1、Insights into Payments and BeyondEndorsement partners:Emerging Technologies and Trends in Identity Verification,KYC,and KYB Report 2024RELEASE VERSION 1.0MAY 2024COPYRIGHT THE PAYPERS BVALL RIGHTS RESERVEDTEL:+31 20 893 4315 FAX:+31 20 658 0671MAIL:EDITORTHEPAYPERS.COMContact usFor inquiries on edit

2、orial opportunities please contact:Email:To subscribe to our newsletters,click hereFor general advertising information,contact:Mihaela MihailaEmail:Emerging Technologies and Trends in Identity Verification,KYC,and KYB Report 20243THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,

3、Kyc,and KyB rEporT 2024sharpen your knowledgeTwo woodcutters began their day by cutting wood.One of them tirelessly swung his axe,never taking a break,while the other would occasionally step away from his task and then return after some time.Surprisingly,by the end of the day,the woodcutter who had

4、taken breaks had cut more wood than his nonstop counterpart.The diligent woodcutter couldnt help but wonder how this could be possible.Curious,he asked his colleague for an explanation.The response was simple yet profound:every time he took a break,he would sharpen his axe,making it easier to cut th

5、rough the wood efficiently.The moral?in the complex world of digital onboarding,we must be creative and open-minded,and sharpen our knowledge about the latest practices and technologies that enable financial institutions and regulated entities to reduce fraud and build trust,navigate evolving regula

6、tory and compliance requirements,and cut operational costs.As part of this effort,The Paypers launches the first edition of the Emerging Technologies and Trends in Identity Verification,KYC,and KYB Report.The report offers industry experts and tech vendors a platform to share the latest trends and d

7、evelopments in identity verification,trust orchestration,and compliance automation.2024:a year of transformationThe last 18 months have been very challenging for businesses.Rising interest rates,massive layoffs in the tech sector,conflicts in different parts of the world,and expectations of a possib

8、le recession have forced people to seek means of living in both positive and negative ways.The development of generative ai has provided fraud perpetrators with new and easy tools to automate and spread attacks.moreover,there has been an increase in fraud statistics and types and cyberattacks.The dy

9、namic regulatory landscape(aml,KYC,eIDAS 2.0,and MiCA in Europe,etc.)has pushed compliance leaders to tap into tech solutions that are not only efficient but also effective.The availability of a variety of payment methods(A2A payments,instant payments,crypto,CBDCs,etc.)has been pressing financial cr

10、ime prevention systems to deliver faster and more accurate results.furthermore,trends such as heightened discussions about the use and importance of verifiable credentials,the adoption of digital wallets,and the development of passwordless solutions have been revolutionising the security space and s

11、haping the investment sector.in this context,three pivotal challenges dominate the industrys agenda in 2024:onboarding new customers quickly and scaling faster,staying compliant,and cutting costs.The Emerging Technologies and Trends in Identity Verification,KYC,and KYB Report ForewordMirela CiobanuL

12、ead Editor at The PaypersMirela CiobanuLead Editor at The Paypers4THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024addresses some of these concerns,as payment and security experts share a plethora of insights,solutions,and services that financial instituti

13、ons(Fis)and regulated entities can leverage to minimise risk and maximise confidence.Highlights of the Identity verification,KYC,and KYB report include:Whatsnewindigitalonboardingin2024Customers and businesses alike now expect financial products and services that are accessible anytime,anywhere,and

14、at minimal cost.However,the pursuit of rapid service delivery has also ushered in new challenges,particularly in combating fraud,ensuring data privacy and security,and maintaining regulatory compliance.As such,Verifiable Credentials and reusable identity verification solutions,the use of AI and data

15、 in identity verification(IDV),and fraud insurance technology might be seen as a panacea for the KYC process.TrusteddigitalIDwalletsDigital identity wallets are more than simple credentials carriers but they have become trusted,as Nick Mothershaw,Chief Strategist,Open Identity Exchange(OIX)mentions

16、in the report.Nick coined the term trust anchor for a key trusted ID credential such as the EUs national ID card or UK credentials verified to a level of trust by certified ID Service Providers placed securely within a wallet,transforming the wallet into trusted.EffortsintheEUtoenabledigitalidentiti

17、esThe rise of digital identity wallets and digital credentials represents a shift towards reusable identity(which allows individuals to access multiple online services with a single set of verified credentials).This shift reduces the need for one-time verification,changing the business model of iden

18、tity verification,and streamlining many processes that require high identity assurance,according to Anne Bailey,Analyst with KuppingerCole.This effort to spin up a reusable,verified digital identity ecosystem is spearheaded in Europe by eIDAS 2.0.Detectingandpreventingsophisticatedtypesoffraudbyprov

19、ingLivenessTheres a risk that the person using the device or presenting credentials isnt the authorised user.This could occur due to device cloning or an impostor obtaining new keys for a separate device.To mitigate this,Kevin Alan Tussy,CEO of FaceTec,emphasises the importance of biometrics and 3D

20、Liveness Detection.Ensuring liveness confirms that the genuine user is physically present when biometric data is verified,preventing unauthorised access.ThepowerofprogressiveprofilinginidentityverificationIn a world where the lines between KYB and KYC and the nature of who and what is a business bec

21、ome increasingly hard to define,maintaining a seamless onboarding process while combating fraud and ensuring compliance requires progressive profiling.According to Cafs CEO Jason Howard,this strategy involves collecting information incrementally as needed,minimising stored sensitive data,and reducin

22、g privacy law risks.Challenges,trends,andbestpracticesinbusinessandentityverificationBusiness Entity Verification(BEV)plays a critical role in the banking,payments,and fintech sectors.To balance the evolving regulatory expectations surrounding KYC and KYB processes,and a rise in customer demands,fin

23、ancial institutions must contend with the complexities of digital onboarding.To mitigate these aspects,Will Charnley,Managing Director at Liminal,advises regulated entities to integrate technology(AI,machine learning,blockchain,data analytics,etc.)and adopt best practices for risk-based strategies.A

24、dviceonscalingdigitalonboardingindifferentjurisdictionsExpanding into new territories and engaging with unfamiliar customer bases can present challenges,especially when unforeseen circumstances arise.To overcome these hurdles and facilitate cross-border growth,Jeff Sakasegawa,Trust and Safety Archit

25、ect at Persona,suggests partnering with an onboarding specialist.Effectiveness in KYB processes can be measured by observing high completion rates and minimal drop-offs across regions during expedited onboarding.5THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEpor

26、T 2024With so many geopolitical,technological,economic,and societal transformations,all financial services processes have become more complex and difficult to manage including the KYC,KYB,and identity verification.That is why financial institutions and regulated entities look for efficient and effec

27、tive ways to reduce fraud,build trust,navigate regulatory and compliance requirements,cut costs,and stay competitive.Emerging technologies used in Kyc/KyB,and idV such as ai,blockchain,data analytics,biometrics,etc.cater to their needs,enabling fis to thrive.our report,Emerging Technologies and Tren

