AI in Growth of Global Identity Verification Market

Market Outlook: AI-Powered Growth in the Identity Verification Sector

According to IMARC Group, the global identity verification market was valued at USD 13.8 Billion in 2024 and is projected to reach USD 46.4 Billion by 2033, expanding at a CAGR of 14.4% during 2025-2033. This strong growth is being fueled by the increasing adoption of artificial intelligence (AI) and machine learning (ML), which are enabling higher levels of automation, fraud detection, and real-time authentication. At the same time, the identity risk landscape continues to intensify.

The U.S. Federal Trade Commission (FTC) recorded 6.5 Million consumer reports in 2024, with identity theft accounting for 17.54% of cases. Reported fraud losses reached USD 12.5 Billion, underlining the urgent need for stronger KYC/AML measures and advanced identity verification solutions. As industries accelerate digital transformation, the demand for AI-powered verification systems is becoming more pronounced. These technologies are increasingly viewed as essential for delivering secure and seamless interactions across banking and financial services, healthcare, telecom, and e-commerce, where both regulatory compliance and user trust are crucial.

Some of the Key Growth Factors Include:

• Rising Digital Transformation: The rapid shift toward digital banking, telemedicine, e-commerce, and mobile-first services is driving strong demand for secure and frictionless onboarding. Industry reports indicate that as of 2024, more than 75% of U.S. adults were using digital banking services on a regular basis, underscoring the scale of this transformation. In response, AI-driven verification is being widely adopted to deliver speed, scalability, and compliance across industries adapting to digital ecosystems.
• Escalating Fraud Incidents: The rising fraud incidents and data breaches are intensifying the need for advanced identity verification. As of 2025, several large-scale breaches were reported, including one in June that exposed 16 Billion login credentials, spanning usernames, passwords, tokens, and cookies, from services such as Google, Apple, and Facebook. To address this growing threat, enterprises are increasingly investing in AI-enabled solutions capable of detecting anomalies and preventing fraudulent activities in real time.
• Regulatory Compliance Requirements: Stringent frameworks such as KYC (Know Your Customer), AML (Anti-Money Laundering), and GDPR are compelling organizations to adopt AI-powered verification to meet evolving compliance standards efficiently.
• Seamless Onboarding Demand: Financial services and fintech platforms are prioritizing AI identity verification tools that enable instant customer authentication, reducing manual checks and improving user experience while maintaining security.

From Manual to Machine: AI Technology Trends Driving Identity Verification

AI and Biometrics: Redefining Real-Time Authentication

AI-driven biometrics are transforming identity validation through advanced facial recognition, fingerprint scanning, and voice authentication. Unlike traditional methods, these systems continuously learn and adapt, reducing false positives and improving accuracy. Facial recognition powered by neural networks can now account for variations in aging, lighting, and angles. The National Institute of Standards and Technology (NIST), through its Face Recognition Technology Evaluations (FRTE), reports that top-performing algorithms achieve accuracy rates above 99.5%, with some reaching 99.97%.

Moreover, fingerprint and iris recognition systems leverage AI to analyze unique identifiers within milliseconds, while voice authentication distinguishes subtle vocal patterns, enhancing resilience against spoofing. This integration delivers secure and seamless onboarding across financial services, border control, and mobile banking. With scalability to support mass adoption, AI biometrics are also being deployed across e-commerce and healthcare. By combining behavioral and physiological traits, AI is establishing biometrics as one of the most trusted identity verification solutions worldwide.

Deep Learning: Detecting Forgery with Precision

Deep learning algorithms are emerging as powerful tools in combating identity fraud, particularly in detecting forged documents and fraudulent behavior. Convolutional neural networks (CNNs) now examine high-resolution document scans with precision, detecting subtle anomalies in fonts, watermarks, and holograms that often escape human scrutiny. At the same time, behavioral biometrics powered by deep learning monitors keystroke dynamics, mouse activity, and navigation patterns to establish distinct digital signatures. These models continuously adapt by learning from emerging fraud patterns, enabling real-time detection in complex environments. AI systems can flag discrepancies between declared information and behavioral trends within milliseconds, significantly strengthening fraud prevention frameworks.

