Africa's digital economy has continually grown and evolved in response to the emergence of new technological advancements. While this digital transformation has brought numerous opportunities for economic growth and development, it has also given rise to new challenges, particularly in the area of identity verification and fraud prevention.

Along these lines, businesses and stakeholders across several industries continually strive to stay informed on the latest trends in the continent to remain competitive, keep their customers delighted, stay compliant with relevant regulations, and guard against the volatile landscape of cyber threats and fraudulent practices like identity theft and money laundering.

This article will explore key trends and predictions to expect in the digital identity verification and fraud prevention space in 2024. Read on to stay informed and prepared for the coming developments.

Identity Verification Predictions for 2024

More Businesses Deploy Biometric Verification

According to our internal data, biometric verifications like liveness checks and selfie verification are the top choices for identity verification in industries such as crypto, agritech, and logistics. In the fintech and lending sector, they are the second most popular option. Additionally, 10% of businesses use liveness checks as a final verification method after users sign up.

More and more businesses are adopting biometric verification, and the reasons behind it include:

• It speeds up the verification process and offers a pleasant experience during the customer onboarding process since users only need their smartphone cameras for verification
• Unlike government IDs, biometric data is difficult to duplicate or steal, making them more secure
• It helps detect AI-powered fraud tactics like bots, spoofing attacks, deep fakes, and synthetic identity fraud.

As the demand for biometric checks increases, we expect to see further advancements in biometric verification technology and greater adoption by businesses in their identity verification processes.

Digital Identity Wallets Take Center Stage

Digital identity wallets, also called self-sovereign identity wallets or decentralized identity wallets, are digital platforms that allow individuals to store and manage their personal information and credentials securely. Users have become more concerned about their data and convenience. This will lead to increased adoption of digital wallets because of the data control and privacy they provide.

Digital identity wallets encrypt people's identity data and allow them to prove their identity online conveniently and securely. With the rise of wallet technologies like blockchain technology and decentralized systems, digital identity wallets are set to become a game-changer in the identity verification space.

Real-time Safety With Transaction Monitoring Solutions

According to data from NIBSS, Nigerian banks lost ₦9.75 billion to fraud in the first half of 2023, a 276% increase compared to the same period in 2022. That data being only for the cases that were reported. On the global scene, fraud losses due to transaction fraud are projected to reach $40.62 billion in 2027, and 25.5% of fraud victims lost more than $1,000 in the most recent incident.

In an age where fraud threats and regulatory compliance requirements have become more advanced, we can expect to see more businesses implement real-time transaction monitoring solutions like EasyDetect.

The growing complexity of the financial landscape makes real-time transaction monitoring critical for companies aiming to proactively safeguard their assets, maintain customer trust, and navigate today's sophisticated fraud tactics.

Fraud Prevention Predictions for 2024

More AI-powered Fraud and Deepfakes Emerge

The continued advancement of AI technologies will enable new forms of sophisticated identity fraud and cybercrime. While AI can help detect and prevent different types of fraud, bad actors will also leverage AI to create more convincing synthetic identities and to automate fraud attacks. Some key predictions around AI-powered fraud in 2024 include:

• The use of generative AI to create convincing fake identities and documents
• Criminals launching automated and personalized phishing scams with the help of AI. The attacks will leverage data harvested from social media to make the messages more convincing
• The creation of human-sounding AI-generated voices that will enable fraudsters to impersonate people and bypass voice-based identity verification systems. This will create new threats around fraudulent phone calls and voice commands

Financial Institutions Team Up to Stop Fraud

Financial institutions have always been a prime target for fraud, and safety is one of their core priorities. That's why they performed 67% of the KYC checks in 2022.

However, fraudsters have become more sophisticated and have evolved their techniques to steal funds and identities from financial institutions and consumers. Fraud has reached the point where no institution can effectively tackle fraud alone. Along those lines, we can expect to see greater collaboration between financial institutions as they collaborate to fight fraud.

An example is Operation Radar, a collaborative framework created by some of Nigeria's largest fintech startups to tackle fraudulent transactions within their networks. This joint strategy will allow the companies to develop a fraud blacklist by sharing details, like the government and banking identity data of suspected criminals.

More Compliance Regulations Emerge

Regulatory bodies are not just watching and folding their arms while financial institutions team up and new fraud tactics emerge. If anything, regulatory bodies have consistently been developing new guidelines and frameworks to better mitigate fraud.

Recent regulatory developments across Africa include:

• Nigeria's Central Bank mandating the linkage of a Bank Verification Number (BVN) or National Identification Number (NIN) for all Tier 1 accounts. This was a pivotal amendment to Section 1.5.3 of the Regulatory Framework for Bank Verification Number (BVN) Operations and Watchlist for the Nigerian Banking Industry
• South Africa passed the National Identification and Registration Bill in 2023. The goal of the bill is to create a single national identification system for South Africa citizens
• A parliamentary panel is also urging Kenya's information technology regulators to shut down the operations of crypto projects like Worldcoin due to data privacy concerns.

How African Businesses Are Combating Fraud Through Identity Verification in 2024 and Beyond

As we prepare for 2024 and beyond, businesses need to make informed decisions around their identity verification and fraud prevention practices. 

We understand that data is the new oil and have compiled insights from over 220 businesses, 14 industries, tens of millions of verifications, and 900,000 cases of forged IDs into a single resource tagged "the 2024 Identity Verification Trends Report." 

Explore the report to learn about:

• The approach African companies are taking to combat fraud through identity verification
• How businesses are using identity verification solutions and the motivations behind their choices
• The prevalent identity verification trends across different industries
• And much more

Download the report to get all the details.