AI to Save Banks $900 Million in Identity Operational Cost
by Fintechnews Switzerland November 15, 2023A new study from Juniper Research has found that the implementation of AI (Artificial Intelligence) in identity verification will reduce the average time spent per digital onboarding check from over 11 minutes in 2023, to under 8 minutes in 2028; dropping by 30%.
As AI becomes increasingly accurate, it reduces the number of identity checks referred to a human agent for review, and the need for ID photos to be retaken. This decreases the time taken for each verification, as well as the associated costs. The use of AI will also play a key role in protecting against emerging threats, such as synthetic identity fraud.
Total Volume of Digital Identity Verification Checks per annum (m) 2024, Split by Segment
Onboarding Spend to Grow Despite Decreasing Costs
The research anticipates that widespread adoption of digital verification within banking, particularly mobile banking, will continue to drive digital onboarding revenue growth.
Despite the aforementioned increase in efficiency reducing the cost of each individual digital identity verification check, the growing volume of checks, particularly in developing regions, will offset this. As such, Juniper Research forecasts that total spend for banks will increase from $7.4 billion in 2023, to $9.9 billion in 2028; representing a 34% increase.
Report author Michael Greenwood explained:
“Growth will be particularly strong in developing markets, where rising smartphone penetration is making mobile banking more readily available; driving growth in digital onboarding. To capitalise on this, verification vendors must develop onboarding processes that emphasise checks other than credit scores, such as mobile operator history, in order to maximise viability in emerging regions.”
About the Research Suite
The new market research suite offers the most comprehensive assessment of the digital identity verification market to date; providing analysis and forecasts of over 82,000 datapoints across 60 markets over five years. It includes a ‘Competitor Leaderboard’ and examination of current and future market opportunities.
Featured image credit: edited from freepik