Industry assessments underscore these advantages. A research study published in April 2025 highlighted that, in longitudinal trials conducted across 27 financial institutions, AI-driven fraud detection systems achieved an accuracy rate of 96.8%, significantly higher than the 72.3% recorded by traditional rule-based methods. By combining document authentication with behavioral monitoring, deep learning delivers a scalable and adaptive framework, establishing itself as one of the most effective defenses against identity fraud in modern verification environments.

Liveness Detection: Stopping Spoofing in Its Tracks

Liveness detection has emerged as a critical AI-driven safeguard against spoofing attempts using fake images, videos, or masks. By employing advanced 3D sensing, micro-expression tracking, and motion detection, these systems ensure that biometric inputs originate from a live individual rather than a fabricated source. Techniques such as texture analysis and light reflection mapping further enhance accuracy, enabling the detection of subtle cues like blinking, lip movement, or slight head tilts. This capability is becoming indispensable across sectors, including mobile banking, border security, and online voting.

A study published in March 2025 evaluated MobileNetV2, ResNet50, and Vision Transformer (ViT) models for digital image spoof detection on a dataset of 150,986 facial images. MobileNetV2 demonstrated superior performance, achieving 91.59% accuracy on test data and 97.17% on validation, while offering faster convergence and stronger generalization. With proven effectiveness, AI-powered liveness detection strengthens remote onboarding, ensures regulatory compliance, and fortifies digital ecosystems against spoofing threats.

Automated ID Proofing: Smarter Document Validation

AI-powered natural language processing (NLP) and optical character recognition (OCR) are redefining identity verification by automating the extraction and validation of data from passports, driver’s licenses, and national IDs. This minimizes manual intervention, reduces errors, and enables real-time checks. Through integration with global databases, AI can instantly detect inconsistencies such as expired credentials, tampered text, or forged entries.

Beyond static document proofing, advanced systems incorporate contextual data, including geolocation and IP tracking, to further validate user authenticity. These capabilities significantly accelerate onboarding in financial services, telecom, and e-commerce, often completing verifications within seconds. A key development occurred in June 2025, when Veriff introduced its AI-powered Proof of Address (PoA) solution to strengthen KYC and due diligence processes. The tool verifies documents in under 30 seconds, supports over 40 languages, and applies multi-layered fraud detection with optional database checks. By combining automation with intelligence, AI elevates ID proofing into a fast, reliable, and globally compliant process.

Blockchain Integration: Securing Decentralized Identities

Blockchain integration is emerging as a key driver of decentralized identity management, with AI playing a central role in ensuring trust, transparency, and efficiency. By leveraging distributed ledger technology (DLT), identity records are rendered tamper-proof, immutable, and accessible only to authorized parties. AI enhances this framework by managing smart contracts, detecting anomalies in blockchain transactions, and delivering predictive risk assessments. Decentralized identifiers (DIDs) allow individuals to retain control over their digital identities, reducing dependence on vulnerable centralized databases.

Practical applications are already visible as healthcare providers can securely exchange patient identities without compromising privacy, while financial institutions can simplify cross-border KYC. Notably, in July 2025, Vietnam launched NDAChain, a national blockchain platform supporting secure identity verification, compliance, and data governance across multiple sectors. Built as a permissioned Layer 1 blockchain with Proof-of-Authority and Zero-Knowledge Proofs, it integrates with the national ID system, exemplifying the potential of blockchain-AI collaboration in creating self-sovereign, privacy-centric digital identities.

Breaking Down Borders: Regional Outlook for Identity Verification Market

North America: Pioneering AI-Enabled Verification

North America continues to dominate the global identity verification market, driven by its advanced digital infrastructure, rigorous regulatory frameworks, and strong adoption of AI technologies. The United States leads the region, with strict enforcement of KYC, AML, and CCPA regulations compelling enterprises to deploy AI-powered verification systems for compliance. The rise of digital banking and fintech innovation has further accelerated demand for seamless onboarding solutions.

In October 2024, the U.S. Department of the Treasury announced that its advanced, data-driven fraud prevention measures, incorporating machine learning, prevented and recovered more than USD 4 Billion in fraud and improper payments during Fiscal Year 2024. Beyond finance, AI is increasingly applied in healthcare to verify patient identities and in government to streamline e-governance services. Investment in explainable AI (XAI) is also gaining momentum, ensuring transparency and ethical standards in verification processes. These factors solidify North America’s leadership in setting global benchmarks for security, compliance, and trust.

