Identity Proofing Explained

What is identity proofing, and why is it important? In an increasingly digital world, secure and reliable methods of establishing identities are crucial for privacy and security. Identity proofing is the process of collecting and analyzing data to confirm a person’s claimed identity, ensuring they are who they claim to be. This is essential for preventing fraudulent activities such as opening unauthorized accounts or gaining access to restricted services.

Leading identity proofing service providers like PXL Vision are transforming this process with advanced technologies such as AI-driven data analysis, biometric authentication, and document validation. These innovations enhance the accuracy and efficiency of establishing trust in a person’s identity. In this article, we will further explore the definition of identity proofing, its importance, and how cutting-edge solutions are redefining digital trust.

What Is Identity Proofing?

Identity proofing is the process of collecting and analyzing data to confirm an individual’s claimed identity, ensuring they are who they claim to be. According to the National Institute of Standards and Technology (NIST) in its Digital Identity Guidelines, a claimed identity refers to the data a user provides when registering with an Identity and Access Management (IAM) system, in other words, who they claim to be. In contrast, an actual identity consists of verified data that proves a user’s identity and confirms who they actually are.

The identity proofing process involves gathering, validating, and analyzing personal information to determine the legitimacy of an identity claim. This can include identity document verification, biometric analysis (e.g., facial recognition), or knowledge-based authentication. Organizations can perform digital identity proofing through remote identity proofing solutions, in-person checks, or hybrid models that combine both.

Identity proofing is essential for preventing fraud, enhancing security, and ensuring compliance with regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML). It plays a crucial role in protecting access to sensitive information and establishing trust in both physical and digital environments. Additionally, making a clear distinction between identity proofing and identity verification is essential; while identity proofing verifies the legitimacy of an identity claim, identity verification confirms the authenticity of the provided documents and data.

Identity proofing is important or required in a diverse range of applications. For example, with the rise of digital transactions and other internet-based activities, Qualified Electronic Signatures (QES) must also rely on a robust identity proofing solution to ensure that signers’ identities are securely established before legally binding agreements are made.

What is digital identity proofing?

Digital identity proofing is one of the cornerstones of trust in an online world. It verifies a person’s claimed identity using advanced technologies, thereby eliminating the need for in-person interactions. By analyzing government-issued documents, biometrics, and personal data, identity proofing seamlessly and securely ensures individuals are who they claim to be.

One of the most transformative advancements in this field is remote identity proofing, which allows users to verify their identity anytime, anywhere. AI-powered document verification, biometric scanning, live selfies, and video authentication work together to create a secure, frictionless experience.

As digital transactions and online services grow, remote identity proofing plays a vital role in safeguarding sensitive interactions, preventing fraud, and ensuring compliance with industry regulations. From opening a bank account to signing legally binding agreements with Qualified Electronic Signatures (QES), identity proofing strengthens security while keeping the user experience smooth and hassle-free.

How Identity Proofing Works

Identity proofing is the process of confirming that an individual’s claimed identity is legitimate by collecting and analyzing relevant data. To securely perform this process, companies and institutions use a variety of tools, technologies, and methods. According to the National Institute of Standards and Technology (NIST), identity proofing consists of three key steps:

• Resolution: This step involves collecting and distinguishing identity attributes, such as an individual’s name, date of birth, and government-issued ID. The goal is to ensure that these attributes uniquely identify a person and differentiate them from others.
• Validation: Validation confirms the authenticity of the provided identity attributes. This step ensures the accuracy and reliability of the data by cross-referencing it with authoritative sources, such as government databases or financial institutions.
• Verification: The final step ensures that the person presenting the identity is the same individual associated with the resolved and validated attributes. This is typically done through methods such as biometric comparison (e.g., live selfies or fingerprint scans) or dynamic verification techniques.

Together, these three steps form the foundation of identity proofing, establishing trust in an individual’s identity. Unlike identity verification, which focuses on confirming the authenticity of presented documents and credentials, identity proofing evaluates the legitimacy of an identity claim.

Examples of Identity Proofing

The following identity proofing examples demonstrate the range of tools and techniques used to securely and accurately establish an individual’s identity in various scenarios.

• Biometric Verification: This method uses unique physical or behavioral characteristics, such as fingerprints, facial recognition, iris scans, and voice patterns, to confirm an individual’s identity. Since these traits are difficult to forge, biometrics provide a highly secure and reliable form of identity proofing.
  
  
• Liveness Detection: This ensures that the biometric data being provided, such as a face scan or fingerprint, comes from a live person rather than a photo, video, or spoofing attempt. Some systems require users to blink, smile, or turn their head during verification to confirm their physical presence.
  
  
• Identity Document Verification: This process examines official identification documents, such as passports, driver’s licenses, or national ID cards, to detect fraud. Advanced tools analyze features like holograms, watermarks, and MRZ (Machine-Readable Zone) codes to confirm authenticity and detect tampering.
  
  
• Personally Identifiable Information (PII) Validation: PII includes sensitive data like a person’s name, date of birth, address, or Social Security number. Identity proofing cross-checks this information against authoritative sources, such as government databases or credit bureaus, to validate its accuracy and legitimacy.
  
