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FinTechs belonging to this category provide identification services, which are required for most banking services.
Introduction
Attitude of the country towards identification services
In the United States, there is no single, universally accepted means of identification. Regulations governing customer identification vary across sectors such as banking, broker-dealer services, and money transmission. Different government agencies and organizations implement these rules in diverse ways, often resulting in inconsistent policies and procedures for verifying identities. AML and KYC requirements also differ depending on the applicable regulatory framework. Some FinTech activities are subject to specific AML/KYC rules, while others are not directly covered. However, most providers still carry out identity verification because U.S. anti-terrorism and sanctions laws can impose liability even when no specific AML/KYC regime applies.
Legal affairs
Obligations and requirements to provide identification services
The obligations for providing identification services depend on the customer and the nature of the service. Identification is commonly required for AML/KYC compliance, anti-terrorism screening, child -protection measures, and accredited-investor verification. Service providers may outsource identity-verification functions but must still comply with privacy laws, including notice requirements and restrictions on the use of personally identifiable information (PII). States such as California impose stringent privacy rules governing PII, and providers handling data from other jurisdictions may also need to comply with regulations such as the EU or UK GDPR.
Additional comments regarding the legal situation for identification services or what FinTech’s must be aware of in this business area
Several U.S. states have enacted or proposed privacy laws modeled on the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR), including Virginia, Colorado, Connecticut, Utah, Oregon, and Texas. In sectors without specific identity -verification requirements, such as NFT platforms or investment advisers, service providers often still perform verification to address AML, sanctions, and related compliance risks.
Economic conditions
Market size for identification services and biggest companies in this business area
In the U.S., the identity verification market, including services like KYC and AML compliance, was valued at approximately USD 14 billion in 2025, according to a study by MarketsandMarkets and is projected to grow at a compound annual growth rate of about 15 percent through 2030. A significant portion of this market involves biometric identification and digital-authentication technologies.