Concerns about the rise of AI-based fraud and AI-powered biometrics are two of several trends that will dominate South Africa’s digital identity market in 2025.
This is according to an inaugural research – the Identity Index 2024: South Africa Edition - released by face authentication and identity verification firm iiDENTIFii.
iiDENTIFii commissioned World Wide Worx to conduct research and produce the Index. It is based on responses from 200 large and medium enterprises across industry and provides an in-depth analysis of the current identity fraud concerns, practices, and preparedness among businesses in South Africa.
Lance Fanaroff, chief strategy officer, iiDENTIFii, has drafted a list of top trends that the company
First on the list is the expected rise of AI-based fraud.
“One of the core reasons companies are pursuing digital identity solutions is to counter rising cyber threats and identity fraud. The Southern African Fraud Prevention Service found that impersonation fraud increased by 356% between April 2022 and April 2023. With AI and other technologies maturing all the time, this figure will only continue to grow,” says Lance Fanaroff, chief strategy office at iiDENTIFii.
While AI may be powering certain cyber threats, it is also an engine of positive innovation in fraud detection, Fanaroff notes.
The Identity Index points to a shift towards AI solutions, with larger companies and those authenticating over 10 000 individuals showing an inclination towards AI-based fraud detection (60.9% and 77.5%, respectively) as well as biometric methods (30.2% and 43.4%, respectively).
The research also shows that there is a growing understanding in the market that passwords and OTP (one-time pins) alone cannot offer sufficient protection against evolving cyber threats.
“While passwords still have a role to play, security is more effective when it is enhanced with two-factor authentication, and especially with additional layers of biometrics - for example, enhancing OTP, or even replacing OTP, with 4D Liveness and face biometric authentication,” Fanaroff continued.
Continuous assessment
iiDENTIFii’s index also reveals a trend towards continuous assessment, with 45% of businesses authenticating more than 10 000 individuals reassessing their solutions on a quarterly basis.
There remains room for improvement, with only 33.3% of medium-sized companies reviewing their solutions quarterly.
According to Fanaroff, digital identity will remain central in protecting data and resources for the foreseeable future.
“Interestingly, the Identity Index showed that smaller companies (1-200 employees) are expressing a high demand for stricter regulations (70.6%), while businesses authenticating more than 10 000 individuals also show significant support (85.0%).”
There is also a growing trend towards greater collaboration and advocacy within digital identity.
“Businesses are seeing the value of enhanced consumer education and better industry collaboration, with 53.1% of larger companies seeing it as critical. Internationally, regulation and collaboration are also being viewed as a priority, with the National Academies Facial Recognition Report being used to inform US policy on digital identity,” says Fanaroff.
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