28、ds in Identity Verification,KYC,and KYB,aims to uncover the benefits and best practices of these techs and assist businesses in the learning process about the latest trends in digital onboarding and refining their strategies to select the best partner to support their endeavours.and since wisdom is

29、a process,as we embark on this journey of discovering these trends and techs,we encourage your active engagement and feedback on the content of our report to help us enrich it.also,we thank our esteemed contributors and partners who have helped us create this space of knowledge-sharing and active pa

30、rticipation.lets foster collaboration and dialogue as we explore the insights within.Enjoy the read!6THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024Table of ContentsforewordUnlocking the latest Trends in digital identity WalletsA Better Future for Identi

31、ty and KYC Whats New in Digital Onboarding in 2024|Mirela Ciobanu,The PaypersThe Movement Towards Trusted Digital ID Wallets|Nick Mothershaw,Open Identity Exchange(OIX)Digital Credentials and Wallets Whats the Big Deal?|Anne Bailey,KuppingerCole Analystsguarding Trust:strategies to combat deepfakes

32、and secure authenticityThe Vital Role of 3D Liveness Detection in Ensuring Customer Identification|Interview with Kevin Alan Tussy,FaceTecBusiness Boost:Expert Tips for seamless digital onboarding successEveryone is a Business Navigating the Evolving Landscape of Identity Verification|Jason Howard,C

33、afUnlocking Success:Best Practices for Cross-Border Digital Onboarding|Interview with Jeff Sakasegawa,PersonaNavigating the Digital Onboarding Maze:Challenges,Trends,and Best Practices in Business and Entity Verification|Will Charnley,Liminal3 7 8 14 16 18 19 21 22 24 26 Unlocking the Latest Trends

34、in Digital Identity WalletsThe rise of wallets and digital credentials represents a shift towards reusable identity-a massive change in the status quo.Anne Bailey,analyst at Kuppingercole analysts8THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024Man,it see

35、ms crazy that were doing all kinds of unbelievable things with science and technology and yet,the best way to prove who I am on the Internet is to take a photograph of my government-issued document and a selfie.RileyHughes,theCEOandCo-founderofTrinsicDespite investing in various fraud prevention and

36、 compliance solutions tools,businesses are still shouldering the burden of lost liability for fraud on their own balance sheets.SunilMadhu,Founder&CEOofInstntGenerative AI is the icing on the cake that most people havent built yet.SimonTaylor,HeadofStrategy&ContentatSardineThe surge in smartphone us

37、age,widespread internet accessibility,the rise of bigtech companies,the growth of ecommerce activities,and advancements in technology have fuelled the demand for seamless digital onboarding experiences in financial services.Customers and businesses alike now expect financial products and services th

38、at are accessible anytime,anywhere,and at minimal cost.however,the pursuit of rapid service delivery has also ushered in new challenges,particularly in combating fraud,ensuring data privacy and security,and maintaining regulatory compliance.For banks,fintechs,and PSPs,getting the digital onboarding

39、experience(implicitly the KYC and KYB processes)right fosters trust,enhances user experience,and serves as a competitive differentiator.Seamless digital onboarding based on cutting-edge technology solutions can attract and retain customers,driving loyalty and profitability.similarly,for smEs and bus

40、inesses eyeing global expansion,robust digital onboarding solutions are indispensable.By facilitating scalable and user-friendly onboarding experiences,businesses can effectively navigate cross-border complexities and offer a seamless user experience across multiple markets.however,achieving these d

41、esired outcomes is far from easy.A Better Future for Identity and KYC Whats New in Digital Onboarding in 2024Mirela Ciobanu,Lead Editor at The Paypers,specialises in Banking and Fintech trends.Passionate about digital assets,regtech,and fraud prevention,she advocates for data security and privacy.Co

42、nnect with her on LinkedIn or via email.The Paypers is a leading source of news and intelligence for the global payment community,offering insights to ecommerce,fintech,and payment professionals.Mirela Ciobanu Lead Editor The PaypersThe PaypersSeamless digital onboarding based on cutting-edge techno

43、logy solutions can attract and retain customers,driving loyalty and profitability.9THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024in essence,digital onboarding represents a delicate balancing act between contextual demands,operational challenges,and cust

44、omer expectations.success in this endeavour depends on how technology and human expertise manage to navigate the intricate web of regulatory requirements and technological advancements.This article will explore verifiable credentials and the application of reusable identity verification solutions.It

45、 will also examine the use of AI and data in identity verification(IDV),fraud prevention technologies,and the latest innovations in generative AI,considered a panacea for the Kyc process.The contextKeithMabbitt,ChiefCustomerOfficeratOneID,highlights severalchallenges that businesses encounter(especi

46、ally in the UK)when relying on traditional forms of identification for their Know Your Customer(KYC)processes.Firstly,the susceptibility to fraudulent documents poses a significant risk,as physical IDs can be easily tampered with.Moreover,traditionalmethodsareoftennon-inclusive,as approximately 13%o

47、f UK adults lack a passport and 25%do not possess a drivers licence,limiting access to certain services.additionally,the conventional Kyc process is characterised by a slowandcumbersomeexperience,involving the manual finding,scanning,and uploading of ID documents,followed by verification,either by s

48、oftware or human agents.This complexity not only leads to a slower onboarding process but also contributes to higher costs.consequently,the intricate and costly natureoftraditionalKYC procedures results in high abandonment rates,with approximately 68%of onboarding attempts being abandoned due to poo

49、r user experiences.financial services and regulated entities are also concerned about thehighleveloffraudandfincrime,especially with the emergence of genai.genai can generate fake id documents using techniques like image synthesis and data augmentation.Through image synthesis,genai algorithms learn

50、from datasets of existing ids to create realistic images resembling genuine documents.data augmentation involves modifying elements like backgrounds,text,fonts,and holographic features to produce diverse id samples.additionally,genai learns from genuine id templates to ensure new documents adhere to

51、 standardised formats and layouts.Verifying the authenticity of remote individuals has become crucial,particularly for high-risk use cases,such as in banking,employment,and legal proceedings.When done correctly,remote identity verification can confirm that an individual is the right person,a real pe

52、rson,and authenticate that person in real-time.however,this doesnt happen for free,as fraudandcompliancecostshaveescalatedsignificantly.Identity verification company,Alloyreportfinds25%offinancialcompaniessurveyedlostoverUSD1milliontofraud in 2023.also,theglobalcostoffinancialcrimecompliancetoppedUS

53、D274billionin2022,up from Usd 213.9 billion in 2020,says lexis nexis.The rising cost of compliance(especially for businesses that are expanding globally and that are scaling up operations)are also associated with complying with various and global KYC and KYB regulations that differ significantly acr

