Predicting Verification Trends for the Coming Decade: Insights from Sumsub
In the rapidly evolving world of digital verification, three key trends are set to shape the next decade: the rise of AI-generated fraud, the widespread adoption of electronic IDs (eIDs), and the complexities of a fragmented regulatory landscape.
AI-Generated Fraud: A Double-Edged Sword
As AI technology advances, it not only aids in fraud detection but also enables more sophisticated AI-driven fraud. Deepfake voices in robocalls and algorithmically generated identity attacks are becoming increasingly common. To combat this, efforts to mitigate AI-generated fraud, particularly in voice phishing and robocalling, are on the rise, with AI-based detection and regulatory interventions being implemented globally. However, bad actors continue to leverage AI's capabilities for illegal schemes, posing ongoing challenges.
eIDs and Identity Verification: The Cornerstone of the Future
Electronic IDs will become a cornerstone of identity verification systems, supported by AI, biometrics, and digital identity verification technologies. The identity verification market, incorporating AI and biometrics, is forecasted to grow substantially by 2035, supporting sectors like banking, government, and healthcare. AI-driven KYC and fraud detection automation will drive faster, more reliable user authentication, improving financial transparency and compliance.
Regulatory Fragmentation and Compliance: A Complex Landscape
The regulatory landscape will continue to fragment across regions but will also evolve towards real-time, AI-enabled compliance solutions. RegTech innovations—including AI and machine learning for predictive compliance, real-time reporting, blockchain integration, and RegTech-as-a-Service models—will help firms manage varied and evolving regulations more effectively. However, the coexistence of multiple regulatory regimes, especially in cryptocurrency and emerging fintech areas, will require adaptable and dynamic compliance technologies to handle this fragmentation.
In the APAC region, deepfake attacks have increased by 1530%. To address this, service providers will have to expand their list of acceptable IDs and verification methods. Non-document verification and new language models will become common in 2024. Over the next ten years, Ontario in Canada is taking active steps to simplify the gambling registration process, while more countries are expected to implement region- and industry-specific regulations. The US leads in deepfake fraud incidents, and Vietnam and Japan have the highest number of deepfake attacks in the APAC region.
In summary, over the next decade, verification will hinge on leveraging AI for both enhancing security and managing AI-enabled threats, widespread deployment of eIDs and digital verification methods, and navigating a complex, fragmented regulatory environment supported by advanced RegTech innovations.
- In the evolving landscape of business and finance, the proliferation of technology, particularly AI, will be instrumental in both enhancing security against AI-generated fraud and creating more sophisticated fraudulent activities.
- As the adoption of electronic IDs (eIDs) becomes widespread, the identity verification market, fueled by AI and biometrics, will significantly grow, impacting sectors such as banking, government, and healthcare.
