Securing Trust: The Future of Identity Verification

Hello. Welcome to the webinar, Securing Trust, The Future of Identity Verification. My name is Alejandro Leal. I'm a Senior Analyst at KuppingerCole, and today we'll be exploring the topic of identity verification. This webinar is mostly based on the Leadership Compass that we published early in the summer, and it's important to just let know the audience that I was not the author of this Leadership Compass. She's currently on maternity leave, so I'm taking over the topic in the meantime, and I also helped to finalize the report.

So I'm excited to share the insights of this LC as well as the market trends that we see today. But before we start talking about the topic of today's webinar, just a quick reminder to the audience about the audio control, so all of you are muted. There's no need to mute or unmute yourself. We'll also be conducting a few poll questions throughout the webinar, and we'll also have time for Q&A in the last minutes of the webinar.

So just feel free to enter questions at any time using the control panel, and in the As I said, we'll be introducing the topic of identity verification today, then we'll jump into the market trends, and then we'll discuss briefly the results of the Leadership Compass. But before, here's our first poll question. So just to understand the audience, what is your biggest challenge with identity verification today, if you have any challenges? Would that be fraud prevention, user experience, compliance, or is it more about integration?

Okay, so moving on, here we have our quote of the day. Every digital journey starts with identity, and if we look at the transformation over the years when it comes to identity verification, we have seen that it has moved from old school manual checks to more remote and automated processes, and this shift can be explained by observing how companies face more, let's say, global user bases. We see more fraud cases, tighter compliance rules, and the pressure for many organizations to deliver secure but seamless user experiences. And here at Coupling.org, we've been following these trends lately.

Our latest research, as previously mentioned, was published early in the summer. We had, in total, 15 vendors participating, so that gave us a clear picture of where the market is heading and how identity verification is evolving and moving towards user-held identities, digital identities. So if we go to the next slide, when we think about digital interactions, I think there's an important question, which is how do we move from an unknown user to a known user?

And the answer lies in digital identity, so the ability to collect, consume, store, share, and trust digital identity information is what makes this transformation possible, and because users today can mean so many different things, from customers to employees, suppliers, partners, you name it, it's a reminder that we have a flow that's modular, that's flexible and adaptable, and it adapts to any use case or any scenario, and we know that things are moving fast.

So this is a sort of an approach that creates a unified user journey, so every organization will tackle these different use cases that you see at different speeds, but the strategy is the same. Organizations can go for quick wins, like customer onboarding or employee authentication, which could serve as a foundational layer for future use cases, and over time, this journey could span other areas, like verification, KYC, and even passwordless authentication across different users. So the result is to have a single seamless framework that adapts as your organization scales and grows.

But the real opportunity is to create a reusable trusted identity that includes a robust verification process where identities can be securely stored, reused, and managed by the user. This often happens through a wallet-based model, and this allows identity to travel across different ecosystems and use cases, so from onboarding to payments to workforce access and other digital services.

So we're moving toward a world where interoperability and common standards matter, so this shift is transforming identity from a transaction into an asset that organizations and individuals can rely on for the long term. So as I've been alluding to this in the previous slides, I think this slide makes the point more clear. So once you implement reusable identity verification for a single use case, in a way, you already solved one of the hardest parts of this journey.

And now that the critical piece of the flow is in place, it means that the threshold for adding more use cases gets less complicated. So again, whether it's onboarding, KYC, or passwordless, each new case can be built faster with less friction and based on the same trusted foundation. And I think that this is how organizations scale from a quick win to a more unified future ready identity ecosystem. So if we look at the next slide, we have more recommendations. So it's important for organizations looking for identity verification solutions to explore the solutions that are in the market.

Each of them has its strengths and challenges, and among other things, it's also recommended to look at evolving regulations, like here in Europe, the EUD wallet, or how KYC, AML, data privacy, all of these things are moving fast and changing. So it's important to keep an eye on that. And if you're a vendor, it's important to evaluate whether to go with a single platform or a best of breed approach for different functions, and that ultimately depends on the vendor. In the next slides, in the next section, I will show more information on the market trends that we see.

So moving on to the next section, identity verification is at a turning point. And why? Because things are moving very fast. We see more threats, adversaries are adapting and using the latest tools to launch sophisticated attacks. We see the use of deep fakes, and compliance use cases. We see initiatives from governments like the wallet here in Europe and other cases, and the industry is transforming. Technology is moving fast. Essentially, it is clear that there are many reasons for why organizations and users will adopt identity verification solutions. Here we have our market size.