54、oss regions and countries.Verifiable credentials play a crucial role in establishing different levels of risk within the Know Your Customer(KYC)process.10THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024To mitigate fraud(and minimise friction during the on

55、boarding process),many financial institutions and regulated entities tap into data analytics solutions.But workingwithdata and making sure it is accurate,properly collected(according to different global legislations),and stored can be very challenging.an important aspect related to the use of data i

56、s complying with user data privacy and security.DataprivacyconcernshavebeenraisedbytheEUsArtificialIntelligenceAct(AIAct).The AI Act establishes a thorough regulatory structure for artificial intelligence,organising AI systems into different risk categories and imposing specific requirements on thos

57、e deemed high-risk.Remote biometric identification systems,particularly those integral to KYC processes,are expected to fall into the high-risk category outlined by the AI Act.This classification stems from their considerable impact on individuals privacy and data protection rights.The silver lining

58、To make up for these challenges,there have also been notabletrendsandbestpracticesintheKYC,KYB,andIDVspacethatequipbusinessestocontinuetheiroperationsandofferthebestdigitalonboardingandcustomerverificationexperience.Banks,fintech,and PSPs can navigate the complexities of digital onboarding and foste

59、r sustainable growth in the financial ecosystem by integrating advanced technologies(ai,ml,biometrics,blockchain,data analytics,graphs,nlp,etc.)and risk-based methodologies.Also,different global initiatives and standards(e.g.Open Banking,eIDAS 2.0,Open ID,ISO,W3C)are enabling the creation of differe

60、nt solutions that can be successfully used in IDV.Enter verifiable credentials Whatareverifiablecredentials?To manage passwords and logins,the concept of single sign-on(sso)was developed in the late 1990s.Single sign-on(SSO)is an authentication scheme that allows a user to log in with a single ID to

61、 any of several related,yet independent,software systems.Wikipediaone decade later,the idea of open authentication emerged.however,a crucial aspect missing from open authentication is trust.simply presenting an identity does not guarantee its authenticity or reliability.To address this issue,the Wor

62、ld Wide Web Consortium(W3C)*introduced two open standards:Verifiable Credentials and Decentralised IDs(DIDs).These standards aim to enhance trust in digital identities by enabling verification processes that go beyond mere presentation.Decentralised identifiers(DIDs)are a type of globally unique ide

63、ntifier that enables an entity to be identified in a manner that is verifiable,persistent(as long as the DID controller desires)and does not require the use of a centralised registry.WikipediaWhen referring to the formal W3C Verifiable Credential Data Model Standard,Verifiable Credential is written

64、with uppercase letters(VC).However,we also use lowercase(vc)when discussing verifiable credentials in a general sense.Verifiable credentials encompass a wide range of attestations issued by trusted parties,enabling users to access various services and resources throughout their lifetime.While one co

65、uld deepkafe a face and voice,or forge a passport,replicating typing cadence,habits,and unique quirks of users is challenging.*The World Wide Web Consortium(W3C)is an international community that works together for the long-term growth of the Web.11THE PAYPERS|EmErging TEchnologiEs and TrEnds in idE

66、nTiTy VErificaTion,Kyc,and KyB rEporT 2024Verifiable credentials serve as documents containing stored information,with schema definitions customisable to the users needs.These credentials typically include basic attributes such as name,email,phone number,and address,and can extend to encompass more

67、sensitive data like digital passport or drivers licence information.Taking a broader view,even a credit card aligns with the concept of verifiable credentials.Issued by a trusted entity like a bank,it can be authenticated by merchants and used for transactions,adhering to similar principles of valid

68、ation and authorisation.The proof is in the pudding-verifiable credentials use casesHealthcareThe concept of a medical staff passport is straightforward:its an identity wallet used by healthcare providers to validate their credentials.Initially,the focus is on verifying the providers identity agains

69、t official documents.Then,when obtaining medical credentials,these are cross-referenced to ensure accuracy,resulting in a higher level of trust in subsequent interactions.BankingIn October 2023,Instnt introduced Multipass,a solution that uses open standards like Verifiable Credentials and Decentrali

70、sed ID to offer decentralised,self-sovereign identity.Multipass integrates with banks and other businesses through a toolkit provided by Instnt.Once integrated,the app can receive,store,and send verifiable credentials with user consent.When a customer completes verification for a new account,Instnt

71、generates an electronic pass delivered to the users mobile device via the businesss application.Users accept and store the pass on their device while Instnt ensures its authenticity.Customers can selectively share information with businesses,plus,the pass serves as an authentication credential,elimi

72、nating the need for traditional passwords.EcommerceWhen a user browses a merchants website,such as Winelivery,to buy alcohol,the traditional process involves submitting documents like a drivers licence to prove their age.However,with verifiable credentials,users can simply present a pass.This pass,d

73、evoid of personal details like date of birth,serves as confirmation of approval from a trusted entity,such as a bank.Mapping different risk levels with verifiable credentials in the KYC processVerifiable credentials play a crucial role in establishing different levels of risk within the KYC process.

74、These credentials can be tailored to enable varying levels of assurance,which represent the certainty with which a claim to a particular identity can be trusted during authentication.For example,a verifiable credential may include information specifying the level of assurance or risk associated with

75、 the pass.In one scenario,the verification process may have confirmed only basic details such as name,email,and address,warranting a lower level of assurance,perhaps designated as level three.Conversely,for a different product or service,a more rigorous verification process may be conducted,includin

76、g verification of additional details like phone number and drivers licence,resulting in a higher assurance level,such as level five.12THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024Additionally,these verifiable credentials contain an expiration date time

77、stamp for the KYC envelope.This timestamp indicates when the individual was last verified and KYC-ed.After a certain period,the verification expires,necessitating re-KYC-ing.The issuer can define the duration of validity for the KYC verification.all pertinent information,including assurance levels a

78、nd expiration dates,is stored within the pass itself.Therefore,the infrastructure required involves both the capability to issue the pass securely and the means to store pass data securely within a mobile application or similar platform.The delicate balance between innovation and interoperability A

79、significant hurdle in achieving results with verifiable credential solutions is thedelicatebalancebetweeninnovationandinteroperability,according to RileyHughes,theCEOandCo-founderofTrinsic.many of these solutions are built on the W3C Verifiable Credential Data Model or a similar framework.The challe

80、nge lies in the conflicting objectives of speed and standardisation.on the one hand,when launching a product,theres a need to move quickly,iterate,and incorporate cutting-edge technologies to deliver the best possible product.on the other hand,achieving interoperability requires adherence to agreed-

81、upon standards,which can slow down the development process.This creates tension between the desire to innovate rapidly and the need for compatibility with other applications.some other challenges in adopting Vc mentioned by SunilMadhu,Founder&CEOofInstnt relate to several things like trust,taking re