Europe: Strengthening Trust through Regulation

Europe’s identity verification market is shaped by a strong emphasis on data privacy and trust, guided by frameworks such as GDPR and eIDAS. The region has embraced AI-powered verification solutions across banking, cross-border trade, and public services, aligning innovation with strict compliance requirements.

A significant milestone occurred in May 2024, when the EU Digital Identity Framework Regulation came into force, mandating Member States to provide at least one interoperable European Digital Identity Wallet. This free-to-use mobile app allows users to authenticate themselves, share documents like diplomas or travel tickets, and securely sign digital records while maintaining control of personal data. Backed by EUR 46 Million in funding for Large-Scale Pilots, the initiative underscores Europe’s strategy of strengthening trust through regulation while advancing digital identity adoption across sectors.

Asia-Pacific: Driving Fintech Expansion

The Asia-Pacific region is witnessing rapid expansion in identity verification, propelled by the rise of fintech, mobile banking, and digital payments across India, China, and Southeast Asia. Moreover, supportive government policies, coupled with rising smartphone penetration, are accelerating the adoption of cost-effective and scalable AI-based solutions.

A notable example is India’s Digi Yatra platform, which surpassed 15 Million downloads by July 2025 and has enabled over 60 million seamless, paperless air travel journeys across 24 airports since its launch in December 2022. The platform is now extending services to additional airports and preparing pilot programs for inbound travelers using e-passports in collaboration with IATA. With plans to cover 80% of domestic air passengers by 2028, Digi Yatra exemplifies the region’s commitment to secure, efficient, and privacy-focused identity verification in aviation and beyond.

Identity Verification Decoded: Market Segmentation

Type: Biometric Verification Leads the Trust Race

• Biometric verification remains the dominant identity authentication method, driven by its unmatched accuracy, security, and user convenience.
• From facial recognition to fingerprint and iris scans, these technologies are being rapidly adopted across mobile and digital platforms.

Component: Solutions Take Center Stage

• Solutions account for the largest share of the identity verification market, as enterprises increasingly opt for integrated AI-driven platforms rather than standalone services.
• These end-to-end solutions streamline compliance, onboarding, and fraud detection, providing a unified layer of security.

Deployment Mode: On-Premises Systems Dominate Enterprise Choices

• Despite the rise of cloud adoption, on-premises deployment continues to dominate, particularly among large enterprises.
• The preference stems from the need for greater control, robust customization, and enhanced data security in regulated industries.

Organization Size: Large Enterprises Set the Pace

• Large enterprises command the largest share of the identity verification market, leveraging advanced AI tools to manage compliance at scale.
• These organizations handle massive transaction volumes and complex regulatory demands, making automated verification indispensable.

Vertical: BFSI Sector Remains the Growth Epicenter

• The banking, financial services, and insurance (BFSI) sector leads identity verification adoption, driven by stringent KYC and AML regulations.
• Digital onboarding, mobile banking, and cross-border transactions all demand robust verification systems.

Innovation Pulse: Recent Developments in Identity Verification

In June 2025, the industry witnessed a breakthrough when UK-based digital compliance firm SmartSearch announced a strategic partnership with identity technology company Daon to integrate AI-powered biometric verification into its SmartDoc platform. This collaboration brings Daon’s advanced facial recognition and liveness detection, engineered to identify deepfakes and synthetic identities, directly into SmartDoc, significantly reducing manual document checks and improving first-time pass rates. Beyond regulatory alignment, the partnership sets a new benchmark for speed and reliability in identity verification.

Mobile-first identity solutions are also expanding rapidly, addressing the growing demand for remote onboarding and cross-border digital interactions. Enterprises are deploying mobile verification tools that enable secure, borderless authentication—empowering users to access services from anywhere without compromising compliance or security. This shift is particularly vital for industries like fintech and telecom, where customer acquisition increasingly relies on frictionless digital access.

Another key development is the rising investment in explainable AI (XAI) within identity verification systems. As organizations balance security with ethical AI adoption, explainable AI is being integrated to ensure decision-making transparency and fairness. These advancements are designed to help companies comply with regulatory requirements, build customer trust, and mitigate biases in automated verification processes—solidifying XAI as a cornerstone of next-generation identity solutions.

