Lithuania-based identity verification company iDenfy has incorporated SMS and email validation tools into its Know Your Customer (KYC) service. This update intends to broaden the company’s user authentication methods and enhance fraud prevention measures.

In the new system, users must provide a phone number or an email address and then confirm this information by entering a one-time code sent from iDenfy before proceeding with full ID verification using official documents. The dual-step process is intended to prevent unauthorized access to high-risk services such as online payment platforms and cryptocurrency exchanges.

Enhancing Fraud Prevention During Onboarding

This additional layer of authentication helps catch potential issues like invalid contact information, duplicate entries, or attempts to establish multiple accounts. iDenfy’s system can immediately identify suspicious activity through its dashboard, alerting clients before proceeding with more thorough ID verification.

According to company representatives, several financial and digital sector clients have requested simpler authentication solutions that do not interfere with the overall KYC process. The new approach is described as an ‘early checkpoint’ designed to filter out unverified users and minimize the risk of fake profiles within a system.

While complementing traditional ID checks, these new tools offer an extra safeguard against fraud, including account takeovers and synthetic identity creation. They integrate seamlessly with iDenfy’s existing suite of identity management technologies, which encompass document verification, biometric checks, and risk assessment.

Data from the US Federal Trade Commission highlights that consumer losses due to fraud exceeded USD 12.5 billion in 2024, marking a 25% increase compared to the previous year. Many of these cases involved unverified or false contact details, emphasizing the critical role of early data validation in combating financial crime.