As digital identity continues to climb, expectations for security are pinned on digital IDs, which when issued should be matched to the ID holder and embody their data securely. The digital ID must directly link with the real person so it can be used easily for verification and verified by the recipient party. The potential of digital IDs is to mitigate the risks of fraud for businesses, policymakers, and security professionals, but to what extent is the impact of digital IDs on identity fraud reduction across various regions – North America, Europe, and the Middle East?
A report commissioned for Regulas investigates if Digital ID is a perfect solution to resolving fraud. Regula is a global developer of forensic devices and identity verification solutions that decide if a digital ID is genuine. The evidence shows most organisations globally anticipate a significant reduction of threat to their operations and customers after opting for digital IDs, however, expectations vary across regions.
Whilst there is strong belief in the effectiveness of digital IDs, “no form of ID, physical or digital, can ensure totally that you are dealing with a genuine person or even a person at all”, the report says.
The truth is a proportion of IDs or e-IDs will be issued to “identities”, not necessarily the ID owner due to the data imputed for applications, incorporating deepfake photographs and false or stolen data. In circulation, authentic e-IDs are equally surrounded by genuinely produced but fake IDs, fully counterfeited or morphed IDs.
“Sophisticated identity fraud, including deepfakes and other AI-generated threats, is evolving rapidly”, says Ihar Kliashchou, CTO at Regula. 37% of organisations experience deepfake voice fraud and 29% fall victim to deepfake videos.
The most prevalent form of fraudulent activity experienced by organisations was the use of fake or modified physical documents.
Continuous advancements in measures and technologies for fraud detection are required to advance over the fraudsters.
The Forrester Consulting study highlights that Digital IDs are set to “transform how transactions and customer data are secured”, addressing “both current vulnerabilities and anticipating emerging threats”.
High expectations across the globe should fall back in line with a finding from 2023 that suggests every fourth bank has experienced over 100 identity fraud incidents.
The research shows that 36% of organisations across North America expect a 20% to 29% reduction in fraud, followered by Europe aligning closely with global trends. 26% of respondents expect a 20% to 29% fall in fraud rates across Europe and 18% across the Middle East.
The most prevalent form of fraudulent activity experienced by organisations was the use of fake or modified physical documents.
