Home Blog Unlocking Digital Identity: AI’s Role in Verification and Proofing 

Unlocking Digital Identity: AI’s Role in Verification and Proofing 

Published: June 28, 2023
Writer at Plat.AI
Writer: Sona Poghosyan
Editor at Plat.AI
Editor: Ani Mosinyan
Reviewer at Plat.AI
Reviewer: Alek Kotolyan

In today’s digital age, personal data has become intrinsic to digital identity. Securing our digital identities has become necessary with the escalating use of digital services. Let’s explore the role of AI in enhancing security through analysis of various examples and the latest trends in AI identity proofing and verification. 

Dozens of industries and frequent elements of daily life are susceptible to identity theft online, and AI can help mitigate this threat. So, let’s discover how AI is revolutionizing the way we safeguard our personal data.

What Is a Digital Identity?

A digital identity is the amalgamation of all digitally stored credentials and personal data that uniquely represent an individual within the digital world. It encompasses a wide range of information, including: 

  • Personal information, such as date of birth, Social Security number, home address, and phone number 
  • Financial information, such as bank accounts and credit card numbers
  • Usernames
  • Passwords
  • Email addresses
  • Social media profiles 

Digital identities are a primary tool for confirming identity during diverse online transactions, including e-commerce, communication, and digital service usage. 

Digital Identity Protection: Identifying High-Risk Industries for Online Theft

Identity theft is a severe concern in the digital age, and several industries are particularly susceptible to this type of crime. Identity thieves often target industries that collect and store large amounts of personal information on their customers. Below are some examples of industries at an elevated risk of cyber attacks on their data vaults.

Financial Services

Financial services are the most vulnerable to identity theft due to the value of gathering private banking details. Service providers typically hold a wealth of sensitive personal and financial information on their customers, including bank account numbers, credit card details, and Social Security numbers. 

With the rise of online banking and voice payments, financial institutions have become a prime target for cybercriminals seeking sensitive financial information from their customers. Hackers often use methods like malware to disrupt your computer safety and gain access to financial accounts. Others may use social engineering tactics like phishing and scareware to manipulate users into sharing their personal information. 

If an identity thief successfully gains access to someone’s financial information, that breach can lead to unauthorized account access, fraudulent transactions, and significant financial losses for individuals and institutions. An identity thief can steal money, make unauthorized purchases, and even take out loans in the victim’s name. Financial identity theft can have long-lasting effects on the victim’s credit score, financial stability, and reputation.

Keeping up with the growing threat of cyber theft is a constant challenge, and that’s where AI has been entering the picture to fortify your personal data. Financial institutions implement security measures like two-factor authentication and encryption to combat identity theft, but they must continually update protocols due to evolving cyber threats. 


Healthcare organizations face heightened risks of identity theft due to the extensive personal information stored in medical records, including financial details, addresses, insurance data, and prescriptions. Telemedicine’s rise during the COVID-19 pandemic has increased the vulnerability of patient data to cyberattacks and breaches as more information has been made readily accessible online. 


Retailers have collected customer data for years to personalize their shopping experiences and improve marketing efforts. However, this valuable data can also make retailers an attractive target for cybercriminals seeking to steal personal and financial information.

Online retailers are distinctly vulnerable to identity theft. Online shopping involves the transmission of sensitive information, including credit card numbers and home addresses, which can be intercepted and stolen by hackers. 


Government agencies are often targeted by cybercriminals seeking to steal sensitive information. For example, the Internal Revenue Service (IRS) has experienced several data breaches in recent years, including one in 2015 that resulted in the theft of Social Security numbers and birthdates from over 700,000 taxpayers. This information can be used to file fraudulent tax returns or commit other forms of identity theft.

Similarly, the Social Security Administration (SSA) collects and stores sensitive personal information, including Social Security numbers and personal health information. If this information is compromised, it can be used for identity theft, healthcare fraud, or other illegal activities.

In addition, government agencies also issue identification documents, such as passports and driver’s licenses, which are often used as proof of identity. If these documents are stolen or counterfeited, they can be used for identity theft or other illegal activities. 


Education institutions are increasingly embracing digital systems to streamline their operations and store student information. This digitization includes sensitive data such as Social Security numbers, birth dates, addresses, and other personal data. 

While this transition offers numerous benefits, it also introduces significant security challenges. Cybercriminals can target these online systems and gain unauthorized access to valuable student information. This compromised data can then be exploited for various fraudulent activities, posing a threat to students’ digital identities.

Digital Identity Examples

Our digital identity comprises financial information, communication history, and other sensitive data that is used to verify our online identity. 

Let’s explore some of the most common places a digital identity is developed, including social media profiles, financial accounts, email accounts, digital identity verification services, and Internet of Things (IoT) devices. 

Social Media Profiles

Social media profiles contain a vast amount of personal information, which can be used to identify and track users. Social media profiles house a wealth of personal information, including names, locations, interests, and photographs, making them vulnerable to privacy and security risks. This data can be exploited for identity theft, fraud, and targeted attacks. 

One notable example of a social media profile breach is the Cambridge Analytica scandal, which involved the unauthorized collection and exploitation of personal data from millions of Facebook users. The incident highlighted the potential risks of sharing personal information on social media platforms and raised concerns about privacy and data security.

Additionally, the interconnected nature of social media platforms increases the potential impact of compromised information. To mitigate these risks, individuals should exercise caution in sharing personal details, regularly review privacy settings, and limit the audience for their posts. 

Financial Accounts

While passwords and other security measures generally protect financial accounts, they can still be vulnerable to identity theft and cyber-attacks.

