Apr 07, 2023
3 min read

Identity Verification 2024: Electronic Identification and Digital Identity

Read this article on electronic identity verification to minimize the chances of being tricked by criminals.

Identity verification is key for financial services, from banks to crypto platforms. The process involves verifying the identities of clients to minimize the possibility of criminal activity and comply with government regulations. There are many approaches to this task, but one of the most efficient ways to get it done is through electronic identity verification (eIDV).

We at Sumsub prepared this article to explain what eIDV is, how companies can benefit from it, and how regulations differ across countries. 

What is identity verification?

Before we get into eIDV specifically, let’s go over what identity verification is in the first place. 

Identity verification is the  process of establishing and verifying the identity of a new user. This is to confirm their authenticity  and minimize the risk of illegal activity, such as money laundering, terrorism financing, forgery, fraud, and so on. 

During the identification stage, the following information is typically collected from users:

  • Full name
  • Residential address
  • Date of birth

After collecting this information, companies have to verify it by requesting identification documents. This can be an ID card, address card, or driver’s license.

What’s the difference between identity verification and identity proofing?

There typically is no difference. Identity proofing and identity proofing refer to the same process: ensuring the authenticity of one’s identity. Identity verification, however, is more often used in legal language.

Suggested read: What is Identity Proofing and Why Does it Matter?

What is electronic identity verification?

Electronic identity verification, or simply eIDV, is conducted remotely through digital means, and does not require the customer to carry on any physical documents or scans. Instead, it’s enough to state one’s ID number and some additional personal information. eIDV employs certain tools, such as biometric checks, digital ID, face recognition, and many more, to ensure the legitimacy of the client. 


Since eIDV doesn’t require documents, verification can be performed faster than standard identity verification (IDV), which typically requires uploading IDs. What’s more, eIDV solutions can recognize, verify, and compare customer data with open databases much faster than document-based solutions. 

Sumsub recently launched a fast and easy eIDV solution to onboard more users from certain countries and securely verify their identities in just one click

How does eIDV work?

There are three main methods of electronic identity verification:

  1. ID document verification 

An applicant uploads their ID document, which is verified by a verification company either manually or by using an automated solution. Automated verification can capture, extract, and analyze data from the document, allowing companies to verify authenticity in seconds. 

  1. Facial biometrics

An applicant takes a photo of themselves, which is compared to the photo on their ID using biometrics. If the two photos match, the applicant is considered legitimate.

  1. Liveness detection

This is a more advanced approach to facial biometrics. The technology also uses biometrics to ensure an applicant is physically present, but can also detect deep fakes, 3D masks, inserted videos, and other tricks used by fraudsters. It works by scanning the applicant’s face, analyzing the biometric data, and creating a 3D face map, to which deep learning is applied to discover intricate structures in the data. 

eIDV challenges

When dealing with electronic identity verification, companies often face a variety of challenges. Some of them include:

  • Documents from different countries
  • Verifying customers with digital IDs instead of physical documents (e.g., applicants from India)
  • Ensuring that collected information is protected from hackers
  • Staying up to date with emerging fraud schemes
  • Maximizing onboarding rates while complying with the regulations

Companies can waste a lot of resources trying to learn all the different regulations and adapt in a constantly changing environment. An automated solution can do all the grunt work for them, checking documents from all over the world and handling all the specificities of each country. This can bring verification down to just a couple of minutes.

eIDV by country

More and more countries have adopted electronic identity regulations, allowing companies to use eIDV to verify the identity of their customers. The most widely implemented system in the world is  in India, where 95% of the population have a digital ID. The European Union is also taking steps to adopt eIDV and make it more accessible. In particular, the EU expects that 80% of its citizens will use a digital identity for verification purposes. The US and the UK are also taking steps towards digital citizenship, adopting digital ID systems and using biometric verification.  

Benefits of efficient eIDV

Companies can use eIDV for both compliance and convenience. Here are some of the key benefits: 

  • Compliance with AML regulations. It’s important to note that there are penalties for inadequate compliance. Moreover, eIDV is backed by regulations such as the EU’s 4th AML directive (AMLD4) and the US Bank Secrecy Act. Electronic Identity Verification is also recommended by the Financial Action Task Force (FATF)
  • Ensuring ID authenticity and the existence of the document holder
  • Reducing abandonment rates through fast and convenient onboarding. Customers will be able to easily access your services from the comfort of their homes at any time

To conclude, eIDV is gradually becoming more accepted and widely used across the financial industries. Implementing the solution will help companies speed up the verification process, while staying compliant with regulations. As a result, companies will onboard a higher number of new customers.


  • How does identity verification work?

    Identity verification is conducted by collecting a person’s information (e.g., name, address, and date of birth) and comparing it to a verified source—typically government-issued documents or, in certain cases, open databases.

  • What is digital identity verification?

    Digital identity verification, also known as electronic identity verification (eIDV), is the process of collecting and verifying a customer’s information online. This can be done by submitting a digital version of their identification document and going through an additional check (e.g., a biometric check).

  • What does identity validation mean?

    It’s the same process as identity verification. It means collecting customer information and verifying it through comparison with a reliable source, such as an ID or database.

  • What three methods are used to verify identity?

    The three most popular verification methods include:

    • ID document verification
    • Facial biometrics
    • Liveness detection

  • What are electronic identification systems?

    Electronic identification systems are automated solutions used to verify submitted customer information. Some systems capture, extract and analyze submitted documents to ensure their authenticity. Other systems use applicants’ biometric information (e.g., facial biometrics or fingerprints).

  • How to use identity verification in business

    Identity verification is necessary for businesses to comply with regulations. At the same time, businesses can lose customers during the onboarding process, if applicants are overwhelmed by the number of documents they have to submit. That’s why it’s essential to build a user journey that spreads out the verification process across multiple stages and doesn’t request everything at once.

AMLBiometricsCustomer OnboardingDigital IdentityFinancial InstitutionsFraud PreventionIdentity Verification