Identity Verification (IDV) Is Not Authentication: Why This Matters

12 June 2025

Identity Verification (IDV) Is Not Authentication: Why This Matters

12 June 2025

What is Identity Verification?

Identity verification is the process of confirming that someone is who they claim to be. It's typically done by checking identity documents, like a government-issued ID and matching it to a photo of the person using facial recognition.

Example: When a user opens an account with an investment app, they’re asked to upload a selfie and a photo of their ID. The app uses a verification service to verify that the ID is valid and the selfie matches the document photo. If everything checks out, the account is created.

This stage is also known as onboarding, enrollment, or account verification, and it’s a critical part of the identity verification process used by many financial institutions to prevent fraud.

Identity Verification in Numbers

The global digital identity verification market is projected to grow to over USD 22 billion by 2028 (Markets and Markets).

In financial services, nearly 100% of Tier 1 banks rely on identity verification companies to perform digital onboarding (Juniper Research, Gartner, Forrester), reflecting how widespread and essential these identity verification solutions have become.

Regulations like the EU’s AMLD5, PSD2, and eIDAS, or FinCEN guidelines in the U.S., require financial institutions to follow strict id verification rules. These laws have made verifying identities a legal requirement to detect risk and prevent fraud.

KYC, AML, and Their Link to Identity Verification

KYC (Know Your Customer) is a regulatory process requiring companies to verify the identity of their customers. AML (Anti-Money Laundering) refers to laws and procedures that aim to prevent criminals from disguising illegally obtained funds as legitimate income.

Both rely heavily on robust identity verification processes. You can’t stop money laundering without knowing who your users are. KYC and AML checks are typically conducted during onboarding, making identity verification a legal and operational requirement for financial institutions.

Without identity verification services, businesses would have no way to know who’s really behind an account. That’s why IDV is central to verifying identities, managing digital identities, and protecting personal information during account creation - not just to meet compliance, but to prevent fraud before it starts.

The Problem: KYC is Just the First Step

Once someone passes identity verification and creates an account, most systems stop checking who’s really behind the screen.

Let’s say your account is like a house. What is IDV? It’s the lock on the front door. If they get inside, and there are no cameras or alarms, anyone can do what they want.

That’s the flaw in many systems today: once the identity verification process is complete, no further checks are made. And that means if a fraudster gains access to the account - even with stolen credentials - they often face no resistance.

This is where identity authentication comes in.

Identity Verification vs. Identity Authentication

Verification: a one-time check to confirm a person’s identity (e.g., uploading an ID and selfie).
Authentication: an ongoing process to prove you're the same person each time you access or perform sensitive actions on the account.

Think of verification as setting up the account, and authentication as everything that happens after.

Imagine someone signs up for an investment app. They upload their ID, take a selfie, and everything checks out. The app creates their account and they’re good to go.

Now, a few weeks later, that person wants to do something more sensitive - like change their home address, make a large payment, or recover access to their account because they lost their phone.

The app needs to make sure it’s still the same person using the account. That’s where authentication comes in.

How Most Apps Handle Authentication Today

Most apps use methods like SMS one-time passwords (OTPs), call center checks, app notifications, or physical tokens.

These methods have their pros. SMS OTPs are easy to use. Call centers can help with unusual cases. Hardware tokens are secure in theory. App-based login is convenient.

But they all have the same problem: they don’t actually prove the person using them is the same person who was verified during onboarding.

An SMS OTP can be intercepted through phishing or SIM swapping. A token can be stolen. App-based checks just prove the person has the device - not that they’re the verified user. Even local biometrics like FaceID don’t help, because apps can’t tell who originally registered the face on the phone.

This is a huge gap in security—and it’s one that many fraudsters take advantage of.

Each of these methods checks something - a device, a phone number, a password. But none of them prove it’s the same person who set up the account.

Continuous Identity Assurance: The Missing Piece

To be truly secure, identity checks shouldn’t end after onboarding. You need to continuously check that the user accessing the account is the same person who originally passed identity verification.

This is known as continuous identity assurance. It doesn’t just check credentials or devices. It ties every action back to the real, verified identity of the user.

It connects the dots between verification and authentication - ensuring that no matter what action is taken, it’s done by the right person.

And that’s where most identity verification companies fall short.

Why Most Identity Verification (IDV) Solutions Fall Short

Many identity verification services also offer authentication, but usually through basic methods like SMS OTPs or local biometric checks. These are quick and easy - but they don’t confirm that the person trying to access the account is the same one who set it up, which opens the door to account takeover and identity fraud.

And that’s a big problem. It means fraud can still slip through the cracks.

Enter Keyless: Continuous Identity Assurance That Doesn’t Stop at Onboarding

Keyless closes the gap between identity documents and access by linking id verification with continuous authentication.

Every time someone tries to authenticate, we check both their face and their device using cryptographic techniques. We make sure it’s the same person from the start - every time.

That means:

No more guessing if a face or phone belongs to the right person.
No more falling back on weak or outdated methods.
No more tradeoffs between security and user experience.

You can offer your users fast, simple authentication that keeps them safe - every time they log in, make a payment, or need to recover their account.

Test It Out

See Keyless in action. Request a custom demo recording to your inbox and experience how continuous identity assurance can improve both security and user experience.

Identity Verification (IDV) Is Not Authentication: Why This Matters

12 June 2025

Identity Verification (IDV) Is Not Authentication: Why This Matters

12 June 2025

What is Identity Verification?

Identity Verification in Numbers

KYC, AML, and Their Link to Identity Verification

The Problem: KYC is Just the First Step

Identity Verification vs. Identity Authentication

How Most Apps Handle Authentication Today

Continuous Identity Assurance: The Missing Piece

Why Most Identity Verification (IDV) Solutions Fall Short

Enter Keyless: Continuous Identity Assurance That Doesn’t Stop at Onboarding

Test It Out

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