Identity Verification Market | Digital Solutions to Escape Frauds

In today’s digital age, businesses are prioritizing robust identity verification systems to authenticate user identities. This process typically involves verifying identity documents, biometric data, or other security credentials. With increasing fraud in online transactions and cyber threats, the demand for identity verification services is surging. Accordingly, Triton’s research prediction states that the Global Identity Verification Market is set to rise at a CAGR of 16.15% over the forecast period 2024-2032.

What influences this growth trajectory? Let’s take a look at the status quo of online scams.

Recently, the Internet Crime Complaint Centre (run by the FBI) released Internet Crime Report 2023, which reflects some alarming global statistics:

• In 2023, IC3 received a total of 880,418 complaints regarding internet scams
• Financial losses due to these frauds accounted for $12.5 billion in the same year
• With 298,878 cases, phishing was one of the top cyber-crime types

These numbers highlight a growing threat from internet-based frauds amidst increasing online transaction volumes. The report also analyzed that people falling in the age group of 60 and above are the most vulnerable to these profit-driven fraudsters.

With increasing digital transactions, cyber criminals devise clever methods to commit online frauds. Hence, the integration of advanced AI algorithms, deeper learning models for anomaly detection, and big data analytics is essential to transform the identity verification industry.

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Identity Verification Market – Key Types

As traditional verification methods often involve time-consuming processes and potential security risks, digital solutions are becoming a preferred choice for companies. One notable trend is the increasing focus on digital identity verification, which offers a seamless yet secure user experience.

• AI-Powered Document Verification

This software checks the authenticity of documents, like passports, driver’s licenses, and ID cards, by analyzing data points, security features, and even the physical condition of documents through image recognition technologies.

Examples:

- Onfido: Provides automated document verification and biometric analysis, using AI to compare a user’s selfie with the photo ID to ensure they match.

- Jumio: Utilizes a combination of AI, OCR (Optical Character Recognition), and biometric facial recognition to verify users quickly and reliably.

• Blockchain-Based Identity Verification

Identity verification companies use blockchains to decentralize identity data and reduce the risk of data breaches while allowing individuals to control their personal information securely.

Examples:

- Civic: Uses blockchain technology to allow users to control and protect their identity, offering both businesses and individuals secure and efficient identity verification.

- Sovrin: Provides a secure, decentralized platform for digital identity, leveraging blockchain to ensure user control and privacy.

• Biometric Authentication

This method offers a user-friendly authentication experience, using unique physical characteristics such as fingerprints, facial recognition, and iris scans to verify identities.

Examples:

- Authenteq: Offers real-time identity verification through facial recognition technology, catering to user security and privacy.

- IDEMIA: Specializes in augmented identity solutions, providing a broad spectrum of biometric technologies for secure and quick user verification.

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Sectoral Benefits of Identity Verification

Companies within e-commerce and fintech sectors face frequent challenges related to financial scams, money laundering, terrorist financing, and cyber crimes, which are mitigated through effective identity verification solutions. These solutions enable businesses to streamline customer onboarding, reduce operational costs, and maintain stringent security measures. Thus, implementing advanced identity verification software ensures secure transactions and builds customer trust, which is essential for retaining their users.

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FAQs

Q.1) What are the common methods used to verify identity?

Knowledge-Based Authentication, Online Verification, Database Methods, Two-Factor Authentication, Biometric Verification, Credit Bureau-Based Authentication, etc. are some common methods used for identity verification.

Q.2) How to verify an organization’s identity?

Many companies and organizations have extensive documentation from their business activities, serving as evidence of their identity, such as invoices, bills, receipts issued or received, bank statements, etc., which can help substantiate their existence and operations.