Identity Verification in a Globalized World [New Research]

• 92% of businesses verify more foreign documents
• Half of surveyed business decision makers report a significant new revenue boost — of 21% or more — attributed to digital nomads.
• 80% of surveyed business decision-makers noticed an increase in identity fraud, which they associate directly with the growth of international clientele.

And that’s not all we learned. We asked plenty of questions on both sides, so read on or get the full version of the report in your inbox.

The digital nomad movement has shifted from being a niche lifestyle to a global phenomenon in recent years. Our research indicates that 92% of businesses worldwide are grappling with an increased volume of foreign documents requiring verification. 

Notably, half of these businesses report a significant revenue boost of 21% or more attributed to digital nomads. In the United States, 62% of surveyed business decision-makers confirmed this.

For businesses, there’s a clear opportunity to boost their revenue if they manage to ride the trend.

Contrary to the Instagram-style image often associated with the digital nomad lifestyle, reality paints a different picture. Wherever they go, digital nomads navigate a complex bureaucratic maze and often have to overcome a language barrier. Naturally, they deal with identity verification systems more frequently than an average person does.

Of course, the exact scenarios and their distributions are country-specific. For instance, digital nomads face the need to verify their identity while applying for work permits in the UAE (39%) and the US (36%) more frequently than nomads in other regions. In Mexico, digital nomads tend to apply for insurance (and verify identities in this context) more often than in Germany: 60% vs. 28%.

When investigating digital nomads’ journey, Regula compiled a list of typical activities requiring them to confirm their identity.

We also compared how smoothly these activities are performed across six locations popular among the digital nomad community: the United States, the United Kingdom, Germany, Spain, the United Arab Emirates, and Mexico.

Through this approach, the survey brought to light a comparative ranking of countries where businesses encounter difficulties in accommodating users who possess foreign identity documents.

Surprisingly, the United States emerged as the most frustrating destination for holders of foreign passports when it comes to identity verification processes. Digital nomads in the US faced difficulties during specific stages, including:

• buying airline tickets (22%) 

• crossing the border (21%)

• checking into a hotel/ renting accommodation (19%)

In the second spot, the United Arab Emirates presents its share of hurdles, particularly related to applying for a visa (25%), followed by applying for new documents (18%). Essential arrangements, such as buying airline tickets, checking into a hotel, and filling in medical insurance papers were mentioned by 17% of the nomads surveyed.

At the same time, Germany stands out as a prime example of effective identity verification for foreigners. Despite issues in getting long-term accommodation, the majority of other verification use cases, such as opening a bank account (10%), completing medical insurance paperwork (9%), and activating a new mobile phone or SIM card (7%) are pretty seamless.

Once a nomad enters a country, they have a ton of formalities to handle within a tight deadline: finding a place to live, getting a bank card to pay bills, buying a local mobile to call friends without burning a hole in their pocket, and more. 

The most common issues, however, seem to revolve around validity rather than first-time onboarding anywhere:

• Document validity periods (19%). Most identification documents come with expiration dates. When a digital nomad is away from their home country, renewing these documents on time can be problematic. 

• Providing proof of residency (19%). Digital nomads often lack a fixed residential address, making it hard to furnish traditional proof of residency documents like utility bills or rental agreements.

• Inconsistencies in information because of frequently changing locations (18%). Constant travel and changes in location can result in inconsistencies in the information provided during ID verification, potentially causing delays or rejections.

• Trust and credibility (18%). Nomads may encounter skepticism or a lack of trust from institutions due to the unconventional nature of their lifestyle and work arrangements.

Naturally, the extent of these challenges differs depending on the country. For instance, while 25% of nomads report struggling with proof of residency in the UAE, only 12% report the same challenge in the UK. 

Similarly, while only 14% of nomads based in Spain report any issues with the inconsistencies of changing locations frequently, 28% of UAE-based nomads again cite this as a major challenge. And while only 9% of Germany-based nomads report facing a lack of trust from institutions due to their unconventional lifestyle, it remains a challenge for 26% of US-based nomads. 

Also, when asked about their main concerns, digital nomads suggested three major risks they associate with the necessity of identity verification. First of all, they are afraid of losing their IDs or them being stolen. Second, they also worry that, not only can their physical documents be stolen, but their identity data itself is potentially at risk. This explains the third concern about using public Wi-Fi for remote identity verification processes, as they believe it can expose digital nomads to hacking attempts, man-in-the-middle attacks, and other cybersecurity threats.

