Financial institutions should expect more innovation in the KYC market over the next few years. Sumsub is here to detail what may soon emerge.
The world is becoming more digital every year, and 2023 will be no exception. As such, customers will expect an even easier and faster onboarding process, while governmental agencies will continue to implement new regulations. At the same time, criminals will develop new methods of abusing platforms.
All in all, 2023 will bring both challenges and opportunities for the verification industry. In this article, Our Head of Product Marketing, Olga Skrebneva shares Sumsub’s predictions for the main trends of the upcoming year, while looking deeper into the future of the verification industry. You’ll also learn how to implement the latest verification solutions to stay ahead of the competition.
For next year, we predict further penetration of digital identity in day-to-day services—especially in areas where users have grown accustomed to anonymity, such as dating apps and YouTube comments. With this decrease in user anonymity, we expect that passive biometry will surge, resulting in a shift from one-time face recognition check to an “always on” mode of confirmed identity.
Moreover, we expect further developments in Web 3.0 and related verification solutions. We assume that a new form of digital identity will emerge, and Sumsub is currently developing a new product for blockchain that will enable companies to implement such identities for their customers.
We also predict that regulators will tighten requirements worldwide. Thus, companies should also expect more countries to implement the Travel Rule and stricter data protection measures.
Crypto regulations are also set to change. For example, Switzerland recently introduced a new rule requiring identity verification for transactions greater than 1005 USD, with similar regulations to be introduced in the upcoming year.
In the upcoming year, people should expect wider adoption of document-free verification. This means that more users will be able confirm their identity by simply going through a quick face authentication check.
Many countries have developed document-free verification procedures, with India already implementing such an approach to its financial institutions and banks.
Sumsub has a solution for companies that want to implement document-free verification procedures, called Non-Doc Verification. This can make the onboarding process easier for both companies and their customers. The Non-Doc onboarding process takes place by cross-comparing data provided by customers with what’s stored in government databases. This way, users can go through the verification process only once to get into the database. After the first verification, customers can register with any company by simply providing their data, such as ID number, and going through a liveness check.
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. At the moment, Non-Doc Verification can be used in Brazil, India, Nigeria, and Indonesia, where citizens are familiar with the process of providing their ID numbers for verification purposes and usually know them by heart.
Orchestration allows companies to adjust their KYC process to different types of customers, depending on their characteristics. There’s an infinite number of combinations of checks, depending on the customer’s jurisdictions, the company’s internal policies, and much more. Companies can use orchestration to provide a more personalized approach to every new user.
Anticipating the rising necessity of verification orchestration in 2023, Sumsub has built its own Workflow Builder solution which can be implemented code-free. This technology 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 be automated.
With the Workflow Builder, companies will be able to 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.
We predict that the onboarding process will drastically transform in 2023 with the emergence of all-in-one verification solutions. At the moment, KYC and transaction monitoring are two separate procedures, but we believe that these two systems will be combined in 2023 to boost efficiency.
More specifically, transaction monitoring is a set of procedures aimed at detecting suspicious customer transactions. This helps businesses stay AML/CFT compliant and prevents internal and external fraud. The necessity of transaction monitoring is increasing on a daily basis, as the number of digital transactions is expanding as well. Therefore, companies now offer automated transaction monitoring solutions, which make it possible to check large volumes of transactions for suspicious patterns.
In 2022, Sumsub launched its own transaction monitoring solution, which can offer over 300 ready-to-use risk scenarios while enabling companies to create custom rules and risk profiles. The technology also provides flexible settings for risk scoring, alerts, and actions with simple role and task management. Plus, users can continuously monitor the status of transactions in real time, which, in combination with the other features above, will simplify the onboarding process for new users and ensure that companies comply with regulations, including the Travel Rule.
In 2023, criminals will keep developing new ways to steal people’s identities, commit fraud, and abuse businesses. To confront this, companies need strong anti-fraud solutions that detect advanced fraudulent signals.
Sumsub commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) study to examine the potential value of its platform. The TEI concludes that companies that invest in Sumsub can experience an 240% ROI. This study is designed to help you evaluate Sumsub’s potential financial impact on your company. To that end, Forrester anonymously interviewed four Sumsub customers, aggregated their experiences and benefits, and combined the results into this report.