The Role of Biometrics in Fraud Detection
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Key takeaways
Biometrics effectively prevents digital fraud like deepfakes by analyzing unique characteristics, ensuring secure and fast processes.
Integrating biometric solutions reduces operational costs, facilitates regulatory compliance, and improves user experience during digital verification.
Industries such as banking, insurance, social media, and dating platforms use biometrics to protect against financial fraud, fake profiles, and identity theft.
Didit offers free and unlimited biometric identity verification, accessible to businesses of any size, powered by advanced AI and fully customizable.
Biometrics is a fundamental tool for combating and detecting digital fraud. In recent years, driven by generative AI and notorious deepfakes, these crimes have skyrocketed, and only biometric tools that analyze people's physical characteristics for identification can effectively counter them.
The numbers speak for themselves. Various reports place the global cost of cybercrime in 2024 at over $10 trillion, nearly double that of the previous year. Among the most common techniques are deepfakes—AI-manipulated videos—which have increased their occurrence 31-fold in just one year. This highlights the critical need for businesses to implement reliable tools and mechanisms to verify customer identities and shut the door on fraud.
In this article, we'll explain what biometrics really is and how it works, what types of fraud it helps combat, and how Didit applies this technology to help businesses protect themselves against growing (but very real) digital threats.
What is Biometrics and Why is it Valuable in Fraud Detection?
We define biometrics as a technological method that uses people's unique characteristics to verify their identity. There are two main types of biometrics: physiological and behavioral.
- Physiological biometrics: Refers to unique physical characteristics, such as facial recognition, fingerprints, or iris scanning.
- Behavioral biometrics: Uses specific patterns like the way we type on a keyboard, move a mouse, or even walk.
This makes biometrics especially useful in fraud detection because it's extremely difficult to falsify or manipulate. For example, a face has unique characteristics that are very challenging to artificially replicate, especially in real-time.
This is why international organizations like the Financial Action Task Force (FATF), whose recommendations influence Anti-Money Laundering (AML) policies across countries and territories, emphasize the importance of biometrics in combating financial fraud.
What Can We Use Biometrics For?
The primary purpose, obviously, is to enhance security and accuracy in digital identity verification processes. Users verify and authenticate themselves through something they are (their unique biometric traits), rather than something they know (passwords) or have (external devices). These methods significantly reduce the risk of identity fraud or unauthorized access to various platforms.
This technology also influences other applications, such as payment authentication.
How Biometrics Helps Detect Fraud
Biometrics is a cornerstone in the fight against fraud. During the identity verification process, facial recognition follows the document validation phase and relies on two fundamental pillars:
- Facial verification. The user captures their face in real-time, which is then compared with the photo on the identity document used during the document verification phase.
- Liveness detection. This verifies that the person in front of the camera is actually a real person, not a photo or mask. This process can be active (requiring user action) or passive (requiring no user action). Learn more about the liveness detection process in this blog article.
This process takes just seconds and ensures that the person attempting to verify is truly who they claim to be.
Four Business Benefits of Implementing Biometrics
- Enhanced user experience. Biometric processes eliminate complex manual steps, reducing friction during onboarding.
- Lower operational costs. While these technologies may seem expensive, their fraud prevention capabilities reduce associated financial losses (fraud, fines, etc.).
- Regulatory compliance. Helps businesses meet national and international KYC/AML regulations, avoiding penalties.
- Improved customer trust. By strengthening onboarding security, users see that measures are in place to prevent fraud.
Practical Applications of Biometrics Across Industries
Due to its unique security and effectiveness, biometrics is especially valuable in critical sectors where identity verification is both a regulatory and operational requirement. Here are some classic examples:
- Financial sector. Financial institutions face enormous risks related to identity fraud. In fact, according to PwC data, 47% of companies suffered identity theft-related attacks in the past year. Biometrics is essential in the financial sector for:
- Completing onboarding processes in seconds
- Complying with KYC/AML regulations
- Preventing fraud in account openings and identity theft
- Insurance sector. Insurance fraud causes annual losses of more than $80 billion in the United States alone, as reported by the Coalition Against Insurance Fraud, an American organization. Thanks to biometric solutions, insurers can:
- Verify identities during policy enrollment
- Optimize processes, resulting in reduced operational costs
- Comply with regulations and audits
- Dating platforms. Scams through dating apps have existed practically since their inception. First there was catfishing, where scammers pretended to be someone else; now there's kittenfishing, an identity misrepresentation variant involving exaggeration of personal qualities. These types of fraud scams are growing: one of the most notorious cases was Simon Leviev, known as the "Tinder Swindler," who even had a Netflix documentary made about him. Thanks to biometric solutions, dating apps can:
- Verify the identity of singles
- Generate more trust among users and non-users
- Improve overall security
- Social media. More than 130 million fake profiles were detected and removed from Facebook alone, according to Meta's 2024 Transparency Reports. Having a biometric solution can help social platforms:
- Verify and authenticate user identities, reducing fake profiles
- Protect the community from deepfake-related fraud or account theft
- Improve security, increasing trust and decreasing online abuse
How Much Does a Biometric Solution Cost? Didit's Approach to Democratizing Access to This Technology
For many businesses, the cost of traditional biometric or identity verification solutions is often prohibitive. We understand that despite the advantages, many companies are forced to forgo this security technology layer because they cannot afford the high costs. At Didit, however, we want to democratize access to digital security through a free and unlimited identity verification service that includes:
- Document verification that allows us to verify and authenticate submitted documentation.
- Facial recognition with configurable liveness detection to ensure that the person attempting verification is truly who they claim to be and is present at the time of verification. Both passive and active liveness detection models help with this verification.
All this technology that we make available to businesses, regardless of their size or industry, is powered by more than 10 proprietary AI models that help us detect document inconsistencies or sophisticated fraud attempts such as deepfakes, masks, or pre-recorded videos.
How to Get Started with Biometric Solutions
To begin, simply sign up for Didit's Business Console, which is completely free. Once you register with your business email and create your account, you can start verifying identities directly from the platform if you wish.
→ You can customize the type of liveness detection method you want to implement: 3D Action & Flash, 3D Flash, or Passive.
→ You can customize the Similarity risk thresholds (resemblance between the document photo and the image captured during the biometric phase) and Liveness Detection. These indicators will allow sessions to be automatically accepted or rejected, or placed under review if you've selected particularly restrictive indicators.
Conclusion: Biometrics Is Your Best Ally Against Digital Fraud
Although it may seem like it, biometrics is not a futuristic tool. For many companies like yours, it can be an essential ally in protection against digital threats. At Didit, we believe digital security should be accessible to all businesses, especially with the growing threat of deepfakes and generative artificial intelligence.
That's why we invite you to discover our free and unlimited identity verification plan. You'll see how to protect your business without facing unnecessary costs or additional friction. Click on the banner below and start protecting your company today.
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