82、sponsibility in case of fraud,vendor lock-in,etc.Trust is a very complex thing,as it is based on cultural and regional factors.people may not feel comfortable using their bank credentials to gain access to a website.in some countries,where people trust banks,they will be more likely to use a bank cr

83、edential.fraud insurance technologyAn ongoing concern in identity verification is the allocation of liability.When a trusted entity like a bank conducts the initial verification and a fraudulent transaction occurs later,who bears the responsibility for the losses?This disconnection between the verif

84、ication process and subsequent fraud incidents raises critical questions.To tackle this challenge,Instnt offers a solution:fraud insurance technology.They provide insurance protection,guaranteeing up to a hundred million dollars in aggregate for fraud loss insurance.This means that if an entity acce

85、pts a pass issued through instnt and fraud occurs,they are relieved of liability,as instnt assumes responsibility for the losses.The use of AI and data in identity verification(IDV)To enhance security and customer experience,companies need to be prepared to adopt technology.during a podcast discussi

86、ngthedisruptionsinKYC,simon Taylor,head of strategy&content at sardine mentioned that one key lesson he gleaned from his experience at sardine revolves around the importance of acquiring(more)data and ensuring its quality to consistently train and retrain superior ai models.Why data is important,esp

87、ecially in the context of using generative ai to perpetrate fraud?Because the most reliable signal currently is device and behaviour data as it is the most difficult to manipulate.While one could deepkafe a face and voice,or forge a passport,replicating typing cadence,habits,and unique quirks of use

88、rs is exceptionally challenging.obtaining more extensive and higher-quality data is essential because while many analyse typing cadence,other crucial factors may be overlooked.improving data quality and quantity is key to enhancing ai and data science models.13THE PAYPERS|EmErging TEchnologiEs and T

89、rEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024To acquire the necessary data,organisations may explore options like purchasing or sourcing data externally,or even generating synthetic datasets for training purposes.yet,the challenge lies not in building these datasets,but in maintaining their

90、 quality and relevance over time.simon underscored the importance of every organisation having its own dedicated data science and engineering teams,stressing the need to leverage both internal and external data sources effectively.in the realm of ai vendors,simon observed a tendency for many to oper

91、ate as black boxes,limiting transparency and hindering organisations ability to fully understand and use the underlying data.he emphasised the importance of explainability and fine-grained access to data,advocating for a more transparent approach akin to what organisations would develop in-house.con

92、clusionIn conclusion,the imperative for new,contemporary identity verification solutions rooted in open standards and an extensive use of data analytics(with enriched,explainable,and transparent data sets)cannot be overstated.The potential benefits of such advancements are manifold.For banks,fintech

93、s,and PSPs,optimising the digital onboarding journey not only cultivates trust but also elevates the overall user experience,serving as a potent competitive advantage.By streamlining onboarding processes with state-of-the-art technology,these institutions can attract and retain clientele,thereby bol

94、stering loyalty and profitability.similarly,for smEs and enterprises eyeing global expansion,robust digital onboarding solutions are indispensable.By providing scalable and intuitive onboarding experiences,businesses can adeptly navigate the intricacies of cross-border operations,ensuring a seamless

95、 user journey across diverse markets.14THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024The Movement Towards Trusted Digital ID WalletsNick is known for his in-depth knowledge of the identity industry,its challenges,and requirements,across various sectors.

96、As Chief Strategist of the Open Identity Exchange(OIX),an influential non-profit trade organisation with a global presence,Nick is leading the development of clear guidance around interoperable,trusted identities with organisations globally.NickMothershaw Chief Strategist Open Identity Exchange(OIX)

97、With the vast levels of fraud and related criminal activities that are now taking place globally,establishing trust in a person or business has become urgent.as such,Know your customer(Kyc)and Know your Business(KyB)processes are used to mitigate related risks and verify customer identities across m

98、any industries,not just financial.digital id development has been pivotal in this space.The way businesses and people prove who they are is evolving rapidly.Weve moved from talking about digital ID to prove who a person is,to talking specifically about digital ID wallets holding a variety of credent

99、ials proving a persons eligibility.for education,employment,or travel,for example.Theres been a shift in thinking from wallets that carry credentials where issuers verify the wallet owner before credentials are issued into them to wallets that are themselves trusted.When a key trusted ID credential

100、such as the EUs national ID card or UK credentials verified to a level of trust by certified ID Service Providers is placed securely within a wallet,it forms a trust anchor.The wallet becomes trusted.Trusted credentials from various sources,education credentials from universities,for example,can the

101、n be linked easily to the trust anchor and placed,stored,and managed in that wallet.The burden on issuers to establish trust in an individual before releasing credentials into their wallet is removed,making it easier to release credentials into the ecosystem.When these credentials are presented to r

102、elying parties from that wallet,the burden to ensure the credentials were issued legitimately is removed,because the wallet has already established the trust element.Extending trust frameworks to address the need for consistency Theres a separation between the storage of credentials and their presen

103、tation in a consistent format.for digital id to be interoperable across sectors and borders,with all parties fully engaging,digital id wallets must deliver many types of credentials in a consistent format.if relying parties cant consume them easily,their route to digital id adoption will be slower.A

104、ll markets have this gap and theres much still to do here.To ensure the consistency of personally identifiable data in its EUDI wallet,the EU has recognised the importance of consistent data schemas for different types of credentials.However,its yet to prescribe the format for other trusted credenti

105、als that will be vital to the ecosystem,like education or employment.Open Identity Exchange(OIX)15THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024programmes ensuring that credentials can be issued in a consistent format are needed,and trust frameworks,whi

106、ch provide the rules and guidelines around digital id,will play a vital role here.While frameworks do not need to go into great detail around the technical implementation of wallets,as is the case in the EU,they should be extended to support wallets,and more specifically,provide conditions to ensure

107、 credential issuer presentation consistency.This will ensure interoperability can be achieved across the ecosystem.governments can play a valuable role here by developing robust trust frameworks.Wallets,however,should be developed by the private sector.creating,managing,and evolving wallets that acc

108、ept multiple types of credentials is complex and costly.it goes beyond what any government does today.The focus for governments should be ensuring that only framework-approved private sector wallets hold government credentials.This would help alleviate privacy concerns about governments monitoring c

109、itizens movements through wallets.The smart elementTrusted digital ID wallets will be a game-changer in digital onboarding processes,but we believe they must be smart to ensure end-user engagement.The EUDI wallet is progressing quickly,but its not yet a smart wallet.Users will need help to understan

110、d which credentials,or parts of a credential,are needed,whats missing,and how to obtain them,to prove they are who they say they are.These are complex requests and users will need guidance through the process.similarly,relying parties onboarding users digitally will need guidance to process complex

111、transactions.Theres a market opportunity here for a new smart agent role.Certified wallet providers can focus on the storage of credentials in wallets,but the processing element-what credentials users have or need,and how they are presented could be done through smart agents interacting with users o

