In its study “The New Imperative: Digital IDs,” Regula, a global developer of forensic devices and identity verification solutions, reveals that most organizations globally anticipate a notable reduction in identity fraud after implementing digital IDs. However, the study also highlights varying expectations across different regions regarding the extent of this decrease in fraudulent activity.
“Digital IDs are set to transform how transactions and customer data are secured, addressing both current vulnerabilities and anticipating emerging threats. The implementation of digital ID is not merely an upgrade, it is a critical evolution that offers a strategic edge in the ongoing battle against fraud.”
Forrester Consulting, commissioned by Regula to conduct the 2024 study, points out promising global expectations for fraud reduction through the implementation of digital IDs within organizations’ identity verification (IDV) processes. Globally, the largest group of respondents, 27%, expects a reduction in fraud of 20% to 29%. Additionally, 25% foresee a decrease in fraud of 30% to 39%, while 14% expect a reduction of 40% to 49%.
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Regional Insights
- North America shows higher expectations, with 36% of organizations expecting a 20% to 29% reduction in fraud, surpassing the global rate. However, a more cautious 18% anticipate a 30% to 39% reduction, indicating a skeptical outlook compared to the global average.
- Europe aligns closely with global trends, with 26% of respondents expecting a 20% to 29% reduction in fraud. Slightly higher hopes are seen as 16% foresee a 40% to 49% reduction in fraud.
- The Middle East presents a more varied perspective. Only 18% anticipate a 20% to 29% reduction, indicating a conservative outlook. Conversely, a significant 35% expect a 30% to 39% reduction in fraud, showcasing a higher level of confidence in the impact of digital IDs.
Surge in Identity Threats
The Forrester Consulting study highlights: “Digital IDs are set to transform how transactions and customer data are secured, addressing both current vulnerabilities and anticipating emerging threats. The implementation of digital ID is not merely an upgrade, it is a critical evolution that offers a strategic edge in the ongoing battle against fraud.”
It’s not news that organizations have to deal with a constant surge in identity threats. For instance, Regula’s global survey conducted in 2023 revealed that every fourth bank had experienced over 100 identity fraud incidents in the previous year. The median cost of the identity fraud the Banking sector had suffered was found to be over $310,000. With the rising number and growing sophistication of identity threats, this financial burden has also grown during the past years.
That survey also revealed that the most prevalent form of fraudulent activity experienced by organizations was the use of fake or modified physical documents. Still, the most alarming threat was the rise of AI-generated identity fraud like deepfakes, with 37% of organizations experiencing deepfake voice fraud and 29% falling victim to deepfake videos.
“The results of the Forrester Consulting study prove that there is a strong belief in the effectiveness of digital IDs in enhancing security measures. That is true to a certain extent. For example, by verifying the authenticity of issuing certificates and digital signatures, it is rather reliable to prove the authenticity of a digital ID. But no form of ID, physical or digital, can ensure that you are dealing with a genuine person or even a person at all. Sophisticated identity fraud, including deepfakes and other AI-generated threats, is evolving rapidly, and to address this challenge, we need continuous advancements in fraud detection technologies and adaptive security measures,” says Ihar Kliashchou, Chief Technology Officer at Regula.
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