Digital identification: how it works and its benefits

Online transactions requiring a person to be identified are commonplace in the day-to-day operations of any company. Digital identification has become essential for organisations to transform digitally and to compete fairly. This post will tell you what digital identification is, how it works, what advantages it brings, and which sectors use it the most.

There is no doubt that the outbreak of the coronavirus pandemic has sped up the digital transformation of companies and has also increased the risk of identity theft fraud. The Internet provides a wide range of services, such as travel or financial services, and in each of them, it is necessary to have the identity of the person sitting behind each computer. Thus, digital identification has become a handy tool to prevent fraud and provide confidence to customers.

What is a digital Identification?

The analogical way of identification is to identify a person by means of their ID card physically, i.e. the person’s face is compared with the photo on the ID card. Digital identification makes it possible to digitally perform this process, know who is on the other side of the computer, and verify who they are, who they claim to be.

The eIDAS Regulation provides the following definitions:

  • “electronic identification” means the process of using a person’s identification data in electronic form that uniquely represents a natural or legal person or a natural person representing a legal person.
  • person identification data means a set of data enabling the identification of a natural or legal person, or a natural person representing a legal person to be established;

Within companies, the customer identification process is known as KYC (Know Your Customer) and implies carrying out a series of steps to get to know the user and provide security in transactions. This KYC process can be carried out digitally, which we will see in the next section.

How does digital ID work?

The steps involved in the digital video identification process are as follows.

  • The client connects online via video to the company and shows both sides of their ID card.
  • The client then takes a selfie-and a biometric analysis of the selfie is carried out against the ID photo.
  • After that, the system provides a result on the validity of the identification.
  • The system also collects the following information:
  • The video of all the digital identification processes.
  • Result of the validation, either positive or negative.
  • Front and the back of the ID.
  • User’s selfie during the video conference.
  • Date and time of the video start and end.
  • User’s geolocation.
  • Technical details of the validation process.’s eKYC solution is enhanced by other tools such as the following:

  • eKYC OCR. A technology that converts images extracted from ID cards
  • eKYC Docs. Identity documents such as ID cards, passports or driving licences are validated.
  • eKYC photo. A complement to the previous one that adds identity validation with facial recognition
  • eKYC Onboarding. An end-to-end solution facilitating an efficient process and providing additional security with video validation and electronic signature.

What sectors use digital identification the most?

Digital identification may be used by businesses in any sector carrying out online transactions that require users to be identified. Currently, many companies use this type of identification, and the following sectors stand out:

  • Financial sector.
  • Banks and Fintech companies use digital identification to make investments or contract financial products (bank accounts, cards, mortgages or loans, among others).
  • Public services.
  • Public services.
  • Citizens’ identification also plays a key role in accessing many procedures in public entities, such as filing taxes, applying for aid, and dealing with the Social Security or the Tax Agency.
  • Insurance sector. Insurance companies can also use digital identification for contracting policies, renewals, or filings.
  • Real estate sector. In the real estate sector, there are transactions where identifying the persons involved is essential: sales and purchases, rentals, purchase options, contracts of sale, etc.

What are the benefits of digital identification for businesses? How can banks benefit from electronic signatures?

Digital identification brings many benefits to businesses, such as the following:

  • Increasing your customer base.
  • Increasing conversions.
  • Cost reduction.
  • Increased efficiency.
  • Less time spent on transactions.
  • Improved security.

In summary, we at are confident that digital identity is essential for facilitating procedures and offering simple solutions to customers.

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