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Cloud vs. On-Premises Identity Verification: Knowing the Best Approach to Secure Authentication & Compliance

Author: admin | 01 Apr 2024

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The Identity Verification industry has transitioned into a new era where rapid digitization and process automation are the top trends in providing a seamless identity verification solution to different sectors. Recent statistics from Fairfield research report forecast a global identity verification market size expansion up to 29.7 billion USD by 2030 where segmentation by deployment includes both Cloud and On-premises identity verification solutions.

In this blog we will explain the difference between Cloud vs. On-Premises Identity Verification and which one should be implemented pertinent to the identification and authentication requirements.

Key Takeaways

Cloud-based and On-premises identity solutions differ in terms of their data storage infrastructure and identification connectivity.
Cloud vs. On-premises IDV solutions need to comply with the regulatory standards of the relevant industries to operate
Facial biometric identity verification solutions can be implemented successfully and efficiently in both cloud vs. on-premises identity solutions.

Cloud Identity Verification

A Cloud Identity Verification solution leverages cloud computing technology to fortify the KYC identity verification process. This is done digitally for transactions and digital identities to fortify a user’s security. Cloud computing technology typically integrates biometric identity verification (facial recognition), KYC Document Verification, and behavioral analysis to complete the IDV cycle for authenticating users connected remotely or onsite.

On-Premises Identity Verification

The identity verification system deployed in the physical infrastructure of an organization is known as an On-Premises Identity verification solution. It is operated and managed internally without relying on external cloud systems. On-premises identification systems include biometric scanning devices, internally managed databases, and the team’s presence in the organization.

Cloud vs. On-Premises Identity Verification – A Brief Comparative Analysis

Cloud-Based Identity Solution

On-Premises Identity Solution

Scalability

Organizations using cloud computing for identity verification can easily accommodate fluctuating user volumes and transactions.

Sovereignty & Control over Data

On-premises identity systems offer the organizations full control over the data and information of users, organization members, and other persons who require identification. This ensures compliance with data protection and data privacy regulations.

Cost Effective

Cloud Solutions for Identity Verification offers a ‘pay-as-you-go’ model to the organizations facilitating them by reducing the need to purchase hardware and maintenance costs. Organizations can scale to their existing needs and operate their IDV with optimization.

Highly Secure

On-premises solutions offer a high level of security to user’s digital and physical data. An organization with stringent identification and authentication protocols ensures the protection of sensitive user data through an On-premises IDV solution.

Accessibility & Reach

Cloud-based Identification helps in seamless customer onboarding and identification of users remotely from anywhere. It can be accessed and managed from remote locations globally, helping organizations bring multi-national benefits.

Highly Reliable

The performance of on-premises identity solutions is predictable and promising due to the dedicated hardware and team allocated. It also offers high reliability for sensitive transactions and is critical for delayed responses.

Fast Deployment

Cloud solutions are fast-paced due to minimal use of hardware and setup. They require less time to become active for use and are always available.

Integration Capability

On-premises solutions for identity verification can be easily integrated with existing systems and organizations can enjoy smooth transition and upgradation between old and new systems.

Key Components of Cloud vs. On-premise Identity Verification Solutions

Industry-Wise Preference

Both cloud-based and on-premises identity systems have their implications and use cases. Different industries prefer either of them based on their infrastructure, company sizes, and regulatory requirements.

Industries Requiring Cloud-Based Identity Verification

E-Commerce and Retail	E-commerce platforms are trending and they require scalable and fast-paced identity verification for seamless customer onboarding. Cloud-based solutions suffice the need for remote KYC in e-commerce platforms.
Banking and Fintech	Banks and Financial Institutions are at the top of the list in having the requirement of a KYC solution at the very core of their operations. Customer identification and authentication for bank account opening now requires remote and fast onboarding procedures to help build long-term customer relationships.
SaaS Technology Firms	Software as a Solution (SaaS) providers opt for cloud-based IDV solutions to minimize the use of hardware and cost incurred and to streamline their digital solutions in which user onboarding can be made seamless, easy, and quick.
Gig Economy & Sharing Platforms	Ride-sharing services like Uber & Careem, Food delivery companies like Uber Eats, and Freelancing platforms like Upwork offer services remotely. They require secure and seamless client onboarding through efficient identity verification alongside flexibility.
Healthcare & Medical Sector	Healthcare providers are focusing on digital platforms for patient health management and telehealth services.

Industries that work fine with On-Premises IDV Solutions

Government & Defense Sector	National security and governmental organizations that work off the record require on-premises verification and authentication the most. They maintain strict identity checks to ensure data sovereignty and security. Mostly facial biometrics with high-end verification systems is implemented along with other security checks.
Manufacturing Industry	Manufacturing firms like food processing units, construction and design firms, and chemical producers, implement on-premises identity verification solutions to secure sensitive data and their operational procedures.
Regulatory Compliance & Legal Firms	Organizations that are obligated to follow regulatory compliance prefer on-premises identity verification solutions to ensure data privacy and protection.
Education & Research Institutions	Research institutions and educational setups require students and instructors to verify their identity through on-premises means to ensure that no outsider or a risky person is inside the premises.
Sensitive & Critical Infrastructure	Nuclear power plants, Pharmaceutical manufacturing setups, and other data-sensitive infrastructures require on-premises identity verification.

Facia can work efficiently in both cloud-based and on-premises infrastructures for onboarding and verification needs. Facia’s highest speed in verifying identity within under one second is a standout benefit that businesses can have while implementing their identity verification. Facia offers a wide array of identity verification services that cover all aspects of facial biometric verification in both 1:1 and 1:N verification according to the standards of NIST. Furthermore, Facia recently reached another milestone which is the certification from iBeta Level 2 compliant with ISO 30107-3 standard for biometric facial recognition.

Conclusion

Both cloud-based and on-premises identity solutions are important and implemented as per their industry-relevant requirements. Few companies use both cloud and on-premises solutions to strengthen identification measures. Businesses should prefer the fastest identity verification solutions that can also ensure the lowest false rejection rate (FRR) and false acceptance rate (FAR) in facial biometric verification. In this way, the digital identities of genuine costumes shall be protected, and risky profiles, financial criminals, and identity theft attempts can be prevented.

Frequently Asked Questions

What is an on-premise solution?

On-premises solution means the solutions and systems that are implemented in an organization within its physical boundaries and infrastructure.

What is a cloud vs On-premise solution?

Cloud vs. On-premises solution refers to 2 systems: 1) cloud-based systems and solutions that offer remote access, data sharing, and connectivity between multiple setups of an organization or beyond.

What is on-premises Identity Verification?

On-premises identity verification is the means of verifying human identities within an organization’s physical infrastructure that has all identity data and information managed internally.

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