112、n behalf of relying parties.conclusionThe UK is extending its trust framework to enable certified private sector wallets,recognising wallet providers as separate from id providers.Theres still a need for consistency and well be calling this out with governments.digital id wallets are complex,as are

113、the digital id transactions they enable.To ensure digital ids are widely adopted,we need to make sure they are easy to consume.Ultimately,trusted wallets are where the EU and the UK are heading,albeit through different wallet provider strategies.This subtle shift in thinking from wallets to trusted

114、wallets will prove a crucial one in the mission to establish trust inclusively,easily,and confidently.16THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024Digital Credentials and Wallets Whats the Big Deal?Anne Bailey,who combines political,economic,and cult

115、ural expertise,contributes to KuppingerCole Analysts,a global IT analytics firm specialising in digital identity management and cybersecurity.She champions innovative ideas from her non-profit work in sub-Saharan Africa and enriches discussions at prestigious events worldwide.Anne Bailey Analyst Kup

116、pingerColeThere is a clear trend of issuing and using digital credentials as part of our interactions,both in the digital world and supporting us in the physical world.These interactions are varied:access to government services,opening a bank account,digitally signing documents,payments,and the issu

117、ance,storage,and presentation of things like eprescriptions,travel documents,educational credentials,employment credentials,and much more.Inherent in such interactions is identity verification.Verification means examining the digital credentials being presented and who they are being presented by.Th

118、is is done to establish that the correct,valid,and trustworthy credential that represents the specific,real,and non-spoofed individual is present for an interaction.Even in our digital age,a high-assurance verified digital identity is not a given.Through a variety of methods,individuals can prove th

119、eir identity digitally.When verification is valid for only a single transaction,the individual often needs to complete the full identity verification process for each transaction.Some solutions provide access to reusable digital identity which can sometimes be verified to a high level of assurance b

120、ut often is not.A reusable,verified digital identity:the European effort The European effort to spin up a reusable,verified digital identity ecosystem is spearheaded by the eIDAS 2.0,the proposed amendment to the eidas regulation no 910/2014 which aims to enable the use of digital identity for publi

121、c services and private business in a harmonised EU digital market.The eIDAS 2.0 is more than just a regulation to comply with its an opportunity for individuals to hold government-issued digital ids that can be used across borders in the EU,give consent to share select portions of their personal dat

122、a,and know exactly who they have shared that data with.it is an opportunity for public and private organisations to interact with citizens,customers,partners,and employees digitally,utilising this personal data that is verified and highly trusted.KuppingerColeEUDI wallets bring an important element

123、of trust to the emerging digital wallet market by pioneering the certification of wallets and the credentials issued by EU Member States.17THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024a tenant of the European digital identity goals is that individuals

124、hold their government-issued digital identity themselves,stored in a digital wallet.The European digital identity(EUdi)wallet concept enables the issuing,holding,and sharing of digital identity required by eIDAS 2.0.EUDI wallet solutions are to be made available by each Member State of the EU,indepe

125、ndently certified at a national level and to EU-wide harmonised cybersecurity standards and others like gdpr.The advantage of EUdi wallets over other wallet solutions is that the citizen can hold a high-assurance,government-issued identity document for use in public service and private industry,even

126、tually in any EU member state.EUdi wallets bring an important element of trust to the emerging digital wallet market by pioneering the certification of wallets and the credentials issued by EU member states.multi-wallet,multi-credential reality of course,EUdi wallets will not be the only wallets in

127、existence.actually,they are relatively late to the digital wallet market,with major tech vendors already seeing relatively strong adoption.We already exist in a multi-wallet,multi-credential reality,which will only intensify before consolidating around a few preferred wallet solutions.The multi-wall

128、et reality will increase over the next several years as the EUdi wallets roll out,as mobile driver licences become more widely available globally,and as businesses learn to leverage a bring-your-own-ID(BYOID)approach for all types of users consumers,customers,employees,partners,suppliers,and contrac

129、tors.This will create an influx of wallet providers,some certified as EUDI wallet providers,some finding large-scale adoption through excellent user experience and frequent applicability.individuals in their various roles as citizens,consumers,and employees will collect wallets as they need them,but

130、 will likely not enjoy the experience of trying to understand which wallet they can use in each transaction their goal being to simply complete the transaction as quickly as possible.Therefore,the next phase is wallet consolidation,where individuals develop preferences for particular wallets.Wallets

131、 that will succeed during the consolidation phase must be widely applicable,allowing individuals to use them in the ways that are most important to them from travelling to accessing public services to signing up for new online services.These wallets must also meet high-security standards while deliv

132、ering excellent user experience.Some wallet solutions will be certified EUDI wallets,but not all.Given concerns around interoperability and data protection,the industry-provided wallets will likely not be EUDI certified.This will sharpen the growing competition between Big Tech digital wallets that

133、create lock-in for users and organisations,and other more open and interoperable wallet solutions.Emerging mobile driving licence standards will further complicate the wallet landscape,depending on which types of digital wallets they may be issued to.a new status-quo overall,the rise of wallets and

134、digital credentials represents a shift towards reusable identity-a massive change in the status quo.This shift reduces the need for one-time verifications,changes the business models of identity verification,and streamlines many processes that require high identity assurance.Wallets that can be issu

135、ed verified government-issued digital identities will be pivotal to this shift to digital credentials.Wallets that will succeed during the consolidation phase must be widely applicable,allowing individuals to use them in the ways that are most important to them.Guarding Trust:Strategies to Combat De

136、ep-fakes and Secure AuthenticityProving liveness means the physical user is present at the exact moment biometric data is captured with extremely high confidence,remotely.KevinAlanTussy,cEo of faceTec19THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024Found

137、er and investor,Kevin builds businesses that create global value.Most noteworthy,FaceTec is a leading biometric cybersecurity firm he founded in 2013 that enables frictionless biometric account security on billions of existing devices.A foremost expert in anti-spoofing technology,he holds numerous p

138、resentation attack detection-related patents.KevinAlanTussy CEO FaceTecWhat are some key decisions from the past five years you attribute to your current leading position as a KYC and face verification software provider?We first objectively questioned the legacy narrative that credentials and crypto

139、graphy are deterministic and can identify users.They cannot.There is always the chance the user holding the device or credentials isnt the person they were issued to,its a cloned device,or an impostor had new keys issued to a parallel device.adding factors reduces impostors using credentials,but the

140、y never positively identify the correct user.This led to understanding biometrics critical role and the need for 3d liveness detection.We arent authenticating devices:proving liveness means the physical user is present at the exact moment biometric data is captured with extremely high confidence,rem

141、otely,and unsupervised.Further,we deploy software,not a cloud service,that runs inside our customers firewalls,so no biometric data is sent to FaceTec.This privacy-by-design ensures adherence to ever-changing,global privacy frameworks.faceTec maintains the industrys only spoof bounty program.What do

