Stronger identity proofing isn’t just cybersecurity—it’s business resilience.
Digital transformation has unlocked new opportunities – not just for innovation and growth, but also for cybercriminals seeking to exploit personal and sensitive information. According to the Future of Global Identity Verification report (PDF), more than two-thirds (69%) of organizations have experienced an increase in fraud attempts. Among companies with over 5,000 employees, the average annual direct cost of identity fraud is $13 million. That figure rises sharply with organizational size; for enterprises with more than 10,000 employees, 20% report annual direct and indirect identity fraud costs exceeding $50 million.
The surge in AI-assisted fraud, the widespread availability of billions of compromised credentials on the Dark Web, and the proliferation of Deepfakes have contributed to a significant increase in both the frequency and sophistication of attacks. The report also reveals that 51% of organizations experience more fraud when relying solely on usernames and passwords, highlighting the vulnerabilities of single-factor authentication. In contrast, only 21% report fraud attempts against systems using facial biometric liveness detection, underscoring the effectiveness of more advanced authentication methods.
This data points to a clear path forward: implement robust identity proofing and verification technologies capable of assessing, in real time, whether a transaction – such as account registration, profile update, or payment – is being initiated by a legitimate user or a threat actor.
Moving Beyond Authentication Alone
Historically, identity and access management (IAM) has focused on authentication, verifying that a user (e.g., an employee, contractor, or customer) is authorized to access specific systems or data. But as credential-based attacks increase, organizations must go beyond traditional authentication and incorporate identity proofing and verification into their security frameworks.
Although often used interchangeably, the two serve distinct purposes:
- Identity proofing is typically a one-time process conducted during onboarding or account creation. It establishes a link between a user’s claimed identity and the evidence provided (e.g., a government-issued ID).
- Identity verification is an ongoing process to confirm the identity of a known user. It may involve layered verification techniques and behavioral analysis to ensure the user remains who they claim to be.
Common Use Cases
Identity proofing and verification are essential across a wide range of digital interactions – from internal workforce and helpdesk operations to customer-facing services. Key use cases include:
- Preventing Candidate Fraud
- Secure Employee Onboarding
- Credential Resets and Account Recovery
- Verification of High-Risk Transactions
Identity Signals: Methods of Verification
To ensure accuracy and trust, organizations typically use a combination of identity verification signals, each offering varying levels of assurance:
- Document Verification: Technologies verify the authenticity of government-issued IDs (e.g., passports, driver’s licenses) to detect signs of forgery, tampering, or theft.
- Biometric Verification: Uses physical or behavioral traits such as fingerprints, facial features, iris scans, voice patterns, keystroke dynamics, or mouse movements. Biometrics are harder to fake and are often layered with other verification methods.
- Video Verification: Conducted via live video, this method prompts users to perform specific actions to confirm liveness and detect coercion or spoofing. Often paired with document verification.
- Knowledge-Based Verification (KBV): Involves questions based on personal history (e.g., past addresses, pet names). While increasingly vulnerable to data breaches, KBV still has value in low-risk contexts.
- Out-of-Band Verification: Common in two-factor and multi-factor authentication (2FA/MFA), this method verifies identity via a separate communication channel – such as sending a code by SMS or email.
Why Identity Proofing and Verification Matter More Than Ever
Digital innovation, growing cyber threats, regulatory pressure, and rising consumer expectations all drive the need for strong identity proofing and verification. Here is why it is more important than ever:
- Combatting Fraud and Identity Theft: Criminals use stolen identities to open accounts, secure loans, or gain unauthorized access. Identity proofing is the first defense against impersonation and financial loss.
- Enabling Secure Digital Access: As more services – from banking to healthcare – go digital, strong remote verification ensures secure access and builds trust in online transactions.
- Regulatory Compliance: Laws such as KYC, AML, GDPR, HIPAA, and CIPA require identity verification to protect consumers and prevent misuse. Compliance is especially critical in finance, healthcare, and government sectors.
- Preventing Account Takeover (ATO): Even legitimate accounts are at risk. Continuous verification at key moments (e.g., password resets, high-risk actions) helps prevent unauthorized access via stolen credentials or SIM swapping.
- Enabling Zero Trust Security: Zero Trust assumes no inherent trust in users or devices. Continuous identity verification is central to enforcing this model, especially in remote or hybrid work environments.
- Improving Customer Experience: Fast, reliable identity proofing supports seamless onboarding and reduces friction. Balancing security with user experience enhances customer satisfaction and conversion.
- Protecting Brand and Revenue: Fraud incidents and breaches cause not just financial losses but also lasting reputational damage. Identity verification helps safeguard business continuity and customer trust.
- Building Long-Term Trust: Transparent, secure handling of user identities fosters greater confidence in digital engagement, helping businesses establish lasting relationships with their users.
As the digital landscape continues to evolve, so do the tactics of cybercriminals. Traditional methods of authentication are no longer sufficient to keep organizations, employees, and customers safe. Identity proofing and verification have become foundational pillars in modern cybersecurity strategies, protecting against fraud, supporting compliance, enabling seamless user experiences, and reinforcing trust.
In a world where trust is the new currency, strong identity proofing and verification isn’t just a security requirement – it is a business imperative.
