The fintech landscape is evolving at a pace that requires constant innovation and adaptation. As digital lending, online account opening, and remote financial transactions become standard, so too does the need for risk mitigation through identity verification and other fraud prevention techniques.
The stakes have never been higher for both lenders and the customers they serve. According to a report by SentiLink covering 236 million financial applications in 2025, identity-theft rates in auto lending average ~3.28% and in deposit account openings (DDAs) the identity-theft rate was ~7.85%. Adding an advanced identity verification to your lending workflow protects your business and clients.
Why identity verification is no longer optional
According to TransUnion, U.S. lender exposure to synthetic identities (which is highly related to weak identity verification) rose from $3.0 billion in H1 2023 to $3.2 billion in H1 2024, a 7% year-over-year increase. The auto-loan segment accounted for ~$2.0 billion of that exposure.
The rise of digital banking and online lending has brought convenience to consumers, as well as new opportunities for fraudsters. False and synthetic identities and account takeovers are increasingly common. Even an untalented scammer can create a photo-realistic ID image on the darkweb in under ten minutes, which can then be used to open accounts, initiate loan applications, or take over accounts from existing good customers. The impact of identity fraud is devastating both to institutions, and to customers.
For fintech lenders, the challenge lies in creating a smooth onboarding experience while ensuring that every customer is who they say they are. Traditional manual verification processes can’t keep up with the speed of digital lending, and basic data checks alone no longer provide sufficient protection.
According to IDScan.net analysis, between 2% and 5% of identities are flagged as suspicious during new account opening. That’s why modern lenders are embracing automated identity verification by integrating advanced ID verification, biometric checks, and facial recognition directly into their onboarding workflows.
How lenders are addressing identity challenges
IDScan.net has insight into how lenders are addressing identity challenges across every stage of the lending lifecycle. Here are a few key takeaways:
- Frictionless security is the new standard
Lenders can’t afford to choose between a secure experience and a simple one. The most successful organizations are embedding ID verification directly into their loan origination or loan servicing processes, so customers never leave the digital flow. With IDScan.net’s DIVE technology integrated into lending software, lenders can verify identities in seconds, without adding steps or slowing down approvals. - Fraudsters are getting smarter, and your identity verification needs to keep up
The sophistication of fake IDs, deepfakes, and identity spoofing has increased dramatically. The fintech community recognizes the importance of using AI-driven verification tools that can detect forgeries, mismatched faces, and digitally altered documents in real time. - Partnerships are key to scalable security
One consistent theme throughout the conference was collaboration. No single technology provider can tackle the growing threats alone. By offering a best-in-class digital identity verification solution, lenders simplify integration and centralize workflows, while remaining focused on their core technology.
What is DIVE?
DIVE (Digital Identity Verification Engine) is an identity-verification solution offered by IDScan.net that enables businesses to verify users remotely and automatically. It combines document scanning, facial recognition, and optional third-party database checks into a single API.
First, DIVE captures a photo and analyzes the identity document (ID, drivers license, or passport) using both barcode analysis and optical character recognition (OCR). Some fraudsters us fake physical IDs (either ordered from foreign, darkweb websites or doctored using printed photos on a stolen ID) – they then use this ID the same way they would use a legitimate ID, capturing a photo of the live document.
Other fraudsters use AI tools, or basic Photoshop, to create a fake image of an ID, using a downloaded photo and then adding their photo, or changing key information to create a synthetic identity. In these cases, the ID does not actually exist outside of the doctored image. These fraudster often target lenders who allow for document upload, as it allows them to insert their Photoshopped ID photo into the workflow, instead of requiring live document capture.
In either instance, DIVE remotely analyzes the ID, to provide a confidence score on the ID’s validity. DIVE also performs tamper checks and advanced fraud detection.
Next, the user is guided through a face matching selfie video process, with embedded anti-spoofing. This matches the user’s face to the photo on the ID. This ensures a live human, and the owner of the ID, is the one initiating the digital transaction.
Lastly, third party risk scoring is layered on top of the document confidence and face match score. This delivers an overall result that allows lenders a high degree of confidence that they’re transacting with a legitimate human using a legitimate ID.
DIVE offers global coverage and can integrate optional third-party data sources, like DMV, SSA, and watchlist databases, for enhanced risk assessment. The API verifies 97% of individuals in under 12 seconds.
A shared vision for the future of fintech
IDScan.net and our partners share a commitment to helping financial institutions serve customers faster, more securely, and more confidently. The fintech integrations offered by IDScan.net for identity verification enable lenders to:
- Verify customer identities remotely or in-branch
- Reduce fraud risk without adding friction
- Maintain compliance with KYC and AML regulations
- Improve conversion rates by streamlining onboarding
As the fintech industry continues to grow, the focus on trust and transparency will only deepen. Advanced identity verification is not just a tool for compliance; it’s the foundation for customer confidence and operational excellence.
Getting started
As digital lending continues to evolve, identity verification is becoming a core pillar of operational success, not just a compliance requirement. The ability to integrate IDScan.net into various fintech software systems represents a shared commitment to innovation, security and a frictionless borrower experience. By integrating DIVE directly into your lending software, lenders can confidently onboard customers, detect fraud in real time and meet evolving KYC and AML standards without compromising speed or user experience.
To learn more or request a demo, visit IDScan.net’s banking identity verification page.
