NID & Identity verification software (eKYC) matters because businesses need to prevent fraud, gain customer trust, and provide a hassle free onboarding experience, while meeting the regulatory requirements, and enhancing security & accountability.

The Changing Landscape of NID Verification In Bangladesh

The termination of the former API did not remain an isolated legal or political event; it immediately translated into tangible economic consequences for businesses that had integrated the service into their operations.The EC’s decision to cancel the BCC’s access to the NID database had an immediate and severe effect on the digital business ecosystem. The recent history of NID verification is not just a story of business interruption in Bangladesh but also a cautionary tale about data security and the need for a robust, transparent legal framework.

The Transition to the Official NID Verification EC API

The Bangladesh Election Commission (EC) has issued a significant directive in May 2025 that mandates a standardized National Identity (NID) verification API for all public and private entities.The core of the new system is the mandatory adoption of a “Matched/Not Matched” API verification model. This design requires businesses to submit an NID information and receive a simple “True” or “False” response from EC’s end, which is a deliberate move to minimize data exposure and prevent leaks. This contrasts sharply with the previous system that relied on third-party intermediaries.

For businesses, access to the official API is not a public, open-market service. The process is a formal and direct one, requiring an application and a bilateral agreement with the government’s National Identity Registration Wing (NIDW). A confidential document titled “For API User – API Authentication Management” confirms a structured framework for authorized partners. This new approach has been solidified by the repeal of the National Identity Registration Act of 2023, which restored full NID authority to the EC in January 2025, enabling it to centralize control and enforce stricter policies.   

For citizens, the government has launched the NID Wallet mobile app, which uses facial biometrics for identity verification when claiming an account from the EC website. Its privacy policy explicitly states that “No data shared with third parties”.

Applications and Benefits Across Industries

The National Identity (NID) system is a foundational piece of Bangladesh’s digital infrastructure, with an approximate adoption rate of 120 million users. As a result, its verification APIs have become essential for a wide array of public and private services, from banking to telecommunications, and are crucial for fraud prevention.

Financial Services (Banking, Fintech, PSPs, Insuretech)

The financial sector has been a key driver in adopting NID verification in Bangladesh to enhance and automate its services. For banks, fintechs, and other financial institutions, the NID API is instrumental for real-time electronic Know Your Customer (e-KYC) processes, which significantly reduce the time and paperwork involved in opening accounts and approving loans.   

This not only improves the customer experience but also serves as a critical defense against fraud and forgery. The Bangladesh Financial Intelligence Unit (BFIU) has issued guidelines requiring financial institutions to use NID verification to combat money laundering and terrorist financing, aligning the country with international standards. 

Next-gen insuretech and fintech companies are leveraging advanced technologies to build on this foundation. Companies such Polygon Technology provides robust AI-powered eKYC with features like NID OCR (Optical Character recognition) to capture users NID information on a self serve model, plus facial recognition with selfie, and liveness detection to ensure the person applying for a service is a real, living individual and not a fraudster using a fake document. These technologies allow for instant verification and help businesses issue policies and onboard clients faster while meeting strict AML (Anti-Money Laundering) compliance standards by screening against watchlists.

Telecom & Mobile Money

Bangladesh’s telecom industry was an early adopter of NID verification in Bangladesh, making biometric SIM registration mandatory. Each NID can register up to 15 SIMs, helping curb fraud and support law enforcement.

The mobile financial services (MFS) sector has also grown by leveraging EC’s NID verification APIs to make transactions more efficient and secure. Providers use NID-based verification for new customer onboarding.

Trading & Securities

For the trading and securities market, NID verification is a critical first step for compliance and investor trust. The NID card is a mandatory document for opening a Beneficiary Owner (BO) account, which is the foundational account for any investor to start trading. The verification of the NID ensures the legal identity of the investor, which is crucial for meeting regulatory obligations and AML compliance mandated by bodies like the Bangladesh Securities and Exchange Commission (BSEC).   

By using NID-based checks, brokerage firms can streamline the onboarding process and reduce the risk of money laundering and other financial crimes.

Startups & Digital Platforms

The NID system underpins trust in Bangladesh’s gig and digital platforms. Services like ride-sharing and home delivery use NID checks to verify users, keeping accounts dormant until verification is complete—balancing growth with security.

Government & Public Services

The NID system strengthens e-governance and fights corruption by enabling secure data exchange across government departments. It streamlines services like passports, birth registrations, and taxes, helping identify ghost employees and duplicate taxpayers, boosting efficiency and revenue.

