Digital Identity Verification Gaps Emerge as Critical Financial-Sector Risk

Digital identity verification has expanded beyond one-time KYC at account opening to encompass logins, transactions, fraud monitoring, vendor processes and lending. A lapse at any stage can escalate into fraud losses, wrongful customer rejections and a crisis of trust. PYMNTS Intelligence and Trulioo say these gaps now pose multibillion-dollar risks to businesses.

PYMNTS released findings from “Identity at Scale” on March 23, 2026, based on a survey of 350 enterprises conducted from August 1 to September 10, 2025. On average, companies verified identities across 4.4 workflows. Loan applications had the highest KYA threat rate, at 63.2%. Companies verifying identities in only a few workflows faced more AI bot attacks, fraud pressure and customer friction.