The True Cost of Manual Identity Verification

Otem
4 min readFeb 1, 2021

Identity verification has been dominated by manual processes for a long-time. Checks would always be carried out physically involving sensitive paper and plastic documents. Such documents are likely to be duplicated for record-keeping purposes which poses several security risks such as the loss of sensitive data or more commonly theft. On average an individual would be required to present two documents mainly a government issued ID and a proof of address usually comprising of a bank statement. Both these items are crucial to unlocking access to public and private services. Common transactions that require this level of assurance include:

  • Flat/House renting
  • Opening a Bank Account
  • Pay Monthly Mobile Phone
  • Car Rental
  • Employment

Financial Cost

On average, over 1.6 billion transactions across the services listed above would require the presenting and checking of at least two identity documents. This raises the question, what is the true cost of manual identity verification?

It is difficult to establish the exact cost as the requirements vary from one industry to another. Some sectors require stringent checks thus extending the verification process whilst other sectors may be able satisfy their verification requirements on the basis of a few documents. In the case of accessing financial products such as creating a bank account, the manual cost of registration and verification on average is £30. An estimated 18 million transactions are recorded per annum in the creation of new bank accounts and other retail banking products. This manual processing can amount to over £550 million spent by organisations on identity verification. Where there are complex financial products in question requiring higher levels of assurance, the costs would be far greater.

The cost of fraud is yet to be accounted for in these costs where financial losses are incurred by both organisations and consumers. Online fraud is estimated at £8 billion per annum.

Labour Costs

Labour costs is a significant proportion of an organisation’s budget. Where labour is occupied in manual identity verification, it is not utilised to its maximum productive potential. This is especially the case where the human capital of labour far exceeds the skills and knowledge required to conduct repetitive manual identity verification. Labour can be reallocated towards other business priorities which maximises the overall output of the firm.

Cost of Abandonment

Abandonment by prospective leads is a major hindrance to new business acquisition. The time and resources required to manually verify a client can risk the client being lost to a competitor. Lengthy verification may be part of an enhanced due diligence process however this can lead to a delay in initiating transactions and thus causing abandonment. The modern consumer expects instantaneous results, secure single-on and seamless integration with their devices. The requirement of physically attending a location with paper and plastic documents to prove one’s identity is inconsistent with the new consumer behaviour. It is also incompatible with the current business environment in light of the COVID-19 pandemic.

The Role of Digital Identity Verification

Manual identity verification can be easily substituted with digital solutions that can perform these tasks quickly and securely with assurance. In an ever changing world, curbing the cost of identity verification lies in digital solutions such as Otem’s identity verification platform.

Otem allows businesses to verify the identity of staff and clients remotely and reliably, saving time, money and resources. Businesses can reduce the lead-time for onboarding and verify with accuracy and confidence.

Our solution is technology enabled and meets the highest standards of ID verification in the UK with application across the US, Canada, Australia and New Zealand. We want to change the way businesses verify identity by driving efficiency and most importantly placing trust and data security at the forefront of our solution.

Verify anyone from anywhere in the world
Verify using biometrics for the highest level of assurance
Verify over 4,000 documents from over 100 countries
Use our solution in multiple industries
Learn more at otem.co.uk

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Otem

Otem is a secure and fast digital identity verification solution for your business. Otem enables the identity verification of staff and clients remotely