Socure can now verify more than 70% of 18-year-olds opening their first accounts, far surpassing any other provider in the market
Socure, the leading provider of digital identity verification and fraud solutions, announced industry leading data coverage and onboarding rates of Gen Z consumers with the latest data enhancements to its KYC solution. With the latest update, Socure can now verify more than 70% of 18-year-olds opening their first accounts, surpassing any other provider in the market by at least 30%.
Socure’s focused investment in innovative, trustworthy alternative data sources and entity resolution are key to identifying these hard-to-verify populations, and part of its ongoing commitment of ensuring inclusive access to financial services for all consumers. Gen Z consumers are often the hardest to verify, with limited or no credit history as they start to establish their digital footprint.
The Gen Z demographic, born between 1996-2012, currently earns $7 trillion across its global 2.5 billion-person cohort, according to Bank of America Research. By 2025, that income will grow to $17 trillion, and by 2030, it will reach $33 trillion, representing 27% of the world’s income and surpassing that of millennials the following year. This important segment of the population is clearly the future of business, but also presents identity verification challenges due to Gen Z’s thin, or even non-existent financial and credit histories compared to prior generations at the same stage of life.
The solution also delivers industry-leading data coverage for the even harder-to-verify 13-17 year old population. The ability to accurately identify this population took center stage as a federal bill was recently unveiled to establish a national minimum age for social media use. Under the bill, social media platforms would be barred from letting kids below the age of 13 create accounts or interact with other users and a parent or guardian’s consent would be required before creating new accounts for users under the age of 18 in order to keep kids safe online. Arkansas and Utah have already passed similar legislation.
With industry-best onboarding rates of up to 93% for 18-25 year olds, Socure is quickly closing the gap on onboarding rates of mainstream populations, currently up to 99%, as the company continues on its mission to verify 100% of good identities in real-time, and eliminating identity fraud for every applicant on the internet.
Verifying both the age and identity of Gen Z consumers is growing more critical with the emergence and growth of new financial products including custodial accounts, Buy Now Pay Later (BNPL), and services including online gaming.
Custodial bank accounts are a key strategy of financial institutions to enable Gen Z consumers under age 18 to develop responsible money management practices under the close watch of their parents/legal guardians, while developing a pipeline of new primary account holders upon their 18th birthday. In order to successfully complete a custodial to primary account conversion, accurately verifying their identity to comply with KYC/CIP regulations must be completed, just as it would with any new account.
Gen Z is also demonstrating that they are more averse to traditional credit offerings, such as credit cards, partly due to the rise of alternative solutions such as BNPL and other personalized solutions that provide immediate buying power at the point of sale without the friction associated with traditional credit offerings. In fact, according to a survey by Afterpay, Gen Z is the fastest growing demographic for the BNPL model.
Gen Z also represents the largest demographic of the $222B gaming industry proving their worth outside of the financial services ecosystem.
“Based on feedback from almost all of our customers, we know that attracting Gen Z consumers in particular are key to the longevity and growth of their businesses. Yet ironically, they are the hardest to identify and will abandon an app the moment friction is applied, which is traditionally used to deter fraud,” said Johnny Ayers, founder and CEO of Socure. “The new accuracy and coverage we are achieving with our KYC solution, is not only industry-leading by a long-shot, but is allowing organizations in all industries to unlock new sources of revenue by adding more young consumers safely into the digital economy.”