Deepfakes, document-free verification methods, and other important trends—Sumsub is here to detail what may soon emerge.
A study from Juniper Research predicts that digital identity verification checks will surpass 70 billion in 2024, growing 16% over the previous year. This is being driven by businesses adopting stronger biometric verification methods to combat digital fraud. Indeed, according to Sumsub’s most recent Identity Fraud Report, account takeovers alone increased by 155% globally in 2023.
In 2023, the top fraud trends included AI-powered fraud, money muling networks, account takeovers, fake IDs, and forced verification. Notably, online media, professional services, healthcare, transportation, and video gaming emerged as industries experiencing the most substantial surge in identity fraud, meaning both regulated and unregulated industries appear equally vulnerable. All of these trends are likely to persist in 2024, in addition to a range of new challenges and opportunities.
To help us navigate fraud in the incoming year, we’ve gathered a panel of Sumsub’s leading experts:
Together, they’ll cover the continuing emergence of deepfakes and AI, changes in regulation, document-free verification, as well as the convergence of transaction monitoring and KYC.
Before we dive into the details, here’s a brief snapshot of what Sumsub’s experts predict for 2024:
AI-generated fraud, specifically deepfakes, will continue to grow. According to Sumsub’s internal statistics, last year saw a 10x increase in the number of deepfakes detected globally across all industries, with crypto being the main target sector (88% of all deepfake cases detected in 2023) followed by fintech (8%).
There is also a notable regional difference in the increase of deepfake fraud:
For this reason, businesses will need to adopt comprehensive anti-fraud strategies that extend beyond traditional deepfake detection methods. This will include multi-layered approaches, which encompass behavioral anti-fraud measures and transaction monitoring. This holistic strategy not only fortifies defense mechanisms against deceptive content, but also fortifies the overall security posture, ensuring more robust protection against emerging risks in the digital landscape.
In 2024, regulations are likely to tighten and spread to previously unregulated industries (like online media, where we saw the biggest number of identity fraud cases in 2023).
In the upcoming year, expect wider adoption of document-free verification, enabling quicker and easier customer onboarding. More users will be able to confirm their identity by using databases, or going through a quick face authentication check without the need to scan documents. This is especially relevant when a person needs to urgently access a service and doesn’t have the physical ID at hand.
Many countries have developed document-free verification procedures, with India already implementing such an approach to its financial institutions and banks.
Doc-free methods can make the onboarding process easier for both companies and their customers.
This new technology is designed for businesses in the fintech, crypto, trading, marketplace, and transportation industries, as well as for global online businesses that onboard customers in emerging markets.
Sumsub’s document-free verification solutions are currently available for user onboarding in the UK, Argentina, Bangladesh, Brazil, Ghana, India, Indonesia, Kenya, Nigeria, and the Netherlands, with South Africa and Ghana coming soon.
Orchestration allows companies to tailor their KYC process to different types of customers based on their characteristics. Customers, meanwhile, stand to benefit, as orchestration involves reducing the number of checks, thereby improving the user experience. It also contributes to a more effective onboarding process with fewer drop-offs.
There’s an infinite number of combinations of checks, depending on the customer’s jurisdiction, the company’s internal policies, and much more. Companies can get higher pass rates with custom verification procedures based on these specifics, which is made possible by orchestration. Ultimately, this leads to a more personalized user experience.
Sumsub’s Workflow Builder solution enables businesses to create user verification workflows tailored to specific risk scenarios, with the ability to set up particular triggers for the onboarding process. These can include age, gender, country, previous KYC experience, and many more factors, which can all be automated. The Workflow Builder itself can be implemented code-free.
With the Workflow Builder, companies can automate onboarding decision making with flexible rules and actions. This will have a positive effect on the user experience, making for a more personal approach to each customer. The solution is designed for global online businesses in the fintech, crypto, trading, marketplace, gaming, and shared mobility industries.
Another trend we predict is the rise of ‘all-in-one’ platforms. These don’t just handle initial KYC checks; they cover the entire customer lifecycle, particularly transaction monitoring. Such solutions are increasingly critical, since most fraud happens beyond the KYC stage.
Transaction monitoring in particular helps businesses stay AML/CFT compliant while preventing fraud. The need of transaction monitoring is increasing with a corresponding rise in digital transactions Therefore, companies now offer automated transaction monitoring solutions, making it possible to check large volumes of transactions for suspicious patterns.
In 2023 Sumsub launched its own all-in-one solution.
Last year Sumsub developed into a s full-cycle verification platform that secures the whole user lifecycle, providing:
2023 saw AI and deepfakes rise to the forefront of the fraud landscape.
The future of the KYC (Know Your Customer) process will likely involve all-in-one solutions, which combine KYC with transaction monitoring, biometrics, blockchain, artificial intelligence, and document-free verification methods.
AI will significantly influence and improve KYC processes, however, it’s unlikely to completely replace human oversight—as a balanced approach incorporating both is crucial for effective and trustworthy customer verification.
Yes, the future of KYC is likely to involve increased automation, utilizing advanced technologies to streamline and enhance the efficiency of customer verification processes.