PYMNTS Report Highlights the Importance of Global Identity Platforms

Global companies lose an average 3.1% in annual revenue due to inadequate digital identity verification systems, according to a recent PYMNTS Intelligence report.

For the 350 respondents surveyed for “The Hidden Costs of ‘Good Enough’: Identity Verification in the Age of Bots and Agents” report, that percentage translates to a collective $95 billion each year. The report found that even when digital verification systems defend against fraud, many have other weaknesses.

“Many systems wrongly identify valid consumers or suppliers as potential or actual bad actors, a mistake that triggers financial losses when frustrated customers drop out and limits opportunities for market expansion,” according to the report. “Companies may also not trust that their current system is capable of onboarding businesses or suppliers that may be new or in other countries.”

The report highlighted five key findings around digital identity beyond the lost annual revenue.

1. Identity Failures Cost Companies

The report found that one in two global companies have bad customer experiences and high costs for manual reviews, while 56% face threats from manual bots and agents.

“As the AI-driven threat landscape evolves,” according to the report, “companies with robust global digital identity systems are better equipped to tackle malicious bots and agents and move from surviving in the AI-driven economy and its rapid changes to thriving.”

2. KYC and KYB Processes Can Make or Break Onboarding

Nearly two-thirds of companies say gaps in Know Your Customer (KYC) and Know Your Business (KYB) processes limit their expansion opportunities.

“More than half lose customers to onboarding drop-offs due to friction,” according to the report.

“Over four in 10 (44%) struggle with false positives that mistakenly flag legitimate customers as illicit.”

3. Companies Face a Mix of Overconfidence and Vulnerabilities

The report found nine in 10 companies face challenges from bot traffic, with 59% struggling against bot-driven fraud. At the same time, 96% said they’re doing a good job detecting harmful bots.

Furthermore, the report found that more than four in 10 companies have experienced Know Your Agent failure rates that led to losses or incidents related to adversarial bots and agents. 

“Added up, these failures and costs can be thought of as the ‘hidden tax’ for using a digital identity system that seems ‘good enough,’” according to the report. “This mistaken approach is costing companies revenue, limiting growth and hindering customer experience, and it’s increasingly a liability.”

4. Global Identity Platforms Deliver Quality and Reliability

Nearly 80% of companies using a global identity platform said the vendor drives confidence in verification processes.

“An identity platform that is global in its capabilities has major advantages over one that is narrowly focused on a geography or niche,” according to the report. “It uses international data sources to authenticate the identities of individuals and businesses across different countries, comply with KYC and AML requirements across jurisdictions and provide secure, streamlined onboarding for consumers and customers around the world.”

5. Closing Identity Gaps Leads to a Competitive Advantage

The report found 83.4% of companies using a global identity platform rate it as high performing, and nearly 94% say it makes KYC and KYB management easier over time.

“Unlike stand-alone data checks or manual oversight, global identity platforms consistently deliver fewer issues, stronger performance and a clear strategic advantage,” according to the report. “The data make it clear that global platforms deliver higher confidence and stronger performance across the board and are better equipped to handle cross-border complexity and compliance.”