US Gen Zers struggle with identity verification as ‘Digital Ghosts’: Socure

Socure has released a new study revealing that 35 percent of Gen Zers in the U.S. and nearly a third of legal immigrants are “Digital Ghosts,” lacking sufficient financial history to pass standard identity verification processes required for accessing financial and government services.

Digital Ghosts are, according to the report, characterized by minimal to no engagement with credit cards, loans, rental leases, home purchases, or mobile device plans. The lack of activity results in insufficient credit bureau history and public records, impeding their ability to navigate traditional ID verification systems.

The study found that 54 percent of Gen Zers report difficulties with identity verification, with a third citing their lack of a digital financial footprint as the primary issue. Over half have had to verify their identity in person multiple times, nearly as many have had to email or mail documents to prove their identity, and one in five have struggled to access student or college-related government services.

The report highlights a significant paradox: Digital Ghosts need a credit history to pass identity verification, but they require access to services to build that credit history.

Josh Linn, senior vice president of product and GM of compliance at Socure, emphasizes the need for modern technology and advanced analytics to address these challenges.

“At Socure we believe there’s a better way. By leveraging modern technology, alternative data, and advanced analytics, we can build an equitable finance ecosystem where everyone can access the financial services they need to thrive. Solving the identity challenges of underserved populations is not only an economic imperative, but a moral one. The industry must come together to prioritize financial inclusion,” adds Linn.

Additionally, Gen Zers exhibit apathy towards online identity security, with one in five unconcerned about identity theft and over a third believing their ID holds little value if stolen.

Legal immigrants in the U.S. encounter substantial barriers in accessing banking and government services.

Moreover, more than half report difficulties with identity verification, leading to significant limitations, as almost half of the respondents have been denied access to government services.

Nearly as many have been denied access to the job market and student loans, and one in five believe they will never achieve equal access to services compared to those born in the U.S.

Socure added alternative data sources to its selfie biometric KYC software last year to improve financial inclusion and user onboarding rates for people with “thin-file” digital profiles, like those in Gen Z.

Article Topics

digital economy  |  digital identity  |  financial inclusion  |  identity verification  |  Socure  |  United States