Building trust in 2023: Identity & fraud predictions

Today, many digital and emerging brands are given too much credit when it comes to protecting people’s digital identities online. With no universal standards, regulations are open to interpretation and ‘trust-washing’ claims. The divide between what brands ‘must do’ and ‘should do’ leaves us as consumers with no real way of knowing if robust digital identity verification and fraud prevention measures are in place.

In 2023, we will hear growing calls for greater standards and more transparency. Businesses, particularly consumer-facing brands, will begin to make a virtue of transparency in the steps they take to protect people’s identities and the fraud prevention measures they have in place. We are likely to see more naming and shaming of poor practices and brands failing to protect digital identity as well as more regulation.   

“Businesses will begin to make a virtue of transparency in the steps they take to protect people’s identities and the fraud prevention measures they have in place.” 

As the search for universal standards continues, digital identity verification providers, like us, will continue to work with government bodies and policymakers on ways to build robust, reusable digital identities in 2023.  

What defines ‘digital identity’ will certainly continue to evolve beyond PII, like social security numbers and biometrics, to include alternative identifiers from our digital life. Mobile data especially – mobile device, mobile account and mobile behaviours – provided by the primary enabling platform of our digital lives will increasingly form a vital layer in better understanding us as individuals. The work of binding all our data together into a single, multi-factor digital identity will continue to shape the evolution of building trust online. This digital identity will be harder for fraudsters to fake and easier for businesses and organisations to process into improved workflows and fraud detection capabilities.

The reverberations of increased fraud incidents that followed a pandemic surge in digital transactions will continue to be felt across the Asian financial services sector in 2023. The threat dynamics will continue to rise with regulators becoming more stringent, requiring stricter enforcement of fraud detection and prevention measures.  

We foresee the banking and financial services industry responding positively, prioritising fraud risks and proactively seeking out stronger fraud prevention capabilities. Demand for next-generation financial crime platforms that can track risk across the complete customer lifecycle will increase. From onboarding through to transactions, FIs will increasingly demand solutions that can manage identity verification and transaction monitoring, detecting sophisticated patterns of fraud and money laundering while supporting enhanced regulatory reporting.

“We anticipate increasing demand from businesses for solutions that offer a holistic view of the customer lifecycle, from onboarding through to in-life activity.” 

In 2023, regulatory pressures will bring greater alignment between ‘traditional’ financial services, like banking and investments and ‘new’ finance, including crypto and buy now pay later (BNPL). This alignment will span many areas of regulation, including know your customer (KYC), anti-money laundering (AML), affordability, management of customer funds and business processes. Increased crypto regulation will help digital currencies emerge from the crypto winter, building trust in the sector and among investors.

Increased regulatory oversight is coming to the online gaming industry also. In Latin America, new regulatory frameworks will bring greater protection for players and new markets for iGaming operators. In the UK, regulation on player affordability will mitigate gambling harms and take a  step towards a ‘single customer view’ of a player’s spend across all licensed operators. Better player protection will help operators build trust in the sector.

For Australia and New Zealand, 2022 was an unprecedented year with a record number of malicious, large-scale data breaches affecting well-known organisations. As a result of these cyberattacks, protecting individuals’ personal identity data and advancing secure methods to verify digital identities has moved further up the business agenda in 2023.

Here, as elsewhere in world, we anticipate increasing demand from business for solutions that offer a holistic view of the customer lifecycle, from onboarding through to in-life activity. Interest in secure, biometric methods of identity proofing will continue to grow. Demand for advanced data analytics and transaction monitoring to flag suspicious patterns of behaviour and suspect transactions will also increase. More and more businesses will seek out a seamless platform that brings together automated identity and fraud monitoring capabilities while keeping their customers’ data safe and improving their operations.

“The work of binding all our data together into a single, multi-factor digital identity will continue to shape the evolution of building trust online.”

As technology, regulations and consumer demand combine to drive higher standards in secure digital identity verification, we should continue to demand inclusivity. In 2023, we will continue to work with Women in Identity to build a Code of Conduct for vendors and policymakers that limit the human impact of identity exclusion.

In a world where proving and trusting digital identities is central to how we live, work, socialise, buy, rent and borrow, no one should be left behind. Especially in a year when economic pressures will make it more difficult for both businesses and consumers, it will be essential to take action to avoid identity exclusion. By using multiple data sources, not just financial data that prejudice against thin-file consumers, or by using alternative identity-proofing processes that don’t discriminate against race, gender, age or ability, customer and citizen transactions can take place safely and inclusively for everyone.