Unlocking the Power of Human-in-the-Loop Technology: A Paradigm Shift in Manual Verification

many industries, offering efficiency and optimization in various processes like remote onboarding and client verification. While the allure of full automation is undeniable, there exist scenarios where its implementation faces challenges due to regulatory constraints or the specific nature of an industry. In such contexts, entrusting complete autonomy to AI systems can be daunting due to the inherent risks involved. This is where the concept of human-in-the-loop emerges as a crucial framework, providing a balance between technological innovation and human oversight.

In data preparation and AI training, the term Human-in-the-Loop (HITL) has garnered significant attention. But what if we extend this concept beyond machine learning and apply it to manual verification processes? Imagine a world where human expertise synergizes with technology to tackle complex and high-transaction-value verification tasks with precision and efficiency.

Welcome to the era of HITL IDV technology revolutionizing manual verification.

Identity verification is the bedrock of modern society, underpinning everything from financial transactions to healthcare services. With the advent of remote onboarding, this process has undergone a revolution, offering unparalleled convenience and accessibility to users worldwide.

HITL: Elevating Manual Verification

PwC reports that 76% of organizations have transitioned to automation in response to Covid-19 and the increased prevalence of remote work. This shift has yielded notable advantages in terms of efficiency, time saving and cost reduction. While embracing automation presents clear business-boosting benefits, achieving full implementation , due to regulations, or specificity of an issue, can pose challenges and may not always be the optimal solution.

While high-risk/high-transaction-value processes demand the sophistication of HITL technology, low-risk/low-transaction-value processes present a different narrative. Here, automated systems may suffice, offering cost-effective solutions without compromising accuracy.

Let's explore some examples of high-transaction x value cases:

1. Financial Transactions in High-Stakes Markets: In trading or high-value financial transactions, the stakes are high, so having an extra pillar of safety for low confidence cases, AI reverts to human expertise to scrutinize process and minimize the possible error,detect anomalies, and mitigate risks effectively. ‍
2. Healthcare Identity Verification and Onboarding: Healthcare regulations often require stringent identity verification processes. Risk of fraud and significant impact on individual health outcomes are real challenges that arise in this industry. Human-in-the-loop (HITL) plays a crucial role in healthcare onboarding customers. A great example of HITL is Video Know Your Customer (KYC) processes, which ensures a personalized epxerience for a customer and an efficient process for a business. As a testament to high-performing and demanding product that is Human-in-the-Loop, Identomat introduced Video KYC and teamed up with Georgia's public registry. Out of 265 services provided by the registry, 185 (and counting) are fully digitally accessible.‍
3. Legal Compliance and Regulatory Oversight: In industries such as banking compliance is non-negotiable. HITL identifies compliance gaps, and implementscorrective measures. Human reviewers leverage their legal expertise and industry knowledge to navigate complex regulatory frameworks, safeguarding organizations against legal risks and reputational damage
4. Corporate Mergers and Acquisitions: Extremely high value financial transactions and significant legal implications. Cybersecurity breaches in corporate mergers and acquisitions can result in various detrimental outcomes, including business disruptions, the compromise of critical data and information, financial setbacks, diminished brand value, reputational damage, and a decline in customer trust. The expenses associated with managing such incidents are substantial. Indeed, instances of fraud litigation following mergers and acquisitions have become increasingly prevalent. Identity verification is crucial to ensure that all parties involved are legally authorized to conduct the transaction and that the identities of key stakeholders are accurately represented.
5. High-Value Transactions: Large sums of money changing hands, such as in real estate or major investments are posed with risks, understandably so. According to a report by the FBI’s IC3 cybercrime unit, victims in the U.S. lost more than $213 million in 2020 because of fraud involving real estate investments or rental or timeshare properties. In these contexts, Identity verification is essential to prevent fraud, ensure compliance with regulations, and safeguard against money laundering.
6. Issuance of Passports and Visas: High security and fraud risk, with substantial implications for national security. Countries with weaker security measures used in passports and other documents usually have higher rates of forged IDs. The price of issuing legal identity documents indirectly reflects this. According to William Russel, an international insurer, an Australian passport is the most expensive travel document in the world now—$230 per issue.Identity verification ensures that individuals applying for passports or visas are who they claim to be, preventing identity theft and unauthorized entry into countries.
7. Access to Restricted Areas: Military and governmental facilities require stringent security measures. Identity verification is critical to grant access only to authorized personnel, preventing security breaches and protecting sensitive information.
8. Uncollateralized Loan Approvals: Significant financial risk and potential for large financial losses. Detecting fraud at the initial stage of the onboarding process can significantly reduce operational expenses in the future. By identifying individuals attempting to exploit new account openings for unlawful purposes, considerable time and financial resources can be saved.
9. Immigration and Customs: It is high stakes in terms of security and immigration control. Airport Security is one of the most significant security challenges faced by countries around the world. Airports, as the most important access point, remain a hotspot for criminal activity with millions of travellers travelling throughout the day. Face recognition technology finds itself at the heart of airport security, with governments realising the incredible benefits of implementing an automated immigration system.
10. Art and High-value Auctions: Significant financial transactions and risk of fraud. From phone bidders to actual visitors of the auction and sellers - anyone could be partaking in some type of a fraud, causing substantial financial risk; identity verification is essential in verifying the authenticity of buyers and sellers, preventing art forgery, and ensuring the integrity of auctions.
11. Insurance Claims: High financial value and risk of fraudulent claims. Creating numerous online accounts using stolen identities has become progressively simpler. Fraudsters obtain batches of stolen or leaked IDs and utilize them to sign up for online insurance accounts, subsequently filing claims.Therefore, having a robust IDV solution, would help reduce such risks by 85-95%.
12. Adoption Processes: These involve high personal and legal stakes, particularly concerning child welfare. Identity verification ensures the suitability of adoptive parents and protects the interests of children.
13. Employment Eligibility: Particularly important for high-security or sensitive positions, identity verification ensures that individuals are qualified and trustworthy, safeguarding organizational integrity and security.
14. Legal Proceedings: Important for ensuring justice, though often not directly related to high transaction values. While not directly related to high transaction values, accurate identity verification is essential in legal proceedings to ensure fairness, protect individuals' rights, and uphold the integrity of the justice system.

This ranking takes into account both the direct financial implications and the broader risks associated with failure in accurate identity verification, which includes legal, security, and societal impacts.

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Embracing the Future of Manual Verification

The integration of HITL technology emerges as a game-changer.  Striking the right balance between AI-powered automation and human intervention is essential for organizations to elevate verification processes, mitigate risks, and drive operational excellence. Whether in high-risk financial markets or routine administrative tasks, HITL technology paves the way for a future where precision, efficiency, and human ingenuity converge.

Identomat has proven itself as a trusted partner in HITL technology. With its innovative solutions and unwavering commitment to excellence, the solution empowers organizations to achieve greater efficiency, security, and compliance in their verification processes. Identomat's HITL technology paves the way for a future where precision, efficiency, and human resourcefulness converge seamlessly.

To showcase the robustness of Identomat's AI powered end-to-end KYC platform and how it enables HITL workflows, below we created process flows for two common use cases:  1) Real-estate mortgage title closing and 2) Applying for loans online.

**Whether you're navigating high-risk financial transactions or streamlining routine administrative tasks, Identomat has the expertise and technology to meet your needs. Partner with Identomat today and unlock the full potential of HITL technology in your verification processes.