In the fast-paced digital world, identity verification has become a critical aspect of business operations. As technology advances, so do the methods used by fraudsters to exploit vulnerabilities in identity verification processes.
To stay ahead of these threats, businesses must be aware of the top trends in identity verification for 2023. In this article, we will explore the emerging trends that will shape the industry and provide insights into how businesses can enhance their identity verification practices.
Trend #1: Enhanced Verification Process and Increased Friction for Customers
Identity fraud and scams have been on the rise, costing billions of dollars and affecting millions of people. To combat these threats, businesses are implementing more robust verification processes that involve multiple steps and increase friction for customers.
Multi-factor authentication, including biometric checks, SMS verification, and recent transaction checks, is becoming more prevalent. While these additional steps may slow down the onboarding process, customers are increasingly willing to tolerate them in exchange for enhanced security.
Trend #2: Liveness Checks as a Necessity
As the number of online transactions grows, it becomes crucial to verify the authenticity of submitted ID documents. Liveness checks, which determine if a real person is present and not a passive fake or a deepfake, are now a must.
These checks ensure that the person behind the document is physically present and prevent fraudsters from using manipulated images or recordings. Businesses need to implement comprehensive liveness check technologies to maintain the integrity of their identity verification processes.
Trend #3: Rise in Amateur Scam Attempts
Advancements in technology, such as AI, ML, and advanced printing, have made it easier for individuals to attempt fraudulent activities. This has led to a rise in amateur scam attempts, as more people believe they can cheat the system using readily available tools.
However, most of these attempts are easily detectable by experts, as they lack the sophistication required for successful fraud. While businesses need to remain vigilant, the majority of fraud attempts are still basic and can be easily identified.
Trend #4: Focus on Digital Hygiene
As more data is transmitted over the internet, the risk of data leaks and cyber attacks increases. Businesses and individuals need to prioritize digital hygiene to protect sensitive information. This includes minimizing the amount of personal data shared, understanding how data is used and protected by service providers, and advocating for stronger data protection regulations.
By practicing good digital hygiene, businesses and individuals can strengthen their digital immune system and reduce the risk of identity fraud.
Trend #5: Realistic Biometrics-Related Fraud
Biometric technologies, such as facial recognition, are becoming more prevalent in identity verification processes. However, fraudsters are also finding ways to exploit these technologies. With the abundance of facial data available online, fraudsters can create realistic models and simulations to impersonate individuals during identity verification.
Businesses need to stay ahead of these threats by continuously improving their biometric technologies and implementing multi-layered security measures.
Trend #6: Growth of the Identity Verification Market
The demand for identity verification solutions is growing as more businesses move online and recognize the importance of verifying the identities of their customers. The IDV market is expanding, with new local KYC service providers emerging to cater to specific regional requirements.
This growth is driven not only by regulatory compliance but also by the need to combat identity fraud. As the market expands, businesses will have access to a wider range of IDV solutions and technologies.
Trend #7: Multiplication of “Single” Sources of Truth
In an ideal world, a single, highly secure source of truth, such as a universal digital identity, would eliminate most issues with fake identities. However, in reality, there are multiple sources of truth, including government databases, social media platforms, and private businesses. Each source has its own level of reliability and security.
While governments and businesses strive to become the primary source of truth, it is unlikely that a single source will emerge. Therefore, businesses need to verify identities using multiple sources and adapt to the specific security features of different ID documents.
Trend #8: End-to-End IDV Platforms
As the field of identity verification evolves, businesses are looking for comprehensive solutions that combine various verification technologies into a single platform. These end-to-end IDV platforms offer a holistic approach to identity verification, incorporating document verification, biometric authentication, and other advanced technologies.
By adopting these platforms, businesses can streamline their identity verification processes and enhance the overall customer experience.
Trend #9: Tightened Regulation
With the increasing threat of identity fraud, regulators are tightening the screws on identity verification processes. Stricter regulations and larger penalties for non-compliance are expected. Businesses need to stay updated on the evolving regulatory landscape and ensure that their identity verification practices align with the latest guidelines.
Additionally, consumers are becoming more aware of their rights and may take legal action against businesses that fail to protect their personal information.
The trends outlined above highlight the evolving landscape of identity verification in 2023. Businesses need to adapt to these trends to stay ahead of fraudsters and maintain the trust of their customers. By implementing enhanced verification processes, embracing new technologies, and prioritizing digital hygiene, businesses can mitigate the risks associated with identity fraud.
The future of identity verification lies in comprehensive end-to-end platforms that provide seamless and secure identity verification experiences. By staying informed and proactive, businesses can navigate the evolving landscape of identity verification and ensure the integrity of their operations.