Key Players: Leading the Identity Verification Revolution

The global identity verification market is highly competitive, driven by rapid technological advancements and increasing regulatory requirements. Companies are investing heavily in AI and machine learning to enhance biometric recognition, liveness detection, and automated ID proofing. The market is characterized by continuous innovation, with vendors offering integrated platforms that combine AI, blockchain, and cloud-based solutions.

Strategic partnerships, mergers, and acquisitions are common, enabling providers to expand global reach and strengthen product portfolios. A strong emphasis is being placed on explainable AI, ensuring transparency in automated decision-making processes. The competitive environment also reflects growing demand for mobile-first and cloud-native verification systems, catering to fintechs, healthcare providers, and government services.

Some of the key companies in the market include Acuant Inc., AuthenticID Inc., Equifax Inc., Experian PLC, Intellicheck Inc., Jumio Corporation, Mastercard Inc., Mitek Systems Inc., Onfido, Thales Group, TransUnion and Trulioo.

• AuthBridge launched India’s largest AI-driven identity verification platform in April 2025, during the GCC Summit & Awards. Built on two decades of expertise and trained on 1.5 billion proprietary records, the platform delivers up to 95% accuracy and cuts turnaround time by 82%. It supports 24×7 availability for more than 3,000 clients across 140+ countries, including Fortune 500 firms. Powered by a suite of “Agentic AIs,” it automates the entire verification lifecycle, reducing manual effort by up to 90% while strengthening compliance and efficiency.
   
• AuthenticID introduced its new platform, AuthenticID360, in October 2024. This identity verification solution offers a two-second response time and integrates ID and biometric checks, KYC/KYB processes, sanctions screening, and fraud watchlists into a single platform. Designed for mid-market clients and reseller partners, it features a fully automated decision engine driven by AI and machine learning.
   
• Dealertrack Canada announced a strategic partnership with Equifax Canada and Interac in February 2025. The collaboration integrates advanced AI-powered identity verification into the Dealertrack platform, enabling real-time checks with results often delivered within 15 seconds. By combining Equifax’s orchestration services and Interac’s biometric document verification, the solution enhances fraud prevention in the auto-lending sector.
   
• Experian and GBG expanded their strategic partnership in June 2025 to strengthen fraud prevention and identity verification in Australia and New Zealand. The initiative combines Experian’s extensive data with GBG’s greenID platform to provide rapid, secure verification and real-time fraud alerts. The solution eliminates paperwork and manual checks while serving sectors ranging from banking and fintech to telecommunications.
   
• Intellicheck announced in May 2025 that PowerHouse Southern Regional Bank has expanded its agreement with the company. The three-year contract, valued in the high seven figures, extends Intellicheck’s identity validation technology from digital applications to teller-workstation transactions across more than 1,900 branches. The initial annual contract value is in the low seven figures, with payments made monthly during rollout.
   
• Jumio launched Jumio Liveness Premium in June 2025, its most advanced biometric liveness detection solution. The system employs patented technology with randomized color sequence overlays analyzed by AI to verify human presence. It effectively counters deepfakes, spoofing, and injection attacks, ensuring higher protection against fraud.
   
• Mastercard and Experian announced a collaboration in June 2025, through integration of Mastercard’s Identity Insights into the Experian Ascend Platform™. The combined solution validates key identity elements such as name, email, and phone number to detect synthetic identities and application fraud more accurately. It reduces friction for genuine customers while enhancing fraud detection across industries, including finance, healthcare, automotive, and digital marketing.

Empowering Digital Trust: IMARC’s Strategic Insights into the AI-Driven Identity Verification Market

As AI transforms global identity verification, IMARC Group equips stakeholders with research-driven intelligence to navigate this rapidly evolving market.

How IMARC Supports Identity Verification Players:

• AI Adoption Monitoring: Tracks deployment of biometrics, liveness detection, and explainable AI across industries.
• Vendor and Startup Intelligence: Maps emerging identity verification providers and disruptive innovators.
• Policy Landscape Mapping: Evaluates global KYC, AML, and GDPR compliance requirements.
• Investment Insights: Identifies high-growth applications in BFSI, telecom, and e-commerce.
• Forecast and Strategy: Offers detailed forecasts by type, component, deployment mode, and region to guide long-term growth planning.