22 Jun 20237 min readin ID verification & biometrics

ID Verification in the Digital Nomad Age: Challenges and Solutions

Arif A. Mamedov

President and CEO at Regula Forensics, Inc.

Digital nomadism is now a part of everyday life for millions of people. According to Gartner’s forecast, by the end of 2023, 48% of global knowledge workers will work hybrid and fully remote. Taxes and consumer spendings that digital nomads contribute to local economies are convincing reasons for authorities to attract and retain such professionals. 

ID verification is mandatory for newcomers at every step, from the airport to a car rental office and bank. For many companies, this formal procedure hides numerous challenges: longer service time, inability to validate foreign documents, and fraud risks, to name a few.

In this article, we’ll discuss the difficulties your business may face when you acquire digital nomads as clients. And of course, we’ll also suggest some solutions to overcome them. Let’s get started.

How does the growth of the digital nomad community affect companies?

A travel worker spends, on average, eight months in a new location, Nomadlist claims. A long-term stay requires some life arrangements, including legitimate procedures like obtaining a residency permit and taxpayer number, finding accommodations, buying a local SIM card, and renting a vehicle. These cases include ID verification as a part of the formal procedures. As a result, many businesses and institutions face the need to verify foreign IDs.

This infographic shows a digital nomad journey, from crossing the border to contacting a healthcare facility

A typical digital nomad journey starts at the border and includes many touch points associated with government and service companies

Regula’s global research shows that 62% of organizations are already seeing a surge in foreign document circulation. 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 typically involves reliable tools—ID scanners, advanced forensic devices, and software—and experts that help ensure the safety of countries and their citizens. 

As the digital nomad journey continues domestically, the level of security decreases from point to point. Public organizations and businesses don’t always have enough 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 are the challenges different sectors are facing right now:

Governmental institutions: Poor digitalization and UX

Digital nomads, who are tending towards digitalization for all areas of their lives anyway, expect to access most platforms remotely. That’s why public offices need to implement digital identity verification systems to authenticate users from around the world. However, the lack of tools, internal capacity, and know-how makes the task trickier.

The variety of IDs that digital nomads can possess is another issue. Since government agencies usually process domestic documents, the need to verify foreign ones can result in delays in legitimizing newcomers and barriers to accessing healthcare, social benefits, and tax filing for expatriates.    

Additionally, digital nomads may interact with government systems from different devices, so it is crucial to ensure that the ID verification procedure is accessible and optimized for various platforms. This forces governments to prioritize user-friendly interfaces, which have historically not been a major concern.

Finally, anywhere workers may become targets of cybercriminals seeking to exploit vulnerabilities in the remote ID verification process. As the technologies scammers use become more sophisticated, ID fraud is now a dire threat to government institutions.

Banking: Foreign ID challenge

Since interaction with banks is inevitable for digital nomads, financial institutions also suffer from a surge in foreign document verification cases. Based on Regula’s global survey, 85% of them report an increase, particularly in France (86%), Turkey (85%), and the USA (85%). Moreover, 44% of these organizations are facing a steady 25% rise in volume over the last year. 

Alarmingly, 62% of these businesses have been forced to verify foreign documents manually, which is time-consuming. Business representatives also report incomplete databases of document templates as a problem: 47% of companies face such challenges during customer onboarding. In many cases, they don’t have access to a comprehensive ID template database, or their current ID verification solutions don't provide all the required references. 

All this together negatively affects an organization’s security ecosystem, which is crucial for the Banking sector.

Telecom: Customer journey disruption

Telecommunications businesses encounter a similar problem: 76% of the industry players have seen a surge in foreign document verification cases. Since January 2022, they have increased by an average of 16%. Over half of the companies from the sector (52%) also experience difficulties because their solution has an incomplete ID template database.

Improved customer experience is an important success identifier for 49% of the industry players that use IDV solutions. But the incompleteness of their current document reference systems can be an obstacle for digital nomads who want to verify their unknown (and therefore unidentified) IDs in seconds when activating prepaid SIMs. 

It seems public agencies and different businesses share the pain points associated with digital nomadism. 

Can they use the same ID verification solutions?

The components of a secure and smooth ID verification process

An imperfect ID verification flow is at the heart of the digital nomad challenge. Since Border Control is a pioneering industry in providing the highest level of security, adopting their methods will enable organizations to stay available to foreign customers while remaining fraud-free.