So the identity verification market is anticipated to grow. The compound annual growth rate is around 20.7 percent, and the market is expected to attain a market size of around 50 billion by the year 2030. We predict a significant rise in adoption of remote identity verification solutions, and that is due to the escalating threats that we see in the market of the stricter compliance requirements.

There are a lot of developments around age verification in many countries, and we also see the emerging business opportunity that is associated with transitioning toward, let's say, user-controlled digital identities. So we see that there's potential for growth in the market, but we have different scenarios, let's say. In the best case, you could say that things really take off. Adoption moves quickly, compliance is strong, and fraud cases go down. Deep fake detection tools mature, which means that portable digital identities become the norm across different industries.

That's the best case scenario, but if we look at the more moderate, let's say, expected case, it's a little bit more mixed. We see still some growth when it comes to adoption, but it's unevenly, with some regions and some sectors moving faster than others. Fraud protection could improve, but deep fake detection could still be improved, and of course, there are many new use cases emerging, so it could be a little bit tricky to stay up to date and to scale as needed.

The worst case, it's more about, on one hand, adoption, and on the other, regulations and privacy concerns dominate the conversations and could hold things back. So we might end up with some siloed, single-use case solutions rather than a more widespread adoption, but that really depends on wide different things, from regulations to how vendors provide these solutions, and most importantly, to user adoption. So things remain to be seen.

Here, we have a collection of the vendors evaluated in the leadership compass and the industries where they focus the most. It's not surprising to see that finance is the key industry because it's heavily regulated with KYC and AML requirements, and also, we see that most fraud cases tend to happen in this industry. We also see some growth in gaming and gambling, and these rely on identity verification to enforce age verification restrictions and to prevent abuse and fraud.

We see also some use cases in the crypto industry, government as well, and government use cases are central because they issue official identity documents, they provide public services, and they're increasingly creating, let's say, initiatives and digital identity frameworks so countries can adapt and adopt standards and leverage these technologies. Healthcare is another strong area due to the sensitive information of patient data and because of compliance requirements. So together, these industries represent high risk, high regulation, and high demand for secure, trusted digital identity.

Here on this slide, we're looking at the, let's say, the estimated maximum potential participation in a user-held digital identity ecosystem where individuals, businesses, and governments are all actively engaging with each other, and this would mean that widespread adoption across industries could be more plausible, right? So there's a lot of potential here, but we see the challenge of perhaps even fragmentation of standards and use cases.

So again, it really depends how things are implemented and how things evolve over time. Here we have a graph where we try to describe the different types of vendors that we encounter during our research. Some vendors focus more on specific regions or countries, others try to cover the globe either by building their own tech or by establishing partnerships, and because the market is so diverse, our report looks at vendors that can verify users globally and that they rely on their own technology for either document or biometric checks.

That was our sort of basis when evaluating vendors in this report, and what we also see is that organizations don't pick just one provider. They usually work with two to even seven vendors to get global coverage and to address all the use cases that they may have, and there's also some willingness to switch vendors, which makes sense given how dynamic this market is.

According to one of Annie Bailey's previous reports, since 2017, about 40 new vendors have entered, and we've seen a lot of mergers and acquisitions, and this shows that identity verification is absolutely essential, but no single solution is complete enough on its own yet. There's a lot of innovative companies that address specific niche areas, so it's an exciting market and I'm looking forward to the next report that we will be doing in the future. So now it's time to talk about the Leadership Compass, but before that, let's go for the second poll question.

So how does your organization currently verify customer identities? Okay, so moving on, I'll just briefly explain how the was completed. Many of you have engaged with us, many of you have talked to us in the past, so you're probably familiar with the way we do research, but in a nutshell, we find the topic, then we try to find vendors that cover this topic.

We reach out to them, we provide a questionnaire with hundreds of questions, so based on the questionnaire and based on a briefing and demo that we have with each vendor, that's how we evaluate the vendors in the market, and then we write the report, we send it back for fact check, and then we get some feedback or some fact check clearance if there's anything wrong or whatever. We can always address that and try to make sure that this report is accurately depicting each product, and then we publish the report.

