The factors driving the Identity Verification industry – Is it worth it in 2023?

Identity verification is becoming increasingly important in today’s digital age. With an ever-increasing number of people adopting digital identities and businesses shifting online, ID verification offers a simple solution to keeping things going safely on the internet.

As the demand for identity verification services increases, we can expect to see a changing ecosystem in the industry. This can mean a widespread adoption of digital ID checks, as well as a sharp increase in businesses offering IDV services. 

The Current State Of The Online Global Id Verification Industry

Research by Statista reports that identity verification has shown an increase in industry worth over the past few years. In just 5 years, from 2018 to 2022, the industry value increased from USD 5.52 billion to USD 8.92 billion.

The estimated value for 2023 is USD 10.16 billion and in the next seven years, we are expecting it to reach 18.12 billion.

Increasing demand for cybersecurity measures is one of the key pillars holding the current market state. However, other factors such as digitization initiatives and incentives, strict KYC regulations, and growing competition are also at play.

Validation Of Identity – How Technology Is Contributing Towards The Industry Trends

The two primary drivers to an increasing industry value are increasing demand and increasing supply. When it comes to identity verification services, users and suppliers are both increasing at a rapid rate. In any given industry, healthy competition is crucial to introduce growth and evolution. Today, the introduction of advanced technology such as ML is helping improve digital ID checks. Companies are introducing new ID verification techniques, such as biometric authentication, to better serve consumer needs. The introduction of AI and ML technology into ID verification services is due to competition and increasing demand of services. 

Additionally, external factors are another key element making the industry boom. Here, too, technology is a key driver. For example, facial verification technology was considered to be a key security technique for biometric authentication. However, the dawn of the COVID-19 pandemic rendered the current industry trends and research fairly inadequate. This led to increased research and funding for masked face recognition.

Similarly, Digital Account Opening or DAO has been showing an ever-increasing popularity within the banking sector. Technologies like DAO thrive on digital identity verification to balance both customer care and security needs of businesses.

How AI and ML are Impacting Identity Verification Services

Up until recently, authentication of identity used to be a fairly manual process. Real people would sit behind counters or cameras to check for the identity of individuals.

Machine learning has, today, become a very common part of digital ID check services. Machine learning and artificial intelligence help us identify the accuracy of digital documents as well as the identity of the person with the document.

Today, artificial intelligence-based ID verification services offer packages that include seamless and fast identity verification incorporating facial recognition, document verification, liveness detection, etc. For large-scale enterprises, such solutions are game changers in terms of digital identity verification for finance and financial management, onboarding of new customers, and better employee and project management.

Artificial intelligence and machine learning have also contributed to an improvement in the accuracy of IDV processes.

Verified Identity on the Internet: Can something go wrong?

Privacy concerns are the biggest hurdles to a mainstream digital identity verification process. With features like facial recognition collecting and storing data and a track record of many companies selling personally identifiable information, most privacy concerns are valid. Some of the main concerns when it comes to identity verification services include storage of personal information, data breaches, sale of personal data, and a lack of transparency on part of the collecting organization.

There are many things that can go wrong. However, the same is the case for everything else too. When it comes to digital ID checks, effective regulations are the key to protecting the citizen’s rights to privacy and information.

The United States has set in place several legal regulations to protect the public’s digital rights. Such regulations are systematically regulated and updated from time to time. For example,  over 200 consumer privacy bills were introduced/considered in about 35+ US states, in just 2022.

Additionally, Colorado, Connecticut, Utah, and Virginia recently announced the introduction of the EU’s General Data Protection Regulation (GDPR) inspired regulations. These regulations enforce the right to disagree, share, access, correct, and delete personal data for individuals. For ID verification this includes all personal data collected by any business, from a consumer.

To sum up

The monetary growth within identity verification hints towards our need to be safe on the internet. While there may be concerns regarding safety and privacy, digital ID checks are an undeniable necessity today.

Effective and stringent laws and smarter technology are key to ensuring cyber-safety as well as the public’s basic digital rights. When it comes to identity verification services, what we need the most is innovation and regulations – both of which must not have any room for loopholes. ID verification service providers using the latest technology and working in accordance with KYC and digital privacy regulations are helping build safer online spaces.

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