There are some issues from a business perspective as well: first of all, the growing number of foreign document verification cases. 92% of businesses have already witnessed an increase, which amounts to 21% on average. Industry-wise, Travel & Hospitality reported the smallest increase (15%), while Insurance (27%) and Finance (25%) are leading the way.

Generally, US passports seem to be the most common in identity verification scenarios abroad: they were submitted in 34% of all the cases mentioned. This correlates with the general trend that American is the main nationality of digital nomads worldwide, so investing in effective processing of US IDs is worth a shot.

At the same time, businesses located in the UAE have to face the most significant diversity in terms of foreign IDs. While just three or four passports are mostly well ahead of the rest in other countries, the frequency of different nationalities beyond the top three is significant here.

80% of surveyed business decision-makers noticed an increase in identity fraud, which they associate directly with the growth of digital nomads among their clients. On average, this increase was estimated at 14%. The highest rates were reported by the Insurance (22%) and Finance (19%) industries.

Naturally, this caused additional concerns about digital nomads. 

40% of all surveyed representatives from businesses are generally worried that if some digital nomads attempt to use fake documents, it’ll be challenging to detect. One of the major reasons for this is the lack of document uniformity. Document types and their security features vary between countries, which may cause hiccups in document verification processes.

Another important factor mentioned by 36% of business decision-makers is language barriers. If a document is issued in a foreign language, it makes it difficult for staff to understand the content and accurately verify the information.

In response to the shifting landscape, businesses are adopting innovative methods and technologies for identity verification. They believe they need to increase their IDV budget by 20% to keep up with the trend.

Among the methods, biometric verification tops the list, with 57% of those surveyed already implementing it in their workflows. Verifying e-documents is the second most popular option: 53% already have it. One-third of those surveyed have plans to implement either option within a year.

At the heart of the above-mentioned challenges for digital nomads lies an imperfect ID verification flow, with each country and business enforcing its own unique rules, often lacking streamlined processes for foreign document verification.

It’s obvious that organizations can benefit significantly from the rising nomadism trend if they play their cards right. After all, digital nomads are also great consumers at the height of their purchasing power. 

Below, we suggest three tips on how each entity could bring the process to a new level, boosting both security and user experience.

Regula’s survey also revealed that 35% of nomads complained about limited ID document type support in some apps. To address this issue and create a more inclusive verification process, service providers need to extend the list of supported documents.

By broadening the range of acceptable identification documents, businesses can accommodate a more diverse group of users, including those who possess less common types of ID. 

Of course, this is easier said than done. Collecting a vast database of all possible ID variations is a challenge on its own. But being able to regularly and promptly update it brings the task to a whole new level. The issue is that you need a reference template, not only to get a general idea of what a certain document looks like, but to be able to analyze if everything is valid and in the right place.

Fortunately, there are already proven solutions on the market. Regula serves its identity verification solution with an extensive database that comprises over 13,000 identity document templates from all over the world. Given Regula’s strong background in document forensics, it’s the world's most comprehensive collection, and is also well-maintained.

A lack of remote verification capabilities was a concern for 19% of surveyed nomads. In today's digital age, where mobility is a fundamental part of work and life, the ability to undergo identity verification remotely is crucial.

To address this concern, organizations can work on implementing remote identity verification solutions where possible. This not only enhances convenience, but also aligns with the nomadic lifestyle, allowing individuals to verify their identity while on the move. 

Of course, this strategy naturally requires investing considerable resources in the technical side. A world-class remote IDV pipeline consists of five steps aligned with a general “ID plus selfie” framework. They involve:

• Collecting accurate identity data 

• Verifying document authenticity

• Using biometrics to bind a document with its presenter

• Assessing quality for all submitted images and videos

• Conducting liveness checks (for both individuals and their IDs)

The last element of the puzzle—but certainly not the least—is securely handling all this sensitive data.

Luckily, you don’t need to reinvent the wheel here, as there are proven solutions that can cover the whole workflow. Regula is one of the few providers that serves as a one-stop-shop for solving this challenge.

To make the verification process more accessible and user-friendly, service providers can and should take steps to localize their identity verification services into a broader range of languages. 

By offering multilingual support, businesses can cater to a more diverse user base, making it easier for digital nomads from different linguistic backgrounds to complete the verification process accurately and successfully.

Unlike the two previous strategies, this one is perhaps the one that demands the least resources, as long as you partner with a decent IDV service provider. Despite some natural associated costs, the ability (and willingness) of the IDV provider to offer localization is the most crucial factor to consider. Normally, such investments pay off in no time.