142、es it do,why did you do it,and how has it contributed to faceTecs market position?We were the first to test with a NIST-certified,independent lab,but testing was and still is indefensibly inadequate.Its imperative to know where and how our systems might be attacked in the real world before any custo

143、mers do.The only global,public,ongoing spoof bounty program is the ultimate way to learn in real-time what the state of the art in attacks are.launched in october 2019,and after more than 150,000 attacks,were still the only vendor with a spoof bounty program.most dont even have publicly available de

144、mos!We invite attacks,believing if we arent strong enough to defend our own bounty then we shouldnt sell to other companies.in fact,no Liveness vendors should without the confidence their Liveness can stand-up a spoof bounty program.NIST 2D Liveness pad test results reveal why those vendors cant hav

145、e a program.all 42 2d vendors were spoofed in every artifact category by basic pad attacks.faceTec hasnt paid a bounty in over three-and-a-half years and has had zero successful spoofs accepted in recent 3d liveness nisT-lab pad testing.FaceTecKevinAlanTussy,CEOofFaceTec,speaksabouttheroleofbiometri

146、csandthecriticalneedfor3DLivenessDetectiontopositivelyidentifyusers.20THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024click here for the company profile3d face liveness is an advanced technology with a foundational role in the emerging digital identity in

147、frastructure.how does faceTec approach making it accessible to a diverse user base?First,three technology characteristics make our systems globally deployable.Our software is exceptionally efficient,universally compatible with billions of smart devices and webcam-enabled computers,and runs flawlessl

148、y on all major operating systems.our ai models only require a 0.3 mp-plus camera,an approximately 4 mB device sdK,and a 350 KB 3d facescan payload for the highest-confidence liveness detection and biometric matching.This enables deployments in markets with very inexpensive devices and slow networks,

149、allowing us to process over 2.4 billion-and-growing liveness checks annualized,even in difficult rural areas and on cruise ships.secondly,our face data training set is arguably the most diverse.Volunteers providing face data from multiple devices in multiple,diverse scenarios allow human face consta

150、nts and variables to be learned from 180-plus countries,ensuring our technology isnt hindered by ai models trained on homogeneous 2d face photos.importantly,our liveness and biometric face matching are 3d.2d cameras struggle to accurately represent the human faces 3D shape because of inconsistent pe

151、rspective distortion from flattening 3D features.2D guesses about how faces are really shaped can increase errors.2d must rely on less consistent characteristics,including skin tone and color saturation.darker skin reflects less light than lighter skin,effectively reducing measurable data,increasing

152、 match error rates.2D can affect demographic results from young people,females,and wearing makeup or glasses.Budget,privacy,cybersecurity,internal resistance,and executive buy-in are considered the most imposing digitization obstacles.how have you helped customers overcome implementation challenges?

153、faceTec provides self-hosted software with no third-party data privacy and security concerns.faceTec doesnt require end-user biometric data to be sent to us,fundamentally different from centralized,cloud-based processors,like most KYC services.in addition to privacy-by-design architecture,we only ch

154、arge for 3d liveness checks.all other idV/Kyc features are free for unlimited use,including photo id scans,text ocr,nfc chip reading,barcode scans,and 1:n for de-duplication and bad-actor face bans.our software is a fraction of the fraud and brand damage costs customers could experience without it.R

155、esistance to 3D Liveness-proven biometrics,or those handcuffed to legacy thinking,should study the recent attacks on Okta and mgm.They could only have been stopped by biometrically exposing the impostors who had the right credentials.if those dont change minds,the coming tsunami of infinitely scalab

156、le GenAI-powered deepfakes trained as social engineers will.The legacy cybersecurity establishment can no longer afford to ignore that they do not provide positive user identification.Each hoop added only slightly reduces the impostor risk,creating a false sense of security.liveness-proven biometric

157、s are necessary,and faceTec will continue to provide the worlds best privacy-preserving face biometrics.Proving Liveness means the physical user is present at the exact moment biometric data is captured with high confidence,remotely,and unsupervised.Business Boost:Expert Tips for Seamless Digital On

158、boarding SuccessThe rise of decentralised finance(DeFi)and blockchain technology is further blurring the lines between KYB and KYC.In this new world,to strike the right balance between maintaining a good user experience and a seamless onboarding process,the need for progressive profiling is paramoun

159、t.JasonHoward,cEo of caf22THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024In the realm of identity verification,the distinction between Know Your Business(KYB)and Know Your Customer(KYC)has traditionally been clear-cut.KyB focuses on verifying the identit

160、y of corporate entities,while Kyc is centred around authenticating individual customers.however,the two realms are becoming increasingly blurred.one big reason for this is the drastic rise of online marketplaces and the platform economy.in many ways,the digital world has become one big marketplace.c

161、onsumers no longer simply go to one website or another to purchase goods and services,but in marketplaces that facilitate shopping from many different sources.These are also forums where people share information and interact with one another in a digital environment and often transact with other con

162、sumers,not just businesses.These platforms have added great convenience to the modern digital economy,but if they are to work properly,trust must be paramount.in a platform world where every person is potentially a business,the lines between KyB and Kyc and the nature of who and what is a business b

163、ecome increasingly hard to define.Platforms that facilitate these transactions must have stringent identity verification protocols in place,given the modern environment where everyone can potentially be a business.at the same time,they must also ensure that they are complying with all relevant payme

164、nts and data regulations across the globe.regulatory requirements will only continue to evolve,placing greater emphasis on comprehensive due diligence and risk management practices.regulators are increasingly scrutinising the integrity of business relationships and the transparency of corporate stru

165、ctures,necessitating a more holistic approach to identity verification.Moreover,the rise of decentralised finance(DeFi)and blockchain technology is further blurring the lines between KYB and KYC.Blockchain-based identity solutions offer decentralised and immutable methods for verifying identities,en

166、abling secure and transparent transactions without relying on traditional intermediaries.as blockchain ecosystems continue to mature,businesses are exploring innovative approaches to identity verification that transcend traditional boundaries and facilitate seamless interactions in the digital econo

167、my.all of this innovation has brought a great deal of convenience to online commerce,but it has also introduced its own set of fraud and cybercrime risks and the need to have strong onboarding and authentication controls in place.Everyone is a Business Navigating the Evolving Landscape of Identity V

168、erificationJason Howard,CEO of Caf,brings extensive experience in the identity industry,previously serving at Ethoca before its acquisition by Mastercard.Caf,founded in 2019,offers cutting-edge identity verification solutions trusted by leading customers across various sectors.Their KYE platform int

169、egrates advanced technologies for automated customer onboarding,KYC,KYB,fraud prevention,and authentication.JasonHoward CEO CafCafIn a platform world where every person is potentially a business,the lines between KYB and KYC and the nature of who and what is a business become increasingly hard to de

170、fine.23THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024click here for the company profileThe power of progressive profilingin this new world,to strike the right balance between maintaining a good user experience and seamless onboarding process and fightin

