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The American "Digital Ghost": Lack of Financial Footprint Locks Millions Out of the Modern Economy, Socure Research Shows
Wednesday, May 29, 2024

More than 50% of Gen Z and Legal Immigrants Report Difficulties Verifying Identities Online

INCLINE VILLAGE, Nev., May 21, 2024 /PRNewswire/ -- Socure, the leading provider of artificial intelligence for digital identity verification, sanction screening and fraud prevention, today unveiled research study findings revealing that 35% of Gen Zers in the U.S. and nearly a third of legal immigrants are "Digital Ghosts" - those without enough financial footprint to pass through identity verification controls necessary to gain access to financial and government services.

Detailed for the first time, Digital Ghost demographics have little to no history of credit cards, loans, rental leases, home purchases or mobile device plans, leaving them without the credit bureau history and public records data to pass the traditional identity verification systems generally used to safeguard access to our most critical services.

The Identity Verification Paradox
The report lays bare a serious Catch-22 - Digital Ghosts are unable to build the credit history required by traditional identity verification systems, and yet without gaining that access, it's borderline impossible to build a financial footprint to begin with.

The paradox doesn't stop there. Other challenges for Gen Z and immigrant communities include:

    --  Both have had less time to accumulate educational degrees, jobs,
        property ownership, and other notable life events that produce
        verifiable records for verification
    --  Legal protections around minors' information and immigration data from
        the Department of Homeland Security further restrict access to necessary
        verification sources
    --  Legacy identity verification systems struggle with bias in name matching
        algorithms, incorrect address normalization, and insufficient coverage
        for localized address formats common in rural and densely populated
        areas where, in many cases, legal immigrants reside

Gen Z: Digital Natives, Yet Digital Ghosts
Despite growing up online and being recognized as digital natives, more than a third (35%) of American Gen Zers -- or 22.9 million people - are Digital Ghosts. This portion of Gen Z lacks a digital financial footprint or credit history, which holds them back from accessing life-improving services from financial institutions and the government such as student loans, bank accounts, financial aid and credit cards. With Gen Z amassing nearly $6T in wealth according to a 2022 study from the Federal Reserve, these Digital Ghosts represent a major market opportunity and economic driver.

Adding to the challenge, the Credit Card Accountability Responsibility and Disclosure Act of 2009 introduced a series of protection requirements for those under 21 signing up for a credit card, requiring a cosigner, income proof, and more. Intended to protect consumers with less financial experience, the Act contributed to deterring Gen Z from entering the financial system for longer.

The result - 54% of Gen Zers report difficulties with identity verification, with a third (35%) saying the biggest limiting factor is "having no digital financial footprint." In parallel, many Gen Zers face considerable friction when attempting to access financial and government services that many Americans take for granted.

    --  Over half of Gen Z (51%) say that they've had to go in person multiple
        times to verify their identity for financial accounts rather than simply
        signing up online.
    --  Nearly as many (46%) have been forced to email or mail copies of
        documents to prove their identity.
    --  One in five (20%) have had issues accessing student or college related
        government services such as federal student aid or college loans/grants
        due to difficulties verifying their identity.

According to this data, there are also pressing challenges related to financial literacy and trust.

    --  Nearly half (49%) have significant regrets and wish they'd applied for
        financial accounts earlier in life.
    --  Half (50%) of Gen Z did not feel prepared to enter the U.S. financial
        ecosystem after turning 18.
    --  One in five (20%) believe that banks do not want them as customers.
    --  Two in five (40%) Gen Zers have pushed off banking for as long as

Meanwhile, Gen Zers have grown apathetic around the value of their online identity. One in five Gen Zers in the U.S. (20%) are not concerned about identity theft, while over a third (37%) believe that no one would be able to do much with their identity if it were stolen. According to Javelin Strategy & Research combined losses from traditional identity fraud and identity fraud scams cost consumers $42.9 billion last year.

Legal Immigrants Face a Digital Wall
According to Socure's research, the legal immigrant population in the U.S. faces significant hurdles to accessing the opportunities offered by the American banking system and government benefits.

Nearly a third (31%) are Digital Ghosts, with little to no digital financial footprint or credit history, blocking access to financial and government services.

    --  74% of legal immigrants don't have any loans.
    --  Over half (56%) don't have a credit card.
    --  44% don't have any bank accounts.

More than half (51%) of legal immigrants say that they've had difficulties verifying their identity, which has led to several limitations across multiple aspects of their lives.

    --  Almost half (48%) say that they were denied access to government
        services as a result of identity verification issues.
    --  Nearly as many (45%) say they were denied access to both the job market
        and student loans.

Perhaps most distressing, many see this as a lifelong problem--with one in five (21%) saying that they'll never have enough of a footprint to have equal access to these services compared to those born in the U.S.

"Too many consumers today are locked out of the digital economy because identity verification systems rely on outdated data sources and methods," said Josh Linn, Senior Vice President of Product and GM of Compliance at Socure. "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."

A full breakdown of the research report and analysis can be found here. For more information on Socure's identity verification solutions visit

Socure conducted this research using an online survey prepared by Method Research and distributed by PureSpectrum among n=2,500 teenagers and adults (age 14+) in the United States. The sample was split between two samples, Gen Z aged 14-27 (n=2,000) and immigrants to the U.S. (n=500). The sample was split between gender, with a spread of age groupings within Gen Z and immigrants, a spread of the timeline of immigration, race groups, and geographies represented. Immigrant survey respondents or their parents were required to have Tax IDs in some form. Data was collected from March 28 to April 9, 2024.

The figure of "22.9 million Gen Zers in the United States" was calculated based on the following: In the U.S., Gen Z represents approximately 21% of the population, or more than 65.6 million people (Census: 2022 U.S. Census Bureau ACS 5-year Estimates - Table ID - DP05). 35% of these are Digital Ghosts, which equates to 22.9 million.

About Socure
Socure is the leading provider of digital identity verification and fraud solutions. Its predictive analytics platform applies AI and machine learning techniques with trusted online and offline data intelligence to verify identities in real-time. Socure is the only vertically integrated identity verification and fraud prevention platform with both IAL-2 and FedRAMP Moderate certifications, delivering advanced levels of assurance and the highest standards for security and compliance.The company has more than 2,300 customers across the financial services, government, gaming, healthcare, telecom, and e-commerce industries, including four of the five top banks, the top credit bureau and more than 400 fintechs. Organizations including Capital One, Citi, Chime, SoFi, Green Dot, Varo, Ingo, Robinhood, Gusto, Public, Poshmark, Stash, DraftKings, PrizePicks and the State of California trust Socure for accurate and inclusive identity verification and fraud prevention. Learn more at

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