Digital identification: how it works and its advantages


Online transactions requiring the identification of a person are commonplace in the day-to-day operations of any business. Digital identification has become essential for organizations to transform digitally and compete on a fair basis. This article will explain what digital ID is, how it works, the benefits it brings and the sectors that use it the most.

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

What is a digital ID?

The analog way of identification consists of physically identifying a person by means of their ID card, i.e. the person’s face is compared to the photo on the ID card. Digital ID allows this process to be done digitally, to know who is on the other side of the computer and to verify who they are, who they claim to be.

The eIDAS regulation gives the following definitions:

  • “Electronic identification” means the process of using the identification data of a person in electronic form that uniquely represents a natural or legal person or a natural person representing a legal person.
  • person identification data, a set of data making it possible to establish the identification of a natural or legal person, or of a natural person representing a legal person;

Within companies, the customer identification process is known as KYC (Know Your Customer) and involves performing a series of steps to know the user and secure transactions. This KYC process can be done digitally, which we will see in the next section.

How does digital identification work?

The stages of digital video identification processes are as follows.

  • The customer connects to the company online by video and shows both sides of his identity card.

  • The customer then takes a selfie and a biometric analysis of the selfie is performed against the ID photo.

  • After that, the system provides a result on the validity of the identification.

  • The system also collects the following information:

  • Video of all digital identification processes.

  • Result of validation, whether positive or negative.

  • Front and back of the identity document.

  • User selfie during videoconference.

  • Start and end date and time of the video.

  • Geolocation of the user.

  • 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 identity cards
  • EKYC documents. Identity documents such as identity cards, passports or driving licenses are validated.
  • eKYC photo. A complement to the previous one which adds identity validation with facial recognition
  • EKYC integration. An end-to-end solution facilitating an efficient process and providing additional security with video validation and electronic signature.

Which industries use digital ID the most?

Digital ID can be used by businesses in any industry doing online transactions that require user identification. 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.

  • Citizen identification also plays a key role in accessing many procedures in public entities, such as filing taxes, applying for assistance, and dealing with Social Security or the Tax Agency.

  • Insurance sector. Insurance companies can also use the digital ID to purchase policies, renewals or deposits.

  • Real estate sector. In the real estate sector, there are transactions where it is essential to identify the persons concerned: sales and purchases, rentals, purchase options, sales contracts, etc.

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

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

  • Increase your customer base.

  • Increased conversions.

  • Cost reduction.

  • Increased efficiency.
  • Less time spent on transactions.

  • Improved security.

In summary, we at are convinced that digital identity is essential to facilitate procedures and offer simple solutions to customers.

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Lleidanetworks Serveis Telematics SA published this content on 01 October 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on 01 October 2021 10:51:11 AM UTC.


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