A significant breach in the financial sector occurred in 2017 when Equifax, one of the major credit reporting agencies, suffered a cyber attack. The breach exposed the sensitive personal information, including Social Security numbers and credit card details, of approximately 147 million individuals. This incident underscored the vulnerability of financial accounts and the importance of robust security measures to protect users’ financial information. 

AI has revolutionized financial fraud detection by quickly spotting and preventing fraudulent activities, enhancing overall security in the financial sector.

Email Accounts

In 2020, a widespread phishing campaign targeted Microsoft Office 365 users, compromising numerous email accounts. The attackers used deceptive tactics to trick users into revealing their login credentials, allowing them unauthorized access to sensitive emails and data. 

This incident emphasized the ongoing threat of phishing attacks and the need for advanced AI-based email security measures to detect and mitigate such threats. Email accounts are often hubs of sensitive documents and communication, which makes them a likely target of cyber attacks. 

Digital Identity Verification Services

Digital identity verification services are becoming increasingly popular as more and more businesses move their operations online. These services allow businesses to remotely confirm the identity of their customers without the need for physical documentation or in-person meetings. However, this can introduce security risks if someone hacks through a digital identity verification service and accesses sensitive spaces like bank accounts or secured digital files.

An example of a breach in digital identity verification services involves the Aadhaar system in India. Aadhaar is a biometric identification system used for various government and private sector services. In 2018, a security flaw was discovered that allowed unauthorized access to sensitive personal data, raising concerns about the security of the digital identity verification system.

AI Solutions for Identity Proofing and Verification 

In today’s digital landscape, robust identity proofing and verification is paramount. To address the rising security challenges, the adoption of AI technology has ushered in a new era of identity verification trends. Some of the fastest risers include:

  • Facial recognition: Facial recognition technology has advanced significantly in recent years, allowing for more accurate and reliable identification. This technology uses algorithms to analyze unique features of a person’s face, such as the distance between the eyes or the shape of the jawline, to create a digital template that can be compared against a database of known faces. Facial recognition is becoming increasingly common for security and authentication purposes, such as unlocking devices or verifying identities for financial transactions.
  • Document verification: Document verification involves using AI technology to verify the authenticity of physical documents, such as passports or driver’s licenses. AI algorithms can analyze various features of a document, such as holograms, watermarks, or font types, to detect any signs of tampering or forgery. This technology can be used for identity verification in various contexts, such as online account creation or financial transactions.
  • Behavioral biometrics: Behavioral biometrics involves analyzing behavior patterns, such as typing speed or mouse movements, to create a unique user profile that can be used for authentication. This technology can detect suspicious activity or fraud, such as if a user’s behavior suddenly deviates from their usual patterns. When a user’s behavior deviates from their typical patterns, it can trigger an alert or raise suspicion within a behavioral biometrics system. The response to such differences depends on the specific implementation and policies set by the system. In some cases, it may prompt additional security measures, such as requiring further authentication steps or flagging the activity for manual review by a security team.
  • Voice biometrics: Voice biometrics involves using AI to analyze a person’s voice for identification purposes. This technology can analyze various features of a person’s voice, such as pitch, tone, and speech patterns, to create a unique voiceprint that can be compared against a database of known voices. Voice biometrics, such as voice payments or phone-based customer service, is increasingly used for security and authentication purposes.
  • Multi-factor authentication: Multi-factor authentication requires users to provide multiple forms of identification before granting access to a system or service. AI can be used to analyze various forms of identification, such as facial recognition or voice biometrics, to increase the security and reliability of the authentication process. Multi-factor authentication is becoming increasingly common in various contexts, such as online banking or e-commerce transactions.
  • Blockchain-based identity systems: Blockchain technology allows the creation of decentralized, tamper-proof databases that can be used for identity verification. These databases store personal identification information, biometric data, address and contact details, digital credentials, and transaction history, among other relevant information. AI can be used to analyze the data stored on these databases to verify the authenticity of identities and transactions. Blockchain-based identity systems are becoming increasingly popular for their security and privacy benefits, as they allow users to control their personal data without intermediaries or centralized authorities.

Key Takeaways

  • Digital identity encompasses personal information that defines a person’s online identity, including social media profiles, financial accounts, email accounts, digital identity verification services, and IoT devices.
  • Industries particularly susceptible to identity theft include financial services, healthcare, retail, government, and education.
  • AI identity proofing and verification is an emerging trend that uses various methods, including biometrics and document verification, to confirm a person’s identity.
  • AI can also be used to prevent identity theft by detecting and stopping fraudulent activity.
  • As AI advances, more businesses will likely begin using AI for identity proofing and verification.
  • However, there are also concerns about the use of AI in digital identity, including privacy and security risks.
  • Overall, individuals and businesses should be aware of the risks and benefits of digital identity and AI identity proofing and verification.

Sum Up

Although digital identity is integral to our lives, it is increasingly vulnerable to identity theft and fraud. However, AI technology in identity proofing and verification is a promising development to enhance security and streamline the verification process. AI-powered identity verification systems can analyze multiple data points, including biometric data, behavioral patterns, and historical records, to authenticate individuals with greater accuracy and efficiency.

Try our real-time predictive modeling engine and create your first custom model in five minutes – no coding necessary!

  • Fully operational AI with automated model building and deployment
  • Data preprocessing and analysis tools
  • Custom modeling solutions
  • Actionable analytics
  • A personalized approach to real-time decision making
By signing up, you agree to our Terms & Conditions and Privacy Policy.

Sona Poghosyan

WriterSona is a skilled writer, editor, and proofreader with years of experience in media and IT. Her work can be found in various tech, finance, and lifestyle publications. In her free time, she enjoys reading and writing about all things film and literature.

Recent Blogs