Know your customer or KYC has been the cornerstone of every merchant’s compliance policy for decades. However, with transactions rapidly shifting online around digital identities, merchants today face huge challenges in reliably verifying customer identities remotely. This is where electronic KYC or eKYC comes in as a game-changer. 

According to Juniper Research, eKYC adoption will increase by nearly 70% globally between 2022 and 2024, as merchants and financial institutions race to implement robust solutions to onboard customers and mitigate fraud in real-time while optimizing operational efficiency. For merchants, getting eKYC right means maintaining security standards across borders as emerging technologies fundamentally transform identity verification practices worldwide. 

This also represents a $12 billion revenue opportunity. In this blog, we analyze the 2024 global eKYC landscape for merchants - key drivers shaping worldwide adoption, implementation models, regional perspectives, case studies of best practices and an outlook of the future shaped by pioneering innovations using biometrics and artificial intelligence.

Key drivers and barriers for eKYC adoption

eKYC adoption is accelerated by multiple converging factors even as certain barriers impede implementation across contexts. 

Increasing digitalization and nееd for seamless customer onboarding

Thе massivе digital transformation in banking and financial sеrvicеs couplеd with fiеrcе compеtition is compеlling institutions to find innovativе ways to sеcurеly onboard nеw customеrs fastеr whilе kееping usеr еxpеriеncе sеamlеss. 

еKYC solutions еnablе rеmotе, papеrlеss onboarding by automating idеntity vеrification chеcks using digital KYC data and machinе lеarning algorithms. Thеy promisе fastеr customеr acquisition alongsidе rеducеd risk. 

Data privacy and sеcurity concеrns  

As institutions adopt cloud computing and biomеtrics, thеy also inhеrit associatеd cybеr risks rеgarding capturе and accеss of sеnsitivе customеr data including financial information, IDs and biomеtrics. 

Stringеnt rеgional data protеction rеgulations also nеcеssitatе localizеd data storagе. Addrеssing thеsе concеrns by еmbеdding privacy and sеcurity by dеsign fеaturеs is vital for еKYC dеploymеnt.  

Regional regulatory frameworks and standardization

While the FATF guidance on digital identity systems promote global harmonization, significant fragmentation persists across jurisdictions regarding legally valid eKYC processes, ID proofing requirements and data sharing protocols. 

Nations and economic blocs are actively defining localized frameworks aligned to context-specific risks. But interoperability challenges remain as institutions straddle regulatory environments. Progress toward unified legal and technology standards is uneven globally.

eKYC implementation models

Institutions worldwide are adopting diverse technology architectures and protocols to enable the eKYC verification process according to their contexts. 

Centralized national systems 

Governments across Asia and Europe have invested in creating centralized, national biometric ID databases combined with eKYC platforms for real-time identity verification by request. While enabling uniformity in onboarding aligned to local laws, concerns persist around privacy, surveillance and resilience risks regarding centralized sensitive data storage.

Decentralized blockchain-based models

Blockchain-based self-sovereign identity models allow users more control over their data using private keys while supporting verification by institutions based on need using decentralized identifiers. 

Platforms like Bloom and Ontology allow customizable eKYC flows protecting user privacy. Standards development continues around decentralization to address scalability and interoperability.  

Federated identity models 

Federated authentication models provide single sign-on convenience to customers while sharing minimum necessary identity data among institutions to fulfill eKYC. Open standards around secure data exchange protocols are emerging to allow real-time data validation from original sources while optimizing consent and data sharing across organizations.

eKYC by region

Global perspectives on eKYC vary significantly attributed to regional maturity, regulatory priorities, competitive landscapes and customer preferences around digital identity.

North America

US leadership in eKYC standards

The US has pioneered industry standards for eKYC proofing alignment to AML guidelines. Most large banks now offer onboarding using identity documents, with advanced use cases around biometrics and liveness detection. Strict data privacy norms however limit storage and reuse of verification data.

Increased adoption in Canada

Canada recently permitted remote video KYC for the first time, though significant variability persists based on institution-specific interpretation of eKYC compliance. Startups are now addressing this market gap with a range of SaaS solutions.