The success factors in building a reliable ID verification process are:

  • Complete solution 

  • Simple UI and frictionless UX 

  • Fully automated document verification

  • Accuracy of verification and data safety

  • Flexible customization and integration

Let’s break down each factor:

Complete solution

In light of the digital nomadism trend, IDV solution completeness is determined by a comprehensive number of authenticity checks, a variety of document types for verification, and an extensive knowledge base. 

For example, multi-factor authentication involving biometrics is now commonplace in many industries, including ones that attract digital nomads as clients. Car-sharing businesses usually require users to take a selfie after scanning their driver’s license to conduct a biometric check, including verifying the selfie against the photo from the ID and matching the printed portrait, RFID chip photo, ghost image, and/or kinegram. 

Many companies also have to deal with electronic IDs. For example, the support of NFC-based verification of e-documents was one of the requirements of UBS, the largest private bank in the world, when they were replacing real-time video interviews with a fully remote automated verification process. Now it allows them to onboard new customers in a snap from their mobile banking app anytime and anywhere. 

A library of document templates is another valuable item. With more foreign IDs in circulation, fraudsters can exploit vulnerabilities in the ID verification process, including a lack of a clear idea of ​​how to verify a document issued abroad. 

The Regula database comprises over 12,500 detailed document templates from 247 countries and territories. It supports 138 languages and dialects, and contains standard and more specific ID types, such as marine licenses, refugee cards, voter cards, and many more. Moreover, Regula solutions identify the document type automatically.

Simple UI and frictionless UX

Clients, especially tech enthusiasts, frequent travelers, and digital natives, appreciate fast administrative procedures. Smooth customer onboarding is now a competitive advantage. In the financial industry, dropped onboarding processes are causing banks to lose a minimum of $5.7 billion annually, with abandonment rates increasing from 40% in 2016 to 68% in 2022. 

UX is also essential for carriers, who are usually the first touch point for digital nomads arriving in a new country. Some of them, for example, Wizz Air, deploy automated and self-service ID verification solutions. This allows access to services in seconds, which results in fewer queues, less waiting time, and higher customer satisfaction. 

Self-service also works for Telecom providers. When customers can verify their identity at their convenience to activate a SIM card they buy at a supermarket, the activation rates soar.

Accuracy of verification and data safety

When companies have to deal with dozens of foreign ID documents they haven't seen before, the accuracy of checks to prove their authenticity becomes even more important.

Thanks to advancements in technology and the expertise of IDV vendors, verifying document authenticity through a user's smartphone can be just as effective as utilizing hardware-based solutions. For example, Regula Document Reader SDK offers a comprehensive set of verification checks, including automatic recognition of document type and specific series, as well as verification of holograms, patterns, fonts, and other security elements. It also conducts cross-checks by matching data from the visual inspection zone, machine-readable zone, and RFID (NFC) chip. Paired with Regula Face SDK, the software allows precise photo comparison. Moreover, the solutions are on-premises, so no personal data is shared with third parties.

Fully automated document verification

In contrast to borders, document verification automation is not yet commonplace in business. For instance, some countries provide digital nomad visas with online applications. Typically, an applicant should fill in a form and email the required documents, including a copy of their passport or other ID, to the governmental agency. It’s time-consuming and painstaking, both for applicants and governments. 

An ID verification web component integrated into the system can speed up the application procedure, since all steps—from ID capture to data entry—are performed automatically, no matter how IDs are captured: with mobile devices or web cameras. The user just needs to scan their document. In addition, automated document verification eliminates the number of human errors and makes the process faster—a few seconds per document. It is also a way to reject fraudulent attempts to apply using forged ID copies.

Flexible customization and integration

Many businesses are already faced with the need to implement cross-platform solutions for ID verification. For example, conventional banks, now competing with neobanks, which are more flexible with remote services, are trying to create a new experience for opening accounts and accessing banking products for their tech-savvy customers.  

Good IDV software enables you to organize an enhanced identity verification process on any platform, whether it is a mobile, web, or desktop application. The IDV flow's appearance can be tailored to seamlessly integrate with your app's user interface, allowing for easy customization.

As a result, your services can be available to customers 24/7, like border crossing checkpoints. Moreover, each access attempt is checked thoroughly, yet immediately, without any friction for users. Your verification system gets more secure, and your customers feel satisfied and welcome.

Regula, a one-stop identity verification vendor

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

With Regula’s cross-platform document and biometric verification backed by decades of expertise in forensics and business, you can easily adapt your ID verification process to the needs of digital nomads while staying compliant and fraud-free. 

The level of security that our software- and hardware-based tools provide is equal to the level of security at a country's border. Request a demo to learn more. 

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