Online Identification: Trends, Regulation and What Comes Next

Online identification has become core infrastructure for digital onboarding. It is no longer just a compliance step. It defines how businesses manage risk, prevent fraud and build trust with customers.

Several structural developments are shaping the future of digital identity verification.

AI-Driven ID Scanning Becomes the Standard
Artificial intelligence now powers modern ID scanning systems.
AI-based OCR reads document data automatically. MRZ recognition verifies machine-readable zones. Fraud detection models identify document manipulation and inconsistencies in real time.
Advanced ID scanning solutions can recognize thousands of document types across more than 200 countries and support dozens of languages. Automation reduces manual review and increases onboarding speed.

Read more about Bluem’s ID scanning and identity verification solutions here:

https://www.bluem.nl/en/oplossingen/identity/ok-id

The next phase of development focuses on explainable AI. Under the EU AI Act, identity verification systems will fall into regulated categories requiring transparency and human oversight. Automation will continue, but governance will tighten.

Stronger Biometric Verification

Biometric controls are evolving quickly.
Selfie comparison alone is no longer sufficient. Liveness detection, face match algorithms and injection attack protection are becoming standard features.
As generative AI tools improve, deepfake identity fraud will increase. This drives demand for multi-layer biometric verification.
Solutions that combine ID scanning, biometric face capture and liveness detection provide stronger protection while maintaining high onboarding conversion.

Learn more about Bluem’s Identity & eSign services and biometric add-ons such as Face Match and Liveness Detection:

eIDAS 2.0 and Digital Identity Wallets

A major regulatory shift in Europe is the introduction of eIDAS 2.0 and the European Digital Identity Wallet.
Member states must provide citizens with interoperable digital identity solutions. Businesses will need to accept wallet-based identification and higher-assurance electronic signatures.
This creates hybrid onboarding environments where document-based identification and wallet-based verification coexist.
Organizations should ensure their identity infrastructure supports Advanced and Qualified Electronic Signatures where required.

Reference: European Commission on eIDAS 2.0
https://digital-strategy.ec.europa.eu/en/policies/eidas-regulation

Convergence of Identification and Compliance

Identification no longer operates in isolation.
Modern onboarding integrates:

• ID document verification
• Biometric validation
• AML and sanctions screening
• Address verification
• Digital signing

Regulators expect structured audit trails and traceability. Identity verification results must feed directly into compliance decision engines.
For sectors such as fintech, iGaming, leasing and financial services, identification, compliance and affordability checks are increasingly connected.

Data Sovereignty Changes Infrastructure Decisions

Data sovereignty is one of the most important developments in digital identity.
Governments are tightening rules on where personal and biometric data can be stored and processed. GDPR already limits international data transfers. Additional national requirements are emerging across Europe and globally.

Organizations must evaluate:

• Where identity data is hosted
• Which cloud providers are used
• How cross-border onboarding flows are structured

Failure to align with data residency requirements can create regulatory exposure.
Data sovereignty is not only a legal issue. It influences vendor selection, system architecture and expansion strategy.

Privacy and Attribute-Based Identity

Another emerging trend is selective disclosure of identity attributes.
Instead of sharing full identity documents, systems may confirm specific attributes such as age or residency status. Digital identity wallets support this model.
Identity verification is moving toward more granular, privacy-aware models.

This aligns with GDPR principles of data minimization and purpose limitation.

Reference: GDPR overview
https://gdpr.eu

What to Expect

In the coming years, expect:

• More AI-driven automation
• Higher biometric assurance standards
• Broader adoption of digital identity wallets
• Stricter data sovereignty requirements
• Increased regulatory scrutiny

Online identification will become more structured, more regulated and more integrated into national digital strategies.
Organizations that treat identification as core digital infrastructure will be better positioned for growth and compliance.
If you are reviewing your onboarding setup or exploring secure ID scanning, biometric verification or digital signing solutions, now is the time to evaluate whether your current infrastructure is ready for the next regulatory phase.