Principal Financial has adopted a new digital identity verification system that replaces traditional knowledge-based authentication with a combination of government-issued ID checks and biometric facial recognition. The deployment is part of the company’s broader effort to strengthen its digital security posture and protect customers from increasingly sophisticated online fraud attempts. The initiative, delivered in partnership with Onfido, now part of Entrust, earned Principal a 2025 CSO Award for innovation in security practices.
The platform uses biometric liveness detection to confirm that an individual is physically present during verification, helping to counter spoofing attempts, including those involving deepfake media. These safeguards are designed to reduce the risk of fraudulent account creation and unauthorized access, while ensuring that legitimate customers can complete verification quickly and with minimal friction.
Adaptive Security and Risk-Based Workflows
Principal’s implementation draws on capabilities from the Onfido Real Identity Platform, which offers a no-code orchestration layer that allows institutions to tailor verification flows according to risk signals. For example, the system can add extra verification steps if a transaction triggers elevated risk criteria, while streamlining the process for lower-risk scenarios. This flexibility enables a balance between fraud prevention and user experience, helping reduce abandonment rates while maintaining strong security controls.
The new authentication system also supports compliance with know-your-customer (KYC) and anti-money laundering (AML) requirements. Principal publishes its own AML policy outlining internal procedures and regulatory commitments, and the vendor platform has been independently tested to recognized standards for biometric performance and spoof detection.
Fraud Landscape and Emerging Threats
The decision to modernize identity verification comes amid growing concerns about digital fraud in the financial sector. Industry forecasts from Juniper Research project that global e-commerce fraud losses will rise from $44.3 billion in 2024 to over $107 billion by 2029. The prevalence of AI-driven attacks, including synthetic identities and deepfakes, is accelerating the need for more resilient authentication measures.
Recent reports from Entrust indicate that deepfake attempts targeting identity verification systems occur as often as every five minutes, with a 244 percent increase in digital document forgery attempts over the past year. These developments underscore the importance of layered defenses that can detect both human and machine-generated fraud tactics.
By adopting a system that integrates biometric checks, document authentication, and liveness safeguards, Principal Financial positions itself to respond more effectively to the evolving threat environment. The company’s approach reflects a broader shift across the financial services industry toward advanced identity verification technologies that can keep pace with the scale and sophistication of modern fraud.
Sources: CSO Online, Business Record, Principal Investor Relations
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By Cass Kennedy