Technological Advancements & Best Practices

OCR & Automated Data Capture

The NID system, particularly with the introduction of biometric and chip-embedded Smart NID cards, has enabled the use of advanced technologies to streamline identity verification. A core component of these next-generation e-KYC solutions is Optical Character Recognition (OCR) and automated data capture.   

This technology is critical because it directly addresses the challenges of manual data entry, which is often slow and prone to human error. When a user takes a photo of their NID card, AI-powered NID OCR technology can instantly and precisely extract information from both the front and back of the document, such as the NID number, name, and date of birth. This automated process by tech providers like Polygon Technology can handle both Bangla and English text, reducing the complexities associated with multi-language data capture.   

NID Face & Liveliness Verification

To enhance security and prevent fraudulent activities such as identity theft, modern e-KYC platforms combine NID verification with biometric technologies like facial recognition and liveliness detection. These technologies ensure that the person being onboarded is the genuine individual and not an impersonator using a photo, video, or mask.

The process typically involves a selfie-to-NID photo match, where the user takes a live selfie that is then compared against the photograph stored in the official NID database.

Another key component of the process of liveliness verification uses AI to ensure users are real and prevent spoofing with photos, videos, or 3D masks. Advanced solutions like Polygon eKYC & and even in Bangladesh  government’s NID Wallet app, utilizes advanced face detection—leveraging device cameras—providing a secure layer of user protection.

Secure “Matched/Not Matched” API Integration

Bangladesh Election Commission’s “Matched/Not Matched” API offers secure, binary identity verification by checking NID numbers, birth dates  and biometric data against the official database. It ensures compliance with the Election Commission, protects citizen privacy, reduces data disputes, and streamlines e-KYC for businesses by returning only a simple True/False response.

Data Security & Governance

Following the 2023 breach exposing 50 million NID records, robust data security has become critical in Bangladesh’s digital ecosystem. Startups and fintechs handling sensitive NID data must adopt strict security measures beyond simple API integration.

On-Premise Hosting, Encryption & Access Control

Businesses can maintain control over data through on-premise hosting, including government-managed facilities like the National Data Center (NDC). All data must be encrypted at rest and in transit, following OWASP and ISO/IEC 27001 standards. Role-Based Access Control (RBAC), multi-factor authentication (MFA), IP whitelisting, and strong API security are essential to prevent unauthorized access.

Critical for Startups Handling Sensitive Data

For startups, data security builds trust and ensures compliance with Bangladesh’s Digital Security Act (2018) and ICT Act (2006). Comprehensive audit logs, encrypted and standardized, help monitor access, detect anomalies, and meet regulatory requirements—making proactive governance essential for survival and credibility.

Opportunities & Future Outlook

The Bangladesh National ID (NID) system stands at a critical juncture, having overcome significant hurdles related to governance and security. As the Election Commission (EC) reasserts its authority and mandates a more secure API model, a new wave of opportunities is emerging, driving cross-industry adoption, fostering digital trust, and paving the way for a more mature regulatory landscape.

Cross-Industry Adoption

While early adoption was concentrated in banking and mobile money, now NID based identity verification is now a critical business enabler across a wider range of sectors.

Financial Services: Beyond traditional KYC, fintech and insuretech platforms use NID verification with facial recognition and AML screening to onboard customers faster, securely, and fraud-free.

Securities & Trading: NID & identity verification is mandatory for opening BO accounts on the Dhaka & Stock Exchange, ensuring legal compliance and reducing money laundering risks.

Gig Platforms & Logistics: Platforms connecting drivers, tutors, or freelancers rely on NID verification to build trust and safety, boosting credibility with users.

Government & Public Services: NID integration in e-governance streamlines services like subsidies, utilities, and passports, enabling faster and more transparent delivery.

Financial Inclusion & Digital Trust

The widespread adoption of NID-based verification plays a direct role in advancing financial inclusion and building digital trust.

Simplified Onboarding: Digital onboarding solutions, powered by the NID API, are reducing barriers to entry for millions of unbanked citizens, particularly in rural populations.  

Building Trust: NID verification in Bangladesh fosters a new level of confidence between service providers and consumers in a wide variety of sectors. This is particularly important for new platforms where trust is paramount. By providing a secure and reliable way to confirm identity, the NID system enables businesses to mitigate fraud and build credibility with their users.