So it really takes, depends on the topic, two to four months, and also it depends how many vendors we have. But for this particular report, we had 15 vendors, as I said, and here we have the results of the overall leadership. So we see that the overall leadership chart is a linear view. We have followers on the left, we have challengers in the center, and the leaders on the right. In this market segment, leaders are vendors with strong all-around capabilities, functionality, market presence, financial stability, innovation. These often offer mature products with more broad applicability.

Challengers are solid players with strong offerings, but maybe more specialized or focused on certain regions or industries. They may lack broader application, and followers are typically earlier in their journey. They have a much narrower scope or emerging capabilities, but they do still play an important role in this dynamic market. And it's worth noting that even among the leaders, there's significant differentiation.

No two solutions look the same, so this reflects how quickly the market is evolving and why it's important to look not just at the overall position, but also at the vendors covered to see which vendor is more adequate for your own use case and for your organization. So the leadership compass shouldn't be the end of the conversation, but it should be the beginning of engaging and learning more about the market. So in the next slide, we just have quickly some of the required capabilities that we use to assess the vendors in the report.

So we looked at document verification, biometric verification, additional verification methods, how they use AI and machine learning, their approach to privacy, how they perform orchestration, and also the maybe covering lots of different languages and dialects in very unique geographical places that a more broad vendor may not particularly, let's say, target. So that's an interesting area that we've seen many vendors trying to differentiate themselves by focusing on very, very specific regions. And the last poll question is, how confident are you in your current identity verification process?

I see that we have already some questions, so given that that was the last poll question, I would just like to just remind you to check out our website. We will be publishing more reports on this topic. We have some really good webinars and white papers. And I'd like to invite you to our identity-centric cybersecurity event taking place in Frankfurt next month already, yes.

And yes, you can always reach out to us if you have any questions, any concerns, or if you would like to have a conversation. So I see we have some questions already. So one question is, how can organizations balance strong identity verification with user experience, especially across global and mobile-first user bases? I think that the key here is to make the process of identity verification as invisible as possible to legitimize users, while at the same time being tough on fraudsters.

So again, it's the same old saying, we shouldn't sacrifice convenience for security or the other way around. Both of them need to go up, right? And localization matters too. So as I mentioned in the last slide, supporting different documents, alphabets, and regulations worldwide so the experience feels natural for the users. And as I alluded during the webinar, user adoption is going to be crucial for the future of this market segment. We have another question. What are the most common threats targeting digital onboarding today, and how is identity verification evolving to address them?

Well, that's the tricky part because today's onboarding threats go way beyond deepfakes or fake IDs. We see that identity verification has evolved quickly to counter this, particularly deepfake detection. So we see many vendors that on the roadmap, when we talk to them, they told us that their next focus is to either create their own house technology on deepfake detection or acquiring smaller vendors that specialize in this area. So also by improving liveness checks, document forensics, NFSC chip reading as well.

So there are different areas where many of these vendors can work to address the challenges that we see. Another question is asking about AI and what role AI plays in identity verification today, and if there are any, let's say, limits. So AI has become a crucial part of identity verification. It's helping with document analysis, phase matching, liveness detection, and spotting anomalies. But it's not a silver bullet, right?

I think that many vendors have the idea that maybe just by having AI features and by talking about AI in conferences or in their marketing, that's going to be enough to gain attraction. But there's a lot of skepticism around many organizations. The only thing they want is for you to solve their problems. So if AI can help, then great, but they're not only looking at solutions that have AI-based features.

So I think that the strongest solutions combine both AI-based capabilities with other sort of defenses, and vendors need to do a good job at explaining how AI features, if they have, will really have practical benefits and will really solve the problems that organizations face. We have one more question. So the question is, what are the key factors organizations should consider when evaluating identity verification vendors?

So yes, I said the leadership compass is an important tool to assess the different vendors in the market. So when choosing a vendor, it's not about whether they operate in one market or in one industry, but whether they can scale your business tomorrow. So you have to look at different things like global document coverage, fraud defenses, the roadmap, flexibility. You don't want a vendor lock-in. You want a solution that will really solve your problems and will be telling you and explaining you how they see the market moving forward and how they address the threats that we see today.

I believe that's the last question. Unless there's another one.

Yes, looks like that was the last question. I really hope that you found this webinar useful. And as always, you can always reach out to me on my email here on the slide, or you can find me on LinkedIn and we can continue the conversation. We will be publishing more reports on this topic. We're preparing an advisory note on identity verification and things to look for next year, 2026. So thank you everyone and talk to you next time.