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ID Verification Market Segmented By Deployment Mode such as Cloud-Based, On-Premises with Industry that is BFSI, Retail, Government and Public Sector, Manufacturing, Healthcare, Education, Energy and Utilities
ID verification solutions and services are used by various businesses to ensure whether the information provided by users or customers is associated with the identity of a real person. ID verification solution ensures high level of assurance with detailed customer attributes including personal credentials, nationality & immigration status, identity document verification, and employment & business registration.
ID verification is a comprehensive solution to ensure secure customer enrollment process, by providing real-time seamless onboarding experience and minimizes the risk of identity fraud. ID verification processes are an essential requirement in most processes and procedures, both online and offline.
Identity verification is an essential requirement where verified identity is essential, such as border controls or digital services access. The rising frequency of identity related frauds and data breaches would drive the growth of the ID verification market.
The coronavirus pandemic has been one of the biggest change maker in recent decades. Various organizations are now operating remotely and touchless or digital solutions are needed more than ever. The pandemic has forced people to stay at home and find ways to connecting virtually with the banking industry.
Many banks around the world are adopting various security and privacy solutions, like remote-ID verification, E-KYC on-boarding, contactless payments to enable their business clients “contact-free” banking, which has surged the demand for online ID verification tools.
The ID verification market has shown significant growth during the pandemic, as it is expected to grow by nearly 8% - 10% in Q1-Q3 2020 and is projected to show increased growth post-coronavirus.
Moreover, the pandemic has triggered an uptick in digital fraud and identity theft. According to Federal Trade Commission (FTC), around 18,235 fraud reports has been received since the beginning of the year 2020. The rise in identity frauds on banking, government and retail sectors has increased the demand for ID verification solutions.
The Rise in Frequency of Identity Thefts would drive the Growth of ID Verification Market
Businesses increasingly becoming depended on digital data and computer networks to conduct their daily operations and business processes. Growing pools of personal and financial information are being transferred and stored online. Cyber criminals are becoming more sophisticated and moving beyond traditional bank account hacking into opening fake mobile phone accounts, internet payment accounts and online merchant accounts using stolen credentials.
In 2019 the ITRC reported that hacking was the most used method of breaching data, with 577 data breaches resulting in 15.3 million records exposed. Identity theft becoming more common as criminals get more sophisticated. Account fraud losses also rose slightly, as cyber criminals are targeting financial accounts, such as loyalty and rewards programs and retirement accounts. Thus the rise in frequency of identity thefts and data breaches would drive the growth of the ID verification market.
Stringent Regulations and Compliances to Drive the Adoption of Identity Verification Solutions
Regulations and compliances are becoming increasingly strict across every industry majorly for the financial institutions. Regulations allow financial institutions to better verify customer identities during the opening and maintaining of accounts. The major challenge of effective identity verification is staying in compliance with KYC regulations while ensuring a smooth and safe customer experience. Accurate KYC verification solutions can help prevent frauds like money laundering.
Also, while sharing economy, companies need KYC to ensure the safety their customers and assets. Moreover, regulations such as AML5 and eIDAS (electronic IDentification, Authentication and trust Services) are the regulations that set standards and norms regarding the use and forms of online identity verification.
AML5 regulation is required to fight against fraud and identity forgery, money laundering and terrorist financing, while eIDAS regulations ensures all aspects related to electronic signature, trust services and electronic transactions online. To comply with stringent regulations and compliances organizations is deploying advanced ID verification solutions which would drive the growth of the market.
Key players in the ID verification market are focusing on product innovation and strategic partnerships with the technology vendors to collaborate for offering advanced ID verification solution and services to mitigate financial frauds and identity thefts. The major players offering ID verification solutions includes Experian, Lexisnexis Risk Solutions, Equifax, Gemalto, Jumio, Shufti Pro, Idenfy Transunion, among others.
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