implement and maintain, but the probability of errors stemming from disjointed components compounds. 

Opting for an ID verification solution from a single seasoned vendor can effectively mitigate this challenge.

People who are always on the go appreciate services that are adapted for smartphones and tablets. Identity verification is no exception. One-third of surveyed business decision makers, as well as nomads themselves, claimed mobile-friendliness is essential for them.

Thanks to advancements in technology, verifying identity through a user's smartphone can be just as effective as utilizing hardware-based solutions used by border controls. But, as always, there are many details to consider.

In our recent post, we covered in detail the threats of the remote onboarding process and why it’s essential to work with electronic documents (which contain NFC chips). As of now, there are no alternatives that can match the effectiveness of proper chip verification.

Another important aspect of remote identity verification is liveness checks for both submitted documents and individuals. 

The first one is addressed by using a video rather than a static image at the moment of document capture. Thanks to this, you can avoid situations when fraudsters submit an image of an image rather than a genuine document. In addition, Regula’s document liveness check also verifies the presence of dynamic security features, such as holograms.

The logic behind performing a biometric liveness check is the same: detect fraudulent attempts to pass an image (or even GIFs or pre-recorded videos) as a real person in front of the camera. The most secure type is an active liveness check, where systems ask a person to perform some random actions like moving closer or further away, or rotating their head.

Regula is ready to help your company address the challenges of balancing customer experience and fraud protection.

With its document and biometric verification solutions backed by decades of expertise in document forensics, you can easily adapt your identity verification process to the needs of digital nomads. And thanks to cross-platform availability, all your company’s touchpoints can be protected as reliably as at the state borders. Given the fact that over 80 border controls globally use Regula’s solution, we literally mean it.

Request a demo to learn more!