Digital identity verification is where identity is checked using digitally verifiable elements, such as selfie scans, address checks and knowledge-based authentication.
Juniper Research forecasts that spending on digital identity verification by businesses will reach $16.7 billion in 2026, from $9.4 billion in 2021. This 77% growth will be fuelled by the rapidly growing need to digitally onboard users, which has accelerated during the pandemic.
The new research, Digital Identity Verification: Key Opportunities, Vendor Strategies & Market Forecasts 2021-2026, found that banking and financial services will account for almost 62% of digital identity verification spend by businesses by 2026.
This importance reflects how critical digital verification is in helping banks to meet severe regulatory requirements in a complex digital environment.
Adoption started before the pandemic
While the pandemic accelerated digital transformation, many industries had already been increasing digitization; reflecting shifting customer appetites and opportunities for operational efficiency.
The research, therefore, recommended that seamless digital onboarding is the minimum requirement in the post-pandemic environment, with user expectations demanding processes that are both low friction and high security; necessitating AI use for ongoing, behavioural analytics.
Research co-author Vladimir Surovkin says digital-only banks have shown that fully digital Know Your Customer can work and is very engaging for the user, therefore the pressure is on for traditional banks to deploy new identity verification services.
“Managing this transition quickly and getting the user convenience/security balance right will determine overall success,” he continued.
The bigger opportunity
The research also found that the global volume of identity verification checks will exceed 92 billion in 2026, from 45 billion in 2021.
While banking & financial services are major drivers of this growth, the broadening of identity verification into areas including remote onboarding for mobile network operators or digital gambling will create significant opportunities for vendors over the next five years.