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The Promise and Pitfalls of Artificial Intelligence in Digital Identity

Jason Howard

January 20, 2023
Table of Content

You can’t go anywhere without hearing about AI these days. Generative AI like ChatGPT is increasingly being used for many different applications — as well as being scrutinized for its role in plagiarism and copyright infringement. At the same time, AI-related stocks are soaring to record valuations. 

When it comes to using AI to help manage digital identity, this technology offers great promise to businesses, but it also can also be misused for nefarious purposes. There is great potential for manipulation by fraudsters who can use AI tools in helping them generate fake information or commit identity fraud. Like any other innovative technology, its potential for good or evil lies in the hands of those that are using it. In this blog, we will explore the benefits and pitfalls of AI as it relates to digital identity.

First let’s take a look at the good

Document Verification:

AI algorithms can validate the authenticity of identification documents such as passports, driver's licenses, or ID cards. By analyzing various security features, including watermarks, holograms, and micro-printing, AI systems can detect fraudulent or tampered documents.


AI can utilize biometric data, such as fingerprints, voice patterns, or iris scans, to verify a person's identity. By comparing the captured biometric data with existing records in databases, AI algorithms can accurately authenticate individuals. It can also use recognition technology compares a person's facial features captured in real-time with the reference image on their identification document

Behavioral Analysis:

Systems can analyze user behavior patterns to determine if an individual's actions are consistent with their known patterns. For example, AI can detect anomalies in typing style, mouse movement, or navigation behavior, which could indicate potential identity theft or account takeover attempts.

Continuous Monitoring:

AI can help to monitor user interactions in real-time, providing an additional layer of security. It can flag suspicious activities, such as multiple verification attempts from different locations or unusual transaction patterns, and trigger additional verification steps to ensure the user's identity.

How Fraudsters Use AI for Harm

On the other hand, there are numerous ways in which bad actors can use artificial intelligence to carry out their attacks. 

One way is for help in phishing scams. Fraudsters can use generative AI for help in writing the text for phishing emails or SMS messages to make them sound more professional and mimic the approach and grammar used in real professional communications, since generative AI has been trained to do just that. Generative AI can also scour the web for public information to provide personal details about individuals that attackers target with spear phishing campaigns. In general, AI makes social engineering rather easy for criminals. Instead of scouring various platforms to obtain information about individuals, generative AI can gather all publicly available information about a person in mere seconds. 

AI can also greatly aid cybercriminals with sophisticated document forgery. AI can create very real looking document imagery that can fool many anti-fraud systems, thus allowing the attacker to more easily commit identity fraud. Businesses that have difficulty verifying which documents are authentic will face potentially massive fraud losses and a hindrance to the customer experience, as well as possible scrutiny from regulators.  

AI technologies, such as generative models, can also be used to create realistic synthetic identities. Fraudsters can leverage AI-generated synthetic identities to bypass traditional identity verification methods, as these identities may not have a history of fraudulent activities and can deceive anti-fraud systems that businesses have in place. 

The Great Cat-and-Mouse Game

AI is simply the latest tool fraudsters have at their disposal in the ongoing cat-and-mouse game with businesses. When businesses develop one set of defenses, fraudsters pivot, businesses then react again and on it goes. 

Businesses, then, need a robust platform in place to successfully and continually defend against identity fraud, one that seamlessly combines the strengths of AI-powered verification processes with human review where necessary for especially difficult cases.

AI is here to stay, whether we like it or not. Businesses should look at how they can incorporate AI and ML to strengthen their identity verification and onboarding processes, and keep their platform free from fraud while providing a great experience to customers. 

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"The Promise and Pitfalls of Artificial Intelligence in Digital Identity"