Within the vast expanse of the digital realm, identity authentication, commonly referred to as IDV, emerges as a pivotal instrument employed for the validation of the genuine identity of an individual. This multifaceted tool serves as a safeguard, protecting the integrity of virtual transactions, with a pronounced emphasis on sectors such as banking and commerce, among numerous other domains.
In alignment with the insightful findings of the MarketsandMarket report, the IDV landscape stands on the verge of an extraordinary transformation. The escalating prevalence of identity theft incidents has increased vulnerability to unauthorized access, driven mainly by the enforcement of increasingly stringent privacy regulations.
This problem naturally prompts a significant question: what facets of identity verification trends will influence the industry in 2023? Consequently, businesses and end-users must recognize the need to remain conscious of and engaged with optimal guidelines and innovative solution integration. Henceforth, this post shall delve into the pivotal developments in these dynamically evolving domains.
Identity Verification Trends For 2023
Trend #1: Identity Verification As A Service
Business identity verifications are an essential and complex part of ensuring the security, trustworthiness, and safety of the firm’s e-commerce and consumers. However, setting up and sustaining an in-house authentication mechanism is usually tedious, costly, and hard.
The organizations will have to outsource the infrastructure, as well as the human resources involved, as it is a challenge. Moreover, they must comply with various regulatory, standard, and client-based rules. One such challenge an organization faces is, for instance, providing identity verification, which assists in evading these challenges by outsourcing it to external service providers.
The section above discussed that the IDV market is growing, and new local KYC service providers are emerging for specified region needs. These cloud-based and API-driven identity verification services, such as (knowledge quizzes, face recognition, and liveness detection) help facilitate the integration of different verification offerings.
Trend #2: Liveness Checks Are Essential
Business entities should take steps to ascertain their unique identity, guaranteeing the reliability and security of their digital interactions and clientele. However, most people need help to prove their online identities since these are very complex fakes that are difficult to recognize.
For instance, cybercriminals can use deceptive tricks such as spoofing e-services and websites to gain access. Such deceit could translate to substantial monetary losses and compromise a company’s business interests.
However, in this particular setting, most organizations have begun using liveness checks to ascertain if the person is still alive while undergoing authentication. They do this by sniffing out spoofs of biometrics, fabricated ID cards, or any other document pretending to be a genuine credential.
One notable identity verification trend of 2023 is the liveness check. This trend involves artificial intelligence, machine learning, biometric, and behavioral analysis techniques to examine vital signs as a measure for successful user verification when they attempt to log into their accounts.
Such instances involve users who must show a physical difference in any body part, such as moving, to verify that they are alive or legitimate.
Trend #3: Secure Identity Verification
There are many types of secure (privacy-preserving) verification that ensure user privacy and security. It follows the principle of data minimization. Only the information needed for verification is gathered, processed, and saved.
Technology and methods supporting privacy-preserving identity verification include homomorphic encryption, zero-knowledge proofs, and secure multi-party computation. Using homomorphism, the users can encrypt their data and do the processing. Zero-knowledge proof is an algorithm that enables parties to demonstrate that they possess specific data or information without giving any additional detail to the verifier.
The system is based on the principle of zero-knowledge whereby the verifier should neither see nor learn about the identities and data of the user; however, they should confirm having those. It can reinforce security data protection and the liability in its storage during the verification process to achieve better trust, compliance, and user experience.
Trend #4: A More Complicated Verification Process
Businesses and consumers face a significant threat of identity fraud and scams. Javelin Strategy and Research’s 2023 Identity Fraud Study revealed that around 49 million people were victims of identity theft in 2022; it cost them approximately $56 billion.
For instance, such disclosure requires reinforcing the safety fences around fraud and falsification. One such way is two-factor authentication (2FA) — which is more efficient than other methods as it checks various users’ credentials before approval into a system.
However, more verification procedures are more challenging since they have their difficulties. First, such apps can reduce conversions as the buyers might give up after halfway, while other users prefer moving to other players, assuming the app is troublesome.
In their research, PYMNTS.com pointed out that this factor matters and found that 54% of customers who do not engage in online purchases do so because they find verification too complex. Consequently, firms must incur extra costs, such as equipment and software, to facilitate a smooth project transition in operations.
Identity verification is a critical sector that is constantly developing and changing to cope with online community requirements and issues.
Therefore, you should expect more trends and developments in identity verification for 2023 and the following year.
To keep up with new developments in fraudulent practices, businesses and customers require an appropriate partner to help them with such risks and consequences.