A study by Grand View Research on the identity verification industry shows that as the volume of cyber fraud increases – due, among other factors, to the greater digitization of the global population – the growing use of technology specifically developed to address security issues is also observed.
Identity verification relates to the services and products used to confirm the validity of a person's physical identity or documentation, such as a driver's license, passport or other identity document issued throughout the country. Therefore, this is a crucial procedure that ensures that a person's identity matches what is expected.
In 2021, the size of the global identity verification market was valued at US$8.48 billion. Projections indicate that this market is expected to reach US$ 18.6 billion in 2026 and about US$ 33 billion in 2030, with annual growth of more than 16%. The large company segment has been leading this industry, recording a revenue share of 65.4% in 2021.
With an increase of 16% per year, small and medium-sized enterprises are also expected to invest more in user verification by 2030. Broadly speaking, identity verification software provides an uncomplicated, simple, relatively low-cost, intuitive and secure solution to meet growing needs.
A study released by Sumsub reveals that 80% of identity fraud attempts in Brazil occur in the verification stage. This is a mandatory step for all companies regulated by the Central Bank (Bacen) and the Brazilian Securities and Exchange Commission (CVM). By crossing anonymous information from 4.3 million checks carried out in Brazil in 2022, more than 50,000 fraud attempts were examined in 19 sectors – highlighting the country as one of the most contributors to online fraud.
According to Guilherme Terrengui, head of New Business at Sumsub for Latin America and Iberia, large corporations opt for identity verification systems due to significant increased fraudulent activity, money laundering, processing of high-risk transactions, identity theft, cost reduction in manual processes and compliance with various laws.
"As citizens advance in their relationship with technology and digital devices, the possibility of cyber-attacks and security flaws also increases. Verification services such as Know Your Customer (KYC), Know Your Business (KYB), Know Your Transaction (KYT) and Money Laundering Prevention (PLD) – in addition to identity verification in the health area – are actively responding to increased cybersecurity of organizations, mitigating risks and vulnerabilities," says Terrengui.
A study released by Data Bridge Market Research shows that the increasing adoption of advanced technologies such as big data, cloud computing, artificial intelligence and machine learning will positively influence market growth. Many organizations are using identity verification services to improve the consistency of their security tools and platforms.
It is noteworthy that identity management technologies are essential in the financial services industry, since they allow the construction of safe and efficient mechanisms for access control and identity verification. But also the retail and e-commerce segment is expected to grow at a compound annual rate of more than 23% between 2022 and 2030.
Terrengui points out that investments and payments are two segments very prone to fraud in Brazil. The cryptocurrency, video games and commerce industries also suffer from fraud, albeit to a lesser extent. "Both Sumsub's studies and market studies should give companies operating in Brazil a clear understanding of local fraud risks and indicate ways of dealing with them."
Source: GMB