171、g fraud and being compliant,the need for progressive profiling is paramount.This strategy involves incrementally collecting information from users as needed,only requesting detailed information as necessary.Progressive profiling enables a better customer experience,due to its streamlined approach to

172、 collecting user information,thus leading to less abandonment and quicker time to revenue.it is also conducive to greater regulatory compliance.By collecting only the necessary information required for specific transactions or interactions,businesses can minimise the amount of sensitive data stored,

173、reducing the risk of non-compliance with privacy laws.Additionally,progressive profiling allows users to control the information they share,enhancing transparency and accountability in data processing practices.Progressive profiling also enables businesses to analyse user behaviour patterns and dete

174、ct anomalies that may indicate potential fraudulent activity.By monitoring changes in user behaviour,such as sudden spikes in account activity or unusual transaction patterns,organisations can flag suspicious behaviour and take proactive measures to prevent fraud.This approach also enables digital b

175、usinesses to adapt and tailor authentication methods based on the potential risk of each user.This not only enhances security but also enables more personalised user journeys.Ultimately,progressive profiling improves the user experience and increases onboarding rates while enabling companies to dete

176、ct and stop fraudulent activity.The future of identity verificationThe notion of identity in the digital world is constantly changing.We all interact with businesses,with marketplaces,with platforms and with each other in the online realm in vastly different ways.Your digital identity on one platfor

177、m may be different than what it is on another.This becomes especially true as we transition further into a Web3 world.Web3 can be described as a decentralised,user-centric,and interconnected concept of the internet that leverages distributed systems to redefine how we interact,share information,and

178、conduct online transactions.in Web3,data is distributed and controlled by users in a network using decentralised technologies such as blockchain and peer-to-peer networks.Thats why we believe the future of digital identity will be decentralised.This approach aims to establish limits on the dissemina

179、tion of personal information on the internet.Additionally,it benefits consumers by simplifying the authentication process,eliminating the need for repeated verifications when accessing different platforms.Decentralised identity not only strengthens digital security but also enhances the user experie

180、nce in an increasingly connected landscape.Since we interact online with businesses and each other in so many ways,our digital ID on one platform may be different than what it is on another.24THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024first,who are t

181、he main actors involved in the process of cross-border digital onboarding and what are their main objectives?Compliance teams come to mind first,given their job of performing sanction screens and executing Know Your Business(KYB),Know your customer(Kyc),and due diligence processes.your legal team wi

182、ll be involved in constructing terms of service and consulting on any external communications.Youll also usually work with a growth or product team.These folks will generally help build a customer-facing onboarding flow reflective of the work that compliance and legal provide guidance on.Finally,cus

183、tomer support is important for assisting users during and after onboarding.With all of these teams sitting in different areas of the business,you can already see the benefit of having a single source of truth for whats working and what isnt,so any onboarding challenges are properly managed.What are

184、the main challenges of cross-border digital onboarding for stakeholders?at a macro level,theres always the challenge of localisation and staying on top of market trends when you get started in a new country or region.This doesnt pertain just to the language,regulations,and customs,but also to knowin

185、g the business environment and accounting for its nuances.While that may seem obvious,i also see the trend of meeting this challenge via vendor partnerships that have that local knowledge built in or configurable.That way,youre not starting from the ground level.As a compliance team,you can see what

186、 comes out of the box and probe further on compliance with local KyB laws,for example,and how Ultimate Beneficial Owners(UBOs)are onboarded.for the growth team,theres always the challenge of losing technical,legal,and compliance resources post-launch.its inevitable.This underscores the importance of

187、 having a process in place for viewing the same dashboards or automating as much as possible before customer support or even finance needs to step in.JeffSakasegawa is Personas Trust&Safety Architect.With over a decade of experience in the trust and safety space across companies such as Google,Faceb

188、ook,Square,and Sift,Jeff is an expert on risk management and compliance.He is passionate about ensuring safe online experiences for all users.JeffSakasegawa Trust and Safety Architect PersonaPersonaChallenges with digital onboarding in different jurisdictions can be met via vendor partnerships that

189、have that local knowledge built in or configurable.JeffSakasegawa,TrustandSafetyArchitectatPersona,sharesbestpracticesfordigitalonboardingacrossjurisdictions.25THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024lastly,customers will use or break the product

190、in ways i never anticipated.so,the challenge in those situations is maintaining a strong compliance or fraud posture in a way that doesnt negatively impact your customer support team or stifle growth.how can an integrated Kyc/KyB solution overcome those challenges?my one-word answer is scalability.i

191、n my experience,Kyc and KyB policies and procedures in new jurisdictions are often patched together,disparate systems.its an unideal solution thats workable for launch but may quickly overtax your team.you need a deeply integrated solution that helps you scale because ideally,your launch is successf

192、ul and shows associated spikes in activity.integrated solutions can help you manage volume and safely and securely onboard users and businesses.if you hacked your KYC/KYB solution together,you may inadvertently turn off users just as quickly as youve attracted them to your platform.How do you evalua

193、te the effectiveness of an integrated KYC/KYB solution for cross-regional digital onboarding?At a high level,your KYC/KYB solution is effective if the user experience is seamless.Effectiveness can be evidenced when people are onboarded in an expedited fashion,your completion rates are high,and there

194、 isnt a lot of drop-off across regions.Or,if you do have drop-off,youre able to quickly test and deploy new flows.All this makes the product and growth teams happy.low support volume relative to what was forecasted could be another success metric.lastly,if you exceeded your onboarding numbers and ar

195、ent seeing associated fraud or closed accounts,thats a win for your compliance team.This achievement should be easily trackable with an integrated solution.can you provide insights gained from scaling digital onboarding initiatives across diverse jurisdictions?Many times,Ive found failure in those p

196、atched-together KYC or KYB onboarding flows I mentioned previously.In those moments,i wonder if my solution provider simply cant do what i need,especially when they arent providing support and transparency into their product roadmap in a way that comforts me and my team.a strong onboarding partner i

197、s critical because all of the adjustments that can expedite conversion and grow your business should be ones they can help you with.your partner should be in the trenches with you coming up with solutions and testing and learning if paper IDs have high failure rates or UBOs arent completing their fl

198、ows,just to share a few examples.Even better is having an onboarding partner who can orchestrate your identity processes,so you dont have to worry about integrations or performing deep investigative work when somethings not working.having just one conversation around what youre seeing can greatly ex

199、pedite resolution so you can focus on growing your business and preparing for the next launch.click here for the company profileBuild a unified KYB case viewRun Business ChecksBusinessCollect Business InfoApprove/DeclineManual Review CompleteOutreach to Beneficial OwnersRun KYCChecksStreamlined KYC-

200、KYB OnboardingINVESTIGATECOLLECTAUTOMATEENRICHVERIFYENRICHVERIFYINVESTIGATECollect Individual InfoAUTOMATECOLLECT26THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024Digital transformation has revolutionised the financial landscape,offering unprecedented con