  
• Trusted Identity Networks: These platforms allow users to share pre-verified identity information across multiple services. Someone who has already undergone identity proofing with one trusted provider can reuse that verification to access another service, reducing the need for repeated proofing processes.
  
  
• Out-of-Band Proofing: This method uses a separate communication channel to verify identity, adding an extra layer of security. For example, a system might send a verification code to a user’s phone or email, requiring them to confirm their identity on a secondary platform.
  
  
• Knowledge-Based Authentication (KBA): Users answer security questions based on their personal history, such as past addresses or account transactions. While once a common identity proofing method, KBA is becoming less reliable due to the risk of data breaches and social engineering attacks.
  
  
• One-Time Passcode (OTP) Verification: A time-sensitive passcode is sent to a user’s registered phone number or email. By entering this code, the user proves they have access to the associated account or device, helping to confirm their identity in a secure manner.
  
  

Which Sectors Require Identity Proofing?

Identity proofing is critical across many industries to ensure security, compliance and trust in digital and physical interactions. It plays a crucial role in the context of Qualified Electronic Signatures (QES), as these signatures require strong identity proofing to establish the verified identity of the signer and meet the highest legal and regulatory standards for digital agreements. QES are important wherever a person makes a legally binding commitment, such as a contract or agreement:

In finance, identity proofing supports regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML) by establishing the legitimacy of an individual’s identity before allowing them to open accounts or conduct financial transactions.

Healthcare relies on identity proofing to protect patient data and control access to medical records, ensuring that only authorized individuals can view or modify sensitive health information. Governments implement identity proofing for secure voter registration, tax filing, and digital identity programs, reducing the risk of fraud in public services.

Similarly, industries such as real estate and legal services also rely on identity proofing for contract verification and high-value transactions, ensuring that only verified individuals engage in legally binding agreements

Why is Identity Proofing Important?

Identity proofing serves as the foundation of secure and trusted interactions by ensuring that individuals are accurately identified before accessing sensitive systems, data, or services. It protects businesses from fraud, supports regulatory compliance, and safeguards users’ personal and financial information in an increasingly digital world.

With the rise of identity fraud, digital identity proofing has become an essential safeguard in today’s digital landscape. According to a 2024 report by Sumsub, identity fraud impacted 45% of companies and 44% of end users globally, with Europe experiencing a staggering 150% year-over-year increase.

In 2023, identity fraud cost Americans $43 billion, affecting approximately 40 million individuals. Globally, fraud rates more than doubled from 2021 to 2024, with deepfake-related fraud surging to 7% of all cases. Projections indicate that by 2025, global identity fraud losses will exceed $50 billion, underscoring the urgent need for stronger security measures.

A robust identity proofing process is crucial in mitigating financial losses and securing sensitive data. Remote identity proofing solutions, which leverage AI-powered document verification, biometric authentication, and liveness detection, help prevent fraudulent access to financial accounts, government services, and secure platforms. Furthermore, identity proofing is indispensable for Qualified Electronic Signatures (QES), ensuring that legally binding digital agreements meet the highest standards of security and compliance.

As fraud tactics evolve, identity proofing vs. authentication becomes a key distinction—while authentication verifies access credentials, identity proofing establishes trust from the start by confirming an individual’s legitimacy. Businesses, financial institutions, and governments must prioritize strong identity proofing to protect users, prevent fraud, and maintain regulatory compliance in an increasingly digital world.

How Identity Proofing Benefits the Customer

Identity proofing enhances security, convenience, and trust, ensuring that customers can interact with organizations safely and seamlessly. Most importantly, it protects personal information, reducing the risk of identity theft and fraud. By accurately verifying identities, customers can securely access sensitive services such as online banking, healthcare portals, and government platforms without fear of unauthorized access.

In addition, digital identity proofing streamlines onboarding, allowing users to complete verification remotely through biometric scans, AI-powered document checks, and secure data analysis. This ensures a smooth and hassle-free experience while maintaining the highest level of security.

A key application of identity proofing is in Qualified Electronic Signatures (QES), where strong identity proofing is required to verify signers before they can legally bind agreements. QES ensures that digital transactions meet strict security and compliance standards, giving customers confidence in the integrity of their digital interactions.

Ultimately, identity proofing provides customers with peace of mind, knowing their information, accounts, and legally binding agreements are protected by a trusted organization.

PXL Vision: Your Identity Proofing Expert

Identity proofing is a critical process that requires advanced solutions grounded in cybersecurity expertise and regulatory compliance. Our product PXL Ident for QES offers certified identity proofing that leverages advanced AI and machine learning technologies to provide secure, efficient, and user-friendly identity proofing for qualified electronics signatures.

Designed for industries such as finance, telecommunications, government, and others, PXL Vision provides remote identity proofing that adheres to international compliance standards, making it a leader in secure digital identity solutions.  

Want to learn more? Contact us today and discover how our cutting-edge technology can enhance security and seamlessly integrate into your organization.

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