Juniper Research’s latest study analyzes the transformative role of Artificial Intelligence (AI) in reshaping identity verification, predicting significant cost savings for banks and a major shift in the realm of digital onboarding.
Summary
The study on the evolution of digital AI verification: a transformation in the world of banks
The study reveals a significant reduction in the average time spent on digital onboarding verifications from more than 11 minutes in 2023 to less than 8 minutes by 2028, with a significant increase in efficiency of 30%.
This change is attributed to the increasing accuracy of AI, which leads to a substantial decrease in identity checks requiring human intervention and eliminates the need to retake photos during verification. In addition, AI emerges as a formidable defense against emerging threats, particularly synthetic identity fraud.
As AI becomes more accurate, the study predicts a tangible decrease in cases where identity checks require human review, ultimately reducing verification time and associated costs.
This technological advancement not only streamlines operations, but also strengthens the system against evolving threats, positioning AI as a sentinel against the specter of synthetic identity fraud.
Despite the expected reduction in costs per digital identity check, the study predicts a paradoxical trajectory of onboarding fees. Increased check volume, especially in developing regions, is expected to offset this efficiency gain.
As a result, Juniper Research predicts a 34% increase in total bank onboarding spending from $7.4 billion in 2023 to $9.9 billion in 2028.
Michael Greenwood, author of the report, explains:
“Growth will be particularly robust in developing markets, where the proliferation of smartphones is catalysing the accessibility of mobile banking, facilitating digital onboarding.
To exploit this potential, verification service providers must move towards developing onboarding processes that move away from traditional credit scores, emphasising alternative checks, such as mobile operator history, to optimise profitability in emerging regions.”
The benefits for banks
In the wake of this transformative era, in which AI becomes the mainstay of identity verification, it is imperative to emphasize the multiple benefits banks can gain.
In addition to the obvious reduction in onboarding time and associated costs, the integration of AI into identity verification processes promises increased security measures.
The technology’s ability to discern patterns and anomalies significantly strengthens defense against a spectrum of frauds, with a focus on countering synthetic identity fraud, an increasingly prevalent problem in the digital landscape.
When financial institutions embrace AI to navigate the evolving terrain of identity verification, the paradigm goes beyond simple efficiency gains.
The symbiotic relationship between AI and human oversight emerges as a powerful strategy in which AI simplifies routine verifications, freeing human agents to focus on complex cases that require nuanced judgment.
This harmonious collaboration not only increases operational efficiency but also elevates banks’ overall security posture.
The firm’s prediction of a 30% reduction in verification time underscores the key role of AI in easing the burdensome onboarding process.
Customers, in turn, experience a more streamlined and frictionless interaction, fostering a positive user experience, a crucial factor in an era when digital onboarding is a cornerstone of customer engagement.
Although the trajectory predicts a surge in digital onboarding spending for banks, it is imperative to analyze the factors behind this paradox.
The increasing volume of checks, especially in developing markets, underscores the democratization of financial services facilitated by the proliferation of smartphones. This presents an opportune moment for check service providers to recalibrate their strategies, prioritizing checks that go beyond traditional credit scores.
Future prospects
Emphasis on alternative checks, such as mobile operator history, becomes critical to maximizing profitability in emerging regions, where these unconventional metrics can offer a more nuanced understanding of an individual’s financial reliability.
Looking forward, the digital identity verification landscape looks set to continue to evolve.
Juniper Research’s research suite serves not only to provide a comprehensive snapshot of the current state, but also to guide financial institutions through upcoming changes.
The “Competitor Leaderboard” embedded in the research suite provides a strategic roadmap, helping banks identify the key players driving innovation in digital identity verification.
In conclusion, Juniper Research’s comprehensive research suite leads the way in assessing the digital identity verification market.
With comprehensive analysis and forecasts covering more than 82,000 data points in 60 markets over five years, it includes a “competitor ranking” and a meticulous examination of current and future market opportunities.
This is a milestone in understanding the dynamic landscape of artificial intelligence-driven digital identity verification, with far-reaching implications for the financial industry.
