As time goes by, fraudsters have increased their tactics to a level one could not have imagined. They have become tactically more vital than they have ever been in this digital world. 2020 was a disaster for identity fraud as the rate soared sky-high. And then came 2021, where criminals used biometrics to become more lethal in identity frauds and gain illicit benefits. Nonetheless, every problem can have a solution, and to fight criminals and their illegal activities, businesses are adopting identity verification solutions.
But did you have an idea that the market of identity verification services may reach 18.12 billion dollars by 2027 due to the ups and downs in the market?
Well, let’s have a look at the most gravitating trends that we can expect in 2021.
The Rising Trends At a Glance:
- The world is shifting to NFC based identity verification service
- Biometric Identity Verification is facing racial issues
- The rise in identity frauds such as account takeovers
- KYC/AML regulations becoming more stringent over the years
- The new trending replay scam
Online ID Verification Trends of 2021
Near Field Communication (NFC) based ID Card Verification Service
NFC technology has brought multiple innovative technological solutions to the online world. NFC has brought about a lot of convenience in the processes of NFC, such as cashless and touchless payments. But now, the introduction of NFC for ID card verification solutions has provided additional benefits to the financial industry. The identity validation process uses a chip-based ID document and an NFC device to authenticate the individual’s identity. NFC has made the process of customer onboarding easier and quicker. It is suspected that a significant number of the world has devices that have KFC enabled. Therefore, the IDV market showed an excellent opportunity to make its verification services better and effortless.
Biometric Authentication may be in Hot Waters
Fraudsters have tried their best to dodge biometric verifications, and hence frauds have grown drastically and dramatically. Experts have even claimed that fraudsters have developed heinous tactics to fool digital identity verification. Consequently, reports suggested that the biometric verification systems do not have robust verification because they face ethnicity issues. This is mainly because the service providers are not designing and training their AI algorithms according to the need.
Prevailing Identity Frauds
Statista report has forecasted that identity frauds may increase by 82% by the end of 2021.
But what types of identity frauds?
Well, majorly, account takeovers and synthetic identity fraud are the most prevailing frauds that will happen in 2021.
Fraudsters are giving businesses a tough time by being technologically equipped. But, other than account take over frauds and synthetic identity fraud, there is a new prevailing scam that needs to be combated with full force.
The Increasing New Scams Trend
The most trending scam of 2021 which financial businesses are facing is the “replay scam.” You may have heard about this scam before the digital world, but now it is being used on online platforms. Unfortunately, many businesses are unaware of this scam and can fall prey to these scammers. But what is replay fraud?
Well, a replay scam is the recycling of an official document over and over again with changes in details. In other words, the scammers use the same document and generate multiple documents from it by changing the sensitive details. This makes it difficult for identity verification services to detect frauds.
Criminals are Adopting Artificial Intelligence and Machine Learning
Fraudsters are also adopting machine learning and artificial intelligence to gain illegal access to official documents and accounts. This means that both the online ID verification solution and fraudsters are using the same technology, but one is combating fraud while the other is generating fraud. The competition is real and brutal!
Rigid AML/KYC Regulations
The global regulatory authorities around the businesses are becoming more advanced and rigid than they ever used to be. Approximately 12.9 billion euros were issued as a non-compliance penalty in the year 2020. The corporate industries have drastically failed to comply with stringent AML and KYC regulations, leading them to face hefty fines. To ensure that such penalties don’t happen, regulatory authorities have implemented new strategies; for instance, the 6th AML directive is implemented in the European Region, whereas the threshold at the international level has been decreased.
The Final Verdict
The fact that fraudsters are becoming more and more advanced cannot be ignored. They can go to any heights just to fulfill their illegal aims. The identity verification market is plummeting due to such events and mainly due to the COVID disaster. But before things get out of hand, the corporate world must take necessary actions to comply with updated regulations.