Europe  

EU framework for secure eKYC data sharing

The EU has tabled proposals to facilitate cross-border eKYC between banks while upholding high data protection standards including explicit consent. GDPR-compliance is also driving standardized ecosystems for third-party identity verification.

Country-level initiatives and pilots 

Nordic regions lead in national identity schemes integrated with eKYC. The UK, Spain and Switzerland have growing adoption across sectors. Central banks are piloting decentralized identity models.

Asia Pacific

Government focus on digital identity programs   

India, China and Malaysia are implementing national foundational ID databases enabling remote eKYC. Australia initiated 2011 reforms to allow electronic verification using robust documents and data sources. 

Private sector innovation

In Indonesia and the Philippines, mobile money led eKYC is thriving attributed to optimized apps, agent networks and tiered risk-based verification by leading providers.  

Middle East and Africa

Mobile money eKYC adoption

Many nations allow eKYC for basic mobile money accounts using contact details, evolving towards SIM registration data verification models to lower barriers to access.

Challenges around infrastructure and regulations

Slow progress in laying clear eKYC standards aligned to FATF recommendations, limited ID coverage and internet connectivity issues are barriers specifically in Africa.

eKYC case studies

Industry leading implementations of eKYC point to emerging benchmarks and best practices for balancing seamless customer experience with watertight identity proofing across access channels.  

Successful national rollouts  

Estonia  

The Estonian “e-Residency” model allows citizens and businesses globally to acquire a transnational digital ID for accessing public and private services including bank accounts opening. Near-field communication enabled national ID cards combined with back-end integration between identity providers and banks power remote, paperless onboarding meeting AML standards.

India

The Aadhaar national biometric ID database now covers over 90% of Indian residents, enabling real-time eKYC and video KYC authentication using iris and fingerprint data APIs regulated through India Stack protocols to optimize consent while safeguarding inclusion. Leading fintechs leverage this infrastructure for onboarding across services. 

Decentralized eKYC using blockchain

Civic  

The CiviKey digital identity platform allows users to share verified attributes with institutions to meet KYC needs using decentralized identifiers on blockchain without exposing personal data. Device and biometric binding create persistent digital identities passing integrity and authentication tests on demand.  

Bloom  

Bloom enables passwordless onboarding using “BloomID” based on cryptographic attestations from vetted identity providers that validate user legitimacy. Institutions can customize attestation requirements while individuals retain ownership over original documents minimizing data sharing. 

eKYC innovation by fintechs  

PayTM  

PayTM’s onboarding API verifies Aadhaar details, contact points, PAN validity and facial recognition images to create instantly usable e-wallets compliant with Indian KYC categories. Segmented data access controls different permissions. Instant account upgrades motivate continued usage.

WeChat Pay  

WeChat Pay’s eKYC leverages the messaging apps vast user data including linked bank accounts, facial biometrics and government IDs to offer seamless payments access. Risk-based algorithms customize identity checks balancing security, inclusivity and user experience. Consent driven data sharing with Tencent partners enables credit and insurance access.  

The future outlook for global eKYC

While still early days, specialist implementations and proprietary environments currently define much of eKYC today. The next frontier will see standards and interoperability take centerstage alongside ethical frameworks as foundational ID systems evolve.  

Biometrics and liveness detection

Sophisticated biometric authentication using multi-modal biometrics will dominate future eKYC systems mitigating presentation attacks through challenge-response liveness checks, hardware security and on-device processing. Compatible device and scanner standards will emerge. However, expectations of inclusivity and accessibility will shape deployment.

Evolution of regulations and ethics around digital IDs 

As public and private identity ecosystems develop, issues around surveillance, overreach, bake-in biases and consent arbitration will gain prominence already informing developments around decentralized identity. Data ethics frameworks embedded into technical design will emerge as regulatory priorities focused on proportionality, transparency and accountability of digital ID systems globally.

Conclusion

The responsible evolution of eKYC balancing both institutional risk management needs as well as emerging digital rights around identity presents an unprecedented opportunity for the financial sector to rebuild public trust through ethical innovation. 

The institutional incentives are clear - by 2024, cost savings from seamless eKYC adoption are projected to exceed $60 billion globally, even as billions more remain outside formal systems without trusted IDs. The priorities laid out in this perspective article aim to expand access for the underserved while upholding rights and promoting systemic resilience worldwide.