Verification Waterfall
Overview
A verification waterfall is a layered approach to identity verification in which multiple verification methods are applied sequentially until a customer’s identity is confirmed. If the first method fails or returns inconclusive results, the process “falls through” to the next verification step, such as moving from database checks to document verification or biometric authentication.This model ensures higher completion rates while balancing cost, accuracy, and user experience. For example, a fintech may first attempt database verification of a customer’s SSN; if unsuccessful, the system may request a government ID upload, and finally a biometric check.Verification waterfalls are commonly used in KYC, KYB, and AML compliance to minimize friction while meeting regulatory requirements. By structuring identity workflows this way, banks, payment providers, and digital platforms can improve onboarding efficiency and reduce drop-offs without compromising on fraud prevention.
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Related Terms
FAQ
What is a verification waterfall?
A process that runs multiple verification methods in sequence.
Why is it useful?
It improves success rates while controlling costs and fraud risk.
Where is it applied?
In digital onboarding, KYC, and cross-border verification.
What are compliance concerns?
Ensuring fallback methods still meet AML/KYC standards.