- Easy integration with the existing security infrastructure
- Recent trends in biometric technology
- The shifting identity verification trends with Blockchain technology
- Frictionless KYC-KYB identity verification processes
- Growing remote work culture post-pandemic
- Rising awareness of AML-KYC Compliance worldwide
From time to time, regulatory developments in AML-KYC Compliance have molded the identity verification trends and the technologies in use. Today, securing a user’s identity is as important as the user-identity verification process itself. Hence, the AML-KYC industry has greeted various hi-tech innovations to create a safer global identity verification market for the financial and regulated sectors.
Let’s discuss how tech advancements dominate the current global identity verification market and the kind of outgrowth which regulated industries look forward to keeping up with the changes to ensure the better safety of their onboarding customers and protection against identity theft.
Easy integration with the existing security infrastructure
The first and foremost is embracing easy and compatible AML-KYC integration with the existing organizational security structure. For example, financial and regulated institutions prefer identity verification tools that quickly integrate within their existing systems, as they don’t want any turbulence in the core technologies which are in operation for years. In addition, advanced integration methods check the compatibility levels during the prototype phase, making the AML-KYC implementation process extremely time and cost-efficient.
Recent trends in biometric technology
Next, recent trends in biometric technology have overcome various longstanding security loopholes. Biometrics identity solutions verify identities through iris and retina scans, fingerprints, palmprints, facial recognition, and facial comparison technologies. With every new standard, a new iteration in the biometrics ID verification is set. As a result, many regulated products and services are now relying on this technology to fight identity theft.
With ID theft and financial fraud among the top AML regulatory concerns, various RegTech giants have conceptualized and introduced innovative prototypes in the digital identity verification market to combat the growing money laundering threats. Thus, Multimodal Biometrics, i.e., two or multi-factor biometrics verifications, is emerging as the most powerful option for businesses from a security standpoint. Furthermore, digital identity is not only the identity stated in one’s id documents; it also entails the individual’s univocal identity, with geolocation, social networking, and biometric features.
The shifting identity verification trends with Blockchain technology
AML-KYC connoisseurs assume Blockchain technology will mark its way in the global identity verification market, 2023-25. If we evaluate the recent identity verification trends from a technical perspective, Blockchain is expected to grow manifold, disrupt the AML industry, and bring information decentralization in the next decade. On the contrary, there is ongoing research to overcome challenges like deepfakes in Machine Learning and Artificial intelligence technologies. Besides, identity verification on Blockchain-based technology is relatively more secure, as this trustless record-sharing method eliminates the middleman channel while authorizing and streamlining the identity process.
Frictionless KYC-KYB identity verification processes
Identity verification is now apparently inevitable in both financial and non-financial industries. For example, any process that requires businesses or individuals to open accounts, pay online, and deal with financial instruments is subject to Know Your Customer (KYC) and Know Your Business (KYB) authentication. Similarly, every industry that deals with the mass user onboarding process must also apply advanced identity verification methods as part of AML Compliance measures.
Though a growing number of individuals and businesses today are looking for a more secure way to verify their identity, contrarily, many people have started perceiving the onboarding or diligence process as an added burden owing to the recent rise in data breaches. Also, biometric, eco-sign or ID proof procedures create additional friction in the user experience. On the face of it, there is a critical need for sleeker technologies to verify user identity without friction or unwanted halts during the onboarding process, as that could make users grow skeptical to the extent that they might decide to withdraw their submissions.
Growing remote work culture post-pandemic
An upward graph in the digital channel adoption post-COVID-19 pandemic has also shown increased cyber threats and safety vulnerabilities. The demand for an all-inclusive digital identity verification market is surging continuously to combat these security threats. New verification methods have responded aggressively to the intensifying cyber terrors and other susceptibilities at organizational levels. The vigorous scope of remote operations has brought forth the bring-your-device (BYOD) trend, which is now driving the identity markets. BYOD trend also has derivatives like bring-your-own-phone (BYOP), bring-your-own–technology (BYOT), and bring-you-own-personal-computer (BYOPC).
Organizations have widely adopted biometric verification methods as their integral security measures as an increasing number of work-front operations are performed remotely post-pandemic. As remote operations are becoming a new normal, hand-in-hand fraudsters are adopting new technologies to trick the victims into the sophisticated email, SMS, and other identity scams. Customers are now more susceptible to phishing, account takeovers, lending fraud, and other identity cons. Hence, organizations must perform proper due diligence checks to detect and combat identity threats in real time and save themselves from financial and reputational loss.
Rising awareness of AML-KYC Compliance worldwide
Identity verification procedures have been in application for years. Still, with emerging regulations, financial and regulated organizations are now more open to implementing advanced Blockchain, Artificial Intelligence, and Machine Learning algorithms to keep up with the AML-KYC regulations.
International laws and regulations, including the U.S. Bank Secrecy Act (BSA), EU Anti Money Laundering Directives (AMLD), and Financial Action Task Force (FATF) Recommendations, have brought evolving standards to the AML-KYC industry. And to maintain these standards, businesses must maintain the AML regulations, and financial institutions must introduce up-to-date technologies to identify individuals and businesses. Also, in the wake of recent data breaches, enterprises have increased their due diligence budget to organize safer and frictionless onboarding of their customers.
IDMerit is a global identity verification market pioneer and offers the best-in-class identity verification solutions to businesses worldwide. Book an IDMerit product demo with our AML-KYC Compliance expert; we help global businesses remain AML regulatory compliant.