Surge In Number of Cyber-crimes And Stringent Regulation Relevant To Data Protection And Identity Theft Are The Major Factors Propelling The Growth of Identity Verification Market

Stringent Regulations Regarding Cyber-Crimes Issued By Government In Various Countries Is Anticipated to Boost The Identity Verification During The Forecast Period 2021-2026. Identity Verification Market Size Is Forecast To Reach $11866.74 Million By 2026, Growing at a CAGR 14.05% From 2021 To 2026.

In U.S., individuals have to comply by the Identity Theft and Assumption Deterrence Act. This legislation created a new offense of identity theft, which prohibits "knowing transfer or use, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of Federal law.” Also, the European Union Fourth Money Laundering Directive (4AMLD) has been implemented in 2017 aiming to prevent the EU’s financial system being abused for the purposes of money laundering and terrorist financing. All businesses need to be compliant with Directive’s various regulations, including Customer Due Diligence (CDD) requirements. While AML/KYC laws have been in effect for years, the beneficial ownership laws are more recent. In Europe, the 4th AML Directive came into effect June 26, 2017 and contains provisions regarding beneficial ownership. Such regulations are creating more opportunities for identity verification market during the forecast period. 

With increase in adoption of smartphones, there has been increasing use of SIMs as SIM swapping (also known as SIM Jacking) occurs when a person’s personal contacts are transferred to the SIM of a malicious online user through digital hacking techniques. This is set to push the identification market in IT & Telecom industry. Telecom companies are partnering with identity verification providers in order to prevent fraud. In 2020, Onfido company had partnered with Moflix to launch Yallo Swype, Switzerland’s first 100% digital mobile subscription. This has streamlined identity verification process and helped in reducing the customer onboarding time by 90% from 30 minutes to 3 minutes. Increase in security risk activities in IT sector have created demand for identity verification solutions and this drives the market.

The Asia Pacific region is expected to contribute to the fastest-growing region in the near future, as it becomes technologically equipped through the rapid adoption of new technology. Factors such as government initiatives to tackle identity-related fraud, particularly to strengthen eKYC in order to verify identities, as well as compliance regulations initiated by countries, growing demand for cloud-based identity verification, and an increase in identity-related cyber-attacks, are driving revenue growth in this region. In China, China Ever­bright Bank (CEB) launched a blockchain-based supply chain finance solution by Ant Financial in March 2020. China Ever­bright Bank wants to increase SCF security and eliminate fraudulent transactions by integrating Ant Financial's Duo Chain technology. According to Sina, the Duo Chain platform allows users to perform identity verification and electronic signatures with CEB while simultaneously recording all necessary transactions to a distributed ledger for tracking purposes.

After the breakout of COVID-19, verticals all over the world were forced to adjust to the new digital world because to trends such as Work from Home (WFH). With all enterprises operating more in the digital world, where cyberattackers are not leaving any stone unturned to carry out attacks such as identity theft and identity spoofing, the need for and importance of stronger identity verification methods for providing stronger and reliable authentication for employees and clients, as well as granting access to them, has increased. Furthermore, with increased online processes, such as online onboarding to online transactions as a result of COVID-19, it has become even more critical for verticals such as BFSI and healthcare to stay compliant with the regulations in order to avoid any fines in the event of data breaches and, as a result, have even stronger identity verification measures in place to prevent any possibility of fraud. For instance, following a government-imposed lockdown, the use of currency in the United Kingdom was cut in half. Due to the COVID-19 epidemic in the United Kingdom, FATF guidelines have allowed consumers to transmit selfies and email scanned ID documents as proof of identification.

Companies and consumers alike are becoming more security concerned, which is fueling demand for more identity-verification technologies. According to a recent poll by Fico, forty-four percent of American customers put identity theft and banking fraud among their top concerns. According to FICO's most recent consumer finance trend data, 44 percent of US consumers rank identity theft and banking fraud among their top concerns. This was more than double the number who stated their greatest concern was being a victim of a terrorist attack (18%) and twice the number who said their own death was their top fear. 2020 appears to be the 'year of change,' as thorough online verification has progressed from being exceptional to being expected, if it is not required. This implies that companies are scrambling to create and integrate comprehensive security solutions based on cutting-edge technology in order to prevent fraudsters and satisfy customer demand.

In March 2020, China Everbright Bank (CEB) announced the launch of Ant Financial's blockchain-based supply chain finance solution. China Ever­bright Bank wants to increase SCF security and minimise fraudulent transactions by integrating Ant Financial's Duo Chain technology. According to Sina, the Duo Chain platform allows users to perform identity verification and electronic signatures with CEB while simultaneously recording all necessary transactions to a distributed ledger for tracking purposes.

In November 2019, GBG incorporated a new partnership with FPT software to provide fraud and compliance solutions to the Vietnam market.

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