KYC Trends Forecast for 2024: Insights from Sumsub Experts
In the ever-evolving digital landscape, 2024 is set to witness significant advancements in digital identity verification and fraud prevention.
Digital and Mobile IDs are rapidly gaining traction, with more identities being stored and verified through smartphones. The younger generation, Gen Z, is leading this shift, with over 80% using mobile wallets. This expansion goes beyond financial transactions to include digital driver’s licenses accepted at airports and by major corporations like Uber and Amazon. The United States is spearheading this movement, with projections that up to 70% of states will launch mobile ID initiatives soon. This transformation could contribute significantly to the U.S. economy, potentially accounting for 4% of GDP by 2030.
The rise of AI-driven fraud detection tools is another key trend. Affordable, cloud-based solutions with faster deployment and user-friendly interfaces are making these tools accessible for small and medium-sized enterprises (SMEs). Identity fraud surged sharply in regions such as Asia Pacific (+121%), particularly with rising deepfake-related incidents. The Asia Pacific market is expected to grow fastest due to digital transformation and mobile-first economies, prompting adoption of real-time and adaptive authentication solutions and stronger fraud prevention infrastructure.
The digital identity market for 2024-2025 is expected to see integration of digital wallets for credential management and authentication, growth of Identity-as-a-Service (IDaaS) cloud platforms for scalable identity governance, enhanced identity lifecycle management for automated and compliant identity updates, increased use of multi-factor authentication (MFA) and biometric authentication, development of blockchain-based identity solutions and AI/machine learning to advance verification accuracy and security, and strong regulatory pressure to improve data protection and privacy.
Decentralized Identity Systems are gaining momentum as privacy-centric verification solutions. These systems, both non-biometric and biometric, reduce reliance on centralized sensitive biometric databases, promoting user control, transparency, and resistance to data breaches. The adoption of these systems aligns well with privacy regulations and supports frictionless, passwordless authentication experiences.
Additional evolving trends include the emergence of contactless solutions, AI integration, and multi-modal biometrics, despite ongoing concerns around privacy and implementation costs.
2024 is also expected to see greater orchestration of the KYC process, allowing companies to adjust their KYC to different types of customers based on their characteristics. Further developments in Web 3.0 and related verification solutions are anticipated. Digital identity verification checks are predicted to surpass 70 billion in 2024, growing 16% over the previous year. The penetration of digital identity in day-to-day services is expected, especially in areas where users have grown accustomed to anonymity.
These trends reflect a global move toward faster, safer, and more privacy-respecting identity verification and fraud prevention mechanisms. The future is undeniably digital, and the focus is on making identity verification more accessible, secure, and respectful of user privacy.
[1] Source: McKinsey & Company [2] Source: Juniper Research [3] Source: MarketsandMarkets [4] Source: Forbes [5] Source: IDG Connect
The integration of digital wallets for credential management and authentication is anticipated in the digital identity market for 2024-2025, marking a strategic move in finance and business sectors. Additionally, the growth of Identity-as-a-Service (IDaaS) cloud platforms is expected to strengthen cybersecurity measures by promoting scalable identity governance.
The evolving trends in decentralized identity systems serve as privacy-centric verification solutions, warranting increased attention in technology-driven business environments due to their potential for user control, transparency, and data protection.
