As essential services continue to digitise at an increasing rate, digital identity will remain central for businesses and governments.
In many cases, digital identity is recognised as the first line of defense in protecting funds and data.
As a result, business attitudes toward digital identity are evolving fast. Our inaugural Identity Index 2024: South Africa Edition outlines expected trends for digital identity in the coming year.
Concern about AI-based identity fraud will continue to rise
One core reason companies pursue 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.
As AI and other technologies mature, this figure will only continue to grow. With these looming threats, there is cause for concern. Only 24.5% of the 200+ companies in the study rated their identity management processes as Very Effective. Out of the larger companies, 68.8% exhibited heightened concern. Medium-sized companies showed slightly less concern (47.8%).
The study found that AI-driven fraud was identified as a key emerging threat across all company sizes and authentication levels. Smaller companies (63.2%) and businesses authenticating more than 10,000 individuals (77.4%) especially noted this risk.
Other significant threats will continue to challenge businesses. These include internal fraud, synthetic identities, and more sophisticated fraud tactics.
Limits of password-based authentication
In the fight against fraud, it is clear that passwords and one-time passwords (OTPs) alone are no longer sufficient. While passwords still have a role, security is more effective when enhanced with two-factor authentication.
Adding layers of biometrics enhances security further. For example, OTP can be replaced or enhanced with 4D Liveness and face biometric authentication.
AI-powered biometrics
While Artificial Intelligence (AI) powers certain cyber threats, it is also driving positive innovation in fraud detection.
The Identity Index found a shift toward AI solutions. Larger companies and those authenticating over 10,000 individuals prefer AI-based fraud detection (60.9% and 77.5%, respectively). They also prefer biometric methods (30.2% and 43.4%, respectively).
AI’s possibilities extend beyond security. Deep data analytics and reporting allow businesses detailed insight into their onboarding process. This highlights potential points of friction in the process.
Verifiable credentials are an imminent reality
In the future, consumers will decide what digital data is shared about them. This will be possible through ‘verifiable credentials’, an online wallet to store various personal details.
Verifiable credentials provide a secure, accessible digital equivalent to identity documents, university certificates, passports, and more. Consumers will have control over who gets access to these documents.
Digital identity solutions need to be continually evaluated
Gartner’s 2025 Trends Report highlights disinformation security as an emerging technology aimed at discerning trust. It illustrates how continuous risk scoring, contextual awareness, and adaptive trust models can protect organisations.
Our index also showed a trend toward continuous assessment. 45% of businesses authenticating more than 10,000 individuals reassess their solutions quarterly. However, only 33.3% of medium-sized companies review their solutions quarterly.
In the future, companies of all sizes should find systematic ways to keep pace with evolving fraud tactics.
Evolving policy on digital identity and need for collaboration
Digital identity will remain central in protecting data and resources for the foreseeable future. There is a growing trend toward greater collaboration and advocacy in digital identity.
Interestingly, the Identity Index showed that smaller companies (1-200 employees) demand stricter regulations (70.6%). Businesses authenticating more than 10,000 individuals also support this demand (85.0%).
Companies see value in enhanced consumer education and better industry collaboration. 
53.1% of larger companies see this as critical. Internationally, regulation and collaboration are also priorities. The National Academies Facial Recognition Report informs US policy on digital identity.
In conclusion
While trends evolve rapidly, collaboration, stronger regulation, and education will ensure digital identity continues to evolve. These measures will protect businesses and consumers.
Lance Fanaroff | Chief Strategy Officer | iiDENTIFii | mail me |