201、venience and accessibility to consumers and businesses worldwide.Yet,this shift towards digital channels has introduced significant challenges,particularly for Business and Entity Verification(BEV).Essential for ensuring compliance with Know Your Customer(KYC)/Know Your Business(KYB)and Ultimate Ben

202、eficial Owner(UBO)regulations,BEV plays a critical role in the banking,payments,and fintech sectors.However,as regulatory expectations evolve and customer demands rise,financial institutions must contend with the complexities of digital onboarding,balancing regulatory compliance with seamless custom

203、er experiences.Traditionally,banks,payment providers,and fintechs managed BEV internally through in-house compliance teams,relying on manual processes for verification.Recent developments,such as establishing the Global Legal Entity Identifier Organisation(glEif)and introducing UBo registries by ent

204、ities like the financial crimes Enforcement network(fincEn),signify positive changes in the regulatory landscape;however,solution seekers cannot rely on them solely to meet their demands.Despite these developments,business verification challenges persist.A recent Liminalmarketstudy found that banks,

205、payment providers,and fintechs engage in high levels of manual review,with 58%indicating that over a quarter of their verification processes require manual intervention.stale business records pose compliance and fraud risks,with 88%of respondents citing outdated or inaccurate data as a primary drive

206、r of complications.access to global business data remains problematic,leading to an 86%increase in onboarding times for cross-border businesses.Customer demand for business and entity verification solutions is evolving,too.In the same research report,liminal found that 90%of customers want to use BE

207、V solutions for fraud detection and seek comprehensive solution capabilities beyond mere compliance.While government initiatives offer opportunities,customers lean toward third-party solutions,highlighting the need for efficient and effective vendor product capabilities.Navigating the Digital Onboar

208、ding Maze:Challenges,Trends,and Best Practices in Business and Entity Verification Will Charnley is the Managing Director at Liminal,where he leads strategic oversight and executes critical business initiatives that help customers navigate the digital identity landscape.Liminal is a market intellige

209、nce and advisory firm specialising in digital identity,financial crime and compliance,and cybersecurity solutions.WillCharnley Managing Director LiminalLiminalBanks,PSPs,and fintechs engage in high levels of manual review,with 58%indicating that over a quarter of their verification processes require

210、 manual intervention.27THE PAYPERS|EmErging TEchnologiEs and TrEnds in idEnTiTy VErificaTion,Kyc,and KyB rEporT 2024In addition to rising challenges,financial institutions compliance costs have escalated significantly;according to a 2022reportbyFenergo,financial institutions in North America,Europe,

211、the Middle East,and Asia incurred over USD 4.2 billion in fines related to anti-money laundering(aml)compliance.Balancing regulatory compliance with a smooth customer experience is essential,as cumbersome verification processes can deter customers,resulting in higher abandonment rates.The increasing

212、 complexity of onboarding,driven by global regulatory tightening and stricter UBO identification standards,has made operations less efficient,affecting 84%of buyers with longer onboarding durations.Furthermore,the growth of cross-border transactions intensifies these challenges,with 86%of financial

213、institutions noting longer onboarding times for cross-border entities,per Liminals data.Banks,payment providers,and fintechs embrace emerging technologies and best practices in KYC/KYB to address these challenges.One such trend is adopting advanced technologies,such as artificial intelligence(AI)and

214、 machine learning(ML),to automate and streamline BEV processes.According to our research,80%of financial institutions invest in AI-driven solutions to enhance compliance and reduce manual intervention.another key solution is the implementation of risk-based approaches to BEV,wherein institutions ass

215、ess the level of risk associated with each customer and tailor their verification processes accordingly.By focusing resources on high-risk customers while simplifying the onboarding journey for low-risk individuals,financial institutions can achieve a balance between compliance and customer experien

216、ce.Using biometric authentication methods,such as facial recognition and fingerprint scanning,can enhance security while improving the user experience.To optimise digital onboarding processes for BEV,financial institutions can enhance their approach by integrating technology and adopting best practi

217、ces for risk-based strategies.The key to this optimisation is creating a seamless omnichannel experience that allows customers the flexibility to choose their preferred onboarding channels.Beyond this,institutions need to focus on the quality of their data,prioritising the freshness and reliability

218、of sources,especially from vendors.selecting vendors with expertise aligned with the institutions regional or vertical markets can also significantly improve onboarding accuracy and effectiveness.furthermore,evaluating vendors ability to enrich incomplete datasets is critical.implementing robust dat

219、a governance and leveraging analytics can further refine these processes.Collaboration and information sharing within the industry are vital,keeping institutions abreast of new threats and regulatory shifts enabling them to adjust their compliance strategies swiftly and effectively.The BEV market is

220、 poised for significant growth,with a forecasted Total Addressable Market(TAM)of USD 5.5 billion by 2028,representing a compound annual growth rate(cagr)of 6.1%.automation,ai/ml advancements,integrated identity platforms(iips),and continuous Kyc/KyB are key market trends shaping the future of BEV.in

221、 evaluating the vendorlandscape,its clear that comprehensive BEV solutions are in demand.however,many vendors need more robust automation,better data quality,and a more substantial global presence.The top point solution players in this space offer robust fraud and KYC solutions,while larger platform

222、 companies outperform point solutions in meeting customer demands for more product capabilities.A key solution is the implementation of risk-based approaches to BEV,where institutions assess the level of risk associated with each customer and tailor their verification processes accordingly.For the l

223、atest edition,please check the Reports sectionDont Miss the Opportunity of Being Part of Large-Scale Payments Industry OverviewsThe Paypers releases annual reports covering global trends in payments and fintech,including instant payments,A2A payments,Embedded Finance,Open Finance,payment methods,fin

224、ancial crime,regtech,Banking-as-a-Service,regulation,fraud prevention,and digital identity.The reports feature insights from industry experts worldwide,including consultants,policymakers,service providers,merchants,banks,PSPs,technology companies,and fintechs.Additionally,the guides offer listings a

225、nd advertorial options for effective global company exposure.Insights into Payments and BeyondEndorsement partner:Key media partner:The Open Revolution:From Open Banking to Open FinanceThe Road to Open Data ContinuesOpen Finance Report 2023Global Payments and Fintech Trends Report 2024Insights into

226、Payments and BeyondThe Paypers Global Payments and Fintech Trends Report 2024The Global Payments and Fintech Trends Report 2024Insights into Payments and BeyondEndorsement partners:Key media partners:Embedded Finance and Banking-as-a-Service Report 2023Unlocking New Business Models for the Future of Financial ServicesFinancial Crime and Fraud Report 2023Best Practices in Fraud and Risk ManagementInsights into Payments and BeyondEndorsement partners:Key media partners:Embedded Finance and Banking-as-a-Service Report 2023Financial Crime and Fraud Report 2023