- The US government has issued over 450 million Social Security Numbers since its creation in 1936.
- SSN is a reliable method of identity verification because it is issued and managed by the US government.
- SSN verification is especially useful for banks and other financial institutions, and businesses engaged in gaming and gambling.
A Social Security Number (SSN) is a unique identifier given to citizens of the U.S. Think of the U.S. as a massive organisation, and every person’s SSN is like the number on their ID card. No two people can have the same SSN. The US government assigns around 5.5 million new SSNs annually. This has led the total number of SSNs to grow to 450 million since its inception in 1936. Now, since Social Security Numbers (SSNs) are issued by the government, they are considered the gold standard for identity verification in the U.S.
However, with growing digitization, traditional identity verification models are no longer necessary. The standards need to be kept up. Cybercrime has skyrocketed, and according to the US Department of State, in 2020 alone, the FBI estimated almost $4 billion lost to cybercrimes. With the increasingly complicated nature of fraud, advanced SSN verification solutions are becoming very necessary. And these can’t be just any solutions. The solutions need to be scalable, automated, and compliant with stringent regulatory frameworks. In this article, we will dive into the latest trends, challenges, and opportunities in SSN verification and introduce 10 tools that are redefining how companies ensure compliance and security.
💡 Related Blog: What Documents Confirm SSN?
What is SSN verification?
SSN verification cross-references user data provided to your business against the Social Security Association (SSA) database. The SSA also has other details like criminal history and political exposure about the person whose SSN is being verified. Verifying this data can help your business track your customer’s history and stay compliant with AML or CFT laws.
Importance of verifying SSN
Recently, with the change in AML and CFT rules, regulations have become more stringent and require businesses to be more vigilant. This means that your business could need to touch back on its identity verification standards. The following businesses need a robust SSN verification method the most:
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- Banking and Other Financial Institutions: These include credit unions, banks, insurance providers and distributors, and more. Using SSN verification is very important in these businesses as financial institutions attract strict AML regulations.
- Gaming Businesses: These businesses need to verify the ages of their customers as gambling and certain games have age restrictions, and failure to verify this information can attract serious legal repercussions against your business.
Through SSN verification, these businesses can authenticate the following information:
- Avoid and detect fraud: SSN verification helps make sure that your customers are using legitimate ID documents. Financial institutions use SSN verification before extending credit and accepting investments or deposits from customers.
- Age verification: Verifying the SSN of the customers allows a business to know the age of its customers, which is especially important for financial institutions, casinos, and gaming businesses, that need to stop the entry of minors. Banks and other financial institutions may also verify their customers’ age when extending credit.
- Reducing risks: With the use of SSN verification, your business can check the history of the customers that it interacts with. Banks and financial institutions can use SSN verification to avoid bad debts or take the steps necessary for a Politically Exposed Person.
There remains one issue though, identity fraud. Now companies must verify not only the validity of SSN but also conduct checks on the person presenting it. This is why cross-referencing various data points, like the customer’s criminal history, credit reports, and other important details— is an essential step in reducing the risk of fraud and ensuring the safety of financial transactions.
Tools to verify SSN
SSN lookup and verification can be done through the SSA website, where you can manually apply to the platform to retrieve a person’s SSN information. However, this process cannot be integrated into a business’s operations, therefore there is no scope for automated verification. This can end up costing you and your business time, and can also introduce the risk of errors.
The solution to this problem is easy, though. Professional third-party service providers can make the verification process streamlined. Not only can these professionals streamline the SSN verification process, but they can also help you plug the verification screen into various steps of your customer onboarding process and other interactions.
Customer experience is an important aspect of this process, where a difficult-to-navigate UI can cause customers to drop off right during their first interaction with your business. This is why Signzy’s SSN verification API ensures that your business loses no clients while security also stays robust.
Check out our API marketplace for more ways our platform can help your business grow. Apart from Signzy, here are a few other SSN verification tools available for your business:
- ID.me: A versatile platform trusted by government agencies, providing secure multi-layered identity verification.
- Veriff: This tool focuses on scalability, making it a great option for companies dealing with high volumes of verifications.
- Socure: Known for predictive analytics, Socure helps businesses detect and prevent fraud before it even occurs.
- Trulioo: This platform is ideal for global enterprises, offering identity verification across multiple countries.
- LexisNexis Risk Solutions: A reliable name for companies looking to meet stringent compliance standards.
- IDology: Provides flexible verification solutions with an emphasis on fraud prevention.
- Experian SSN Verification: Leverages credit data to deliver deeper insights along with SSN checks.
- KYC-Chain: Uses blockchain technology to enhance transparency in identity verification.
- Onfido: Employs machine learning to streamline identity checks, ensuring smooth onboarding across industries.
Conclusion
SSN verification is an important part of a business KYC process. However, using the SSA platform for this process is not the most efficient way. Integrating a third-party provider’s services can help streamline the SSN verification process while reducing the instances of errors.
SSN verification is not the be-all and end-all of identity verification, though. It only covers one of the aspects of a multi-faceted process. Read our other blogs to learn more about these other aspects.
Frequently Asked Questions
How does SSN Verification work in banking and financial institutions?
SSN verification helps banks and other financial institutions remain compliant with AML rules. It helps in reducing fraud and other crimes that could cause legal troubles for the business.
Is the SSN data publicly accessible?
No. The data associated with your customer’s SSN is not publicly accessible. The data from the SSA that is used for verification is machine-readable, so your customer’s privacy is not affected.
Is SSN verification reliable?
SSN verification uses data from the SSA, which is a government agency ensuring the reliability of the data available. However, SSN alone does not a robust verification process make. You need to add other methods of identity verification to your processes to improve the security of your business.
