Customer verification is
|| a related but separate process from that of authentication. Customer verification complements the authentication process and should occur during account origination. Verification of personal information may be achieved in three ways:
- Positive verification to ensure that material information provided by an applicant matches information available from trusted third party sources. More specifically, a financial institution can verify a potential customer's identity by comparing the applicant's answers to a series of detailed questions against information in a trusted database (e.g., a reliable credit report) to see if the information supplied by the applicant matches information in the database. As the questions become more specific and detailed, correct answers provide the financial institution with an increasing level of confidence that the applicant is who they say they are.
- Logical verification to ensure that information provided is logically consistent (e.g., do the telephone area code, ZIP code, and street address match).
- Negative verification to ensure that information provided has not previously been associated with fraudulent activity. For example, applicant information can be compared against fraud databases to determine whether any of the information is associated with known incidents of fraudulent behavior. In the case of commercial customers, however, the sole reliance on online electronic database comparison techniques is not adequate since certain documents (e.g., bylaws) needed to establish an individual's right to act on a company's behalf are not available from databases. Institutions still must rely on traditional forms of personal identification and document validation combined with electronic verification tools.
- ↑ Authentication in an Internet Banking Environment, App. at 13.
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