We’re passed the halfway point of 2020 but it might as well be the year 2023 with all that has transpired this year.
From Brexit and the US-China trade to a worldwide pandemic that’s still spreading insecurity and volatility, we’ve been through a lot.
To try and predict what the future world for Digital ID, or any other topic for that matter, is indeed optimistic on our part. What we’ll do instead of predicting, is engage in informed guessing, based on the information we have right now.
Let’s dive right in.
1.Access To Data Is The Name Of The Game
We might be living in the golden age of information, but when it comes to KYC/AML, Google will simply not do the job.
When it comes to identity verification, anti-money laundering checks, and fraud prevention, companies are looking for information that is not readily available on the world wide web. When conducting a background check, a company is usually looking for information in:
- Corporate registries
- Sanctions lists
- PEP lists
- Government documents
- Dark web
Access to these information sources usually requires passwords, verification steps, and several other highly impenetrable steps. Couple that with the fact that this kind of data is spread across different territories and languages, and you immediately realize that accessing data is far removed from a simple Google search.
Googling information for KYC purposes might sound laughable to you but it’s a sad reality. A recent survey by KYC/FinTech powerhouse Arachnys has revealed that 85% of AML & KYC analysts use Google for due diligence purposes.
The number is staggering and it goes to show that we’re still at beginning of a trend that will change the way digital identification is executed.
2021 onwards will probably see digital ID verification companies partnering with FinTech platforms and vendors such as Arachnys in order to broaden their access to data. Digital ID providers will essentially have to enhance their offering by not just identifying that the person who they are onboarding is who they’re saying they are, but also ensuring that they have a past that doesn’t incriminate them or make them a threat for the company in any way.
2. Artificial Intelligence Will Continue To Drive The Industry
Much has been said about AI and the eKYC sector and believe us when we say that the hype is real. Artificial Intelligence has been commercialized and commonly accepted as the technology that will drive the sector forward for years to come.
The FATF Guidance on Digital Identity was a major step in normalizing and legitimizing AI within the digital ID community but there’s more to come where that came from.
All you have to do is look at the White Paper on Artificial Intelligence: a European approach to excellence and trust from the European Commission and you quickly realize that this is not a trend that will spike and fall. This is the new state of affairs.
What will become more apparent in the years to come, is the human role in the digital ID process. A common misconception about AI, in general, is that it replaces people in the workplace.
This couldn’t be furthest from the truth and it’s surely not the case in the KYC vertical. As AI continues to evolve, so will the role of compliance professionals.
The space of Behaviour Analysis is becoming more and more prominent as a result of AI use in ID verification. Companies are now trying to understand their users and create a balance between security and convenience.
Let’s give you an example.
If you buy your lunch from the same place, every single working day and you are suddenly buying lunch in another country, the system will be able to pick up on the irregularity and immediately request an extra layer of identity authentication.
3. Biometrics Are The New Tech Frontier To Look Out For
For those of you not familiar with the term, biometrics are processes of identity verification that identify physical and behavioral patterns. Iris recognition, face recognition, and finger geometry recognition are some of the most popular biometric examples.
Biometrics became a prominent topic of discussion during the coronavirus pandemic. The social distancing and remote working conditions enforced in most major markets created a breeding ground for online fraud.
This new state of affairs created the need for new, improved digital identity solutions.
This new breed of technology is coined to be the ideal solution for the situation created by the virus for a number of reasons. First and foremost, it provides an extremely high level of security and assurance as everyone has access to a unique set of biometrics. It makes it virtually impossible to steal or fake someone’s “credentials”.
Then, there’s user experience - an area where biometrics excel with their convenient and fast offering. Users can simply use their phones to scan their physicals characteristics and give the platform the data is needs to confirm their identity.
The seed has been planted and it seems that 2021 onwards, biometrics will start to become even more of a commercial solution.
According to Technavio, by 2024 the demand for mobile biometrics and m-commerce, combined with the technology’s efficiency in preventing fraud, will be the main driver for the increase in the global mobile biometrics market. The estimated increase is $15.63 billion at a CAGR of 19%.
Not only is the industry set to boom in terms of commercial demand and supply, but regulation will come into play too. The regulations surrounding AML and KYC, including 5AMLD and 6AMLD, make provisions and have clear pointers for remote authentication, opening the door at biometric usage even more.
There you have it: an informed assessment of what the future might hold for the digital ID sector. If history is anything to go by, you can never be sure about what’s in store in business but what you can do, is prepare.
Companies that had remote working protocols in place where the ones to do well during the crisis, showing once again how being proactive will always serve you well rather than be reactive.
Whether these trends will pan out, only time will show but what you can do, is consider them in your planning going forward.