Discussion among Sumsub Specialists: Emerging KYC Patterns in 2024
In the ever-evolving digital landscape, the year 2024 is set to witness significant advancements in digital identity verification and anti-fraud strategies. The predictions for this year point towards a more secure, user-friendly, and decentralized approach to identity verification.
At the heart of these advancements are Artificial Intelligence (AI) and Machine Learning (ML) technologies, which are expected to automate identity verification, improve accuracy, and detect complex fraud patterns. By analysing vast amounts of data and learning from prior fraud attempts, these technologies reduce false positives and negatives in fraud detection systems.
Advanced biometric technologies, such as facial recognition with 3D mapping and movement/liveness detection, iris scans, voice recognition, and fingerprints, are also on the rise. These technologies are designed to verify identity securely and resist spoofing attempts, thereby combating the growing threat of synthetic identities or deepfakes.
In response to AI-generated fraud, including deepfakes, companies are adopting sophisticated AI-driven detection methods. These include behavioural analytics to detect anomalies in user actions, real-time biometric liveness detection to confirm the presence of genuine humans, and document verification systems that detect imperceptible forgery traces.
Adaptive risk-based authentication frameworks are another key trend. These systems layer multiple security signals—including device trustworthiness, biometric data, and personally identifiable information (PII)—to dynamically escalate verification requirements when suspicious activity is detected.
Decentralized identity solutions are also gaining traction. These systems give users control over their identity data, removing centralized databases that are vulnerable to hacking. Such systems allow selective sharing of identity attributes without exposing entire personal data sets, aligning with evolving privacy laws and reducing friction.
Employee training and internal policies are critical complements to technology, preparing staff to recognise unusual requests and mandate multi-layered approvals for sensitive transactions, especially in enterprise settings vulnerable to deepfake scams.
As digital identity verification checks are predicted to surpass 70 billion in 2024, growing 16% over the previous year, it is clear that the shift towards a more secure and user-friendly digital identity verification system is underway. Incoming regulations will require deepfake software to include watermarks, and more countries are expected to implement the Travel Rule and stricter data protection measures in the crypto sector.
The spread of passive biometry is also expected, resulting in a shift from one-time face recognition checks to an "always on" mode of confirmed identity. Businesses will need to adopt comprehensive anti-fraud strategies that extend beyond traditional deepfake detection methods.
The penetration of digital identity in day-to-day services is expected, especially in areas where users have grown accustomed to anonymity. Further developments in Web 3.0 and related verification solutions are predicted. The EU will harmonize the Travel Rule across all its members in 2024, and the EU Digital Services Package, released in October 2023, may have an impact on non-regulated businesses adopting IDV verification.
China has pioneered deepfake regulation with the "Regulations on the Administration of Deep Synthesis of Internet Information Services". Sumsub's experts predict increased prevalence of document-free verification solutions in 2024. The EU also took an important step in regulating AI with its AI Act.
Emergence of all-in-one solutions combining KYC and transaction monitoring is predicted in response to increased identity fraud cases. Account takeovers globally increased by 155% in 2023, according to Sumsub's Identity Fraud Report. In 2023, top fraud trends included AI-powered fraud, money muling networks, account takeovers, fake IDs, and forced verification.
As the digital identity verification landscape continues to evolve, it is clear that a combination of advanced technology, decentralized systems, and comprehensive security cultures will be crucial in countering the sophisticated threats posed by deepfake and AI-enabled fraud.
- The rise in advanced biometric technologies, such as facial recognition and iris scans, will complement the use of AI and ML in sports events for securing identity and preventing fraud.
- With growing concerns about deepfake scams, it's essential for sports organizations to adopt sophisticated AI-driven detection methods and adaptive risk-based authentication frameworks, ensuring a secure and fair digital experience for all participants.
