Why Trust Matters More Than Ever
The rise of the identity economy is redefining HR’s role in building trust. From digital verification and compliance to managing workforce risks, HR leaders must embed verification across the employee lifecycle to strengthen resilience and safeguard organisations.
With the rapid growth of the digital world, the “identity economy” has emerged as a revolutionary force shaping how we live and work today. Verifiable digital identities now serve as the foundation of trust in economic and social interactions. This shift from analogue to digital identities facilitates secure hiring and collaborations, particularly in remote work settings and the gig economy. With cases of identity fraud increasing over the past decade, HR professionals are on the front lines of building resilient organisations through stronger-than-ever verification processes.
Emergence of the “Identity Economy” – Impact on Recruitment, Onboarding, and People Management
The identity economy is transforming hiring, onboarding, and continuous people management in modern organisations. Faster, more secure decisions are now possible as HR teams take advantage of instant credential verification, employment verification, and digital identities. These processes not only reduce the risk of poor hiring decisions but also improve the candidate experience by avoiding delays and friction. For instance, in India, where fraudulent claims in resumes affect around 10% of background checks, with educational qualifications and employment history being the most common discrepancies, automated software enables real-time verification, significantly reducing onboarding time.
Additionally, identity verification in real-time and monitoring risks such as dual employment or credential fraud throughout an employee’s lifetime have become essential. In industries that are susceptible to these risks, such as IT/ITeS, 45% of inconsistent profiles in background checks identified during background checks involve moonlighting, often detected through dual employment checks or active GST registrations linked to PAN cards.
What This Means for Hiring & Workforce Management
Identity verification is no longer just a pre-hire ritual; it is an ongoing process throughout the employee lifecycle. As remote and hybrid models gain popularity, continuous re-screening has become crucial. Today, half of organisations re-screen all employees on a time, event, or compliance basis, bringing to light new risks often overlooked by pre-employment checks. In India, where employment fraud is on the rise, 85% of inaccuracies in IT industry profiles are linked to employment checks, such as forged documents from fictitious companies.
The remote, gig, and global hiring environments demand real-time, digital checks at scale. India’s gig economy, comprising 7.7 million workers in 2020, and projected to expand to 23.5 million by 2029-30, highlights this necessity. In sectors such as delivery, transport, and service, where much of the work is unsupervised, instant screening is vital for safety and compliance.
Beyond recruitment, HR today also acts as a risk manager, responsible for ensuring compliance with KYC, AML, labour, and data privacy regulations. India’s Digital Personal Data Protection (DPDP) Act, 2023, makes explicit consent and secure data processing mandatory, with penalties of up to ₹250 crore for non-compliance, further reinforcing the importance of HR’s role in ethical verification.
In industries such as BFSI, the gig economy, and healthcare, a single missed check can result in financial, legal, or reputational damage. In financial services, 29% of mismatched employment checks stem from candidate misinformation, such as falsified salary proof or undisclosed parallel employment as reported in AuthBridge Fraud Files 2025. IT is equally vulnerable, with 7% failing employment checks and 20%
highlighting resume discrepancies, often due to counterfeit qualifications to fit into a particular job profile.
Why Verification Can’t Be a Backend Step
Delayed verification enables deceptive hires to slip through, as seen in India’s medical profession, where 75% of inconsistent applicants present counterfeit work papers, even claiming experience at top facilities. More than 64% of Indian banks have forfeited transactions due to slow onboarding, which underscores the necessity of streamlined verification.
Delayed compliance deadlines may also attract penalties, particularly with changing laws such as the DPDP Act or RBI requirements for Video KYC in BFSI. In a cross-country survey, it was found that many cases of fraud in India result from collaboration, frequently in procurement and operations, highlighting the need for active, technology-enabled surveillance to prevent insider threats.
How HR Teams Have Turned Compliance into a Competitive Advantage
Securing client trust is achievable when firms embed automated verification into HR functions to meet stringent compliance standards, often helping win high-value contracts. Operational efficiency follows, with instant and accurate background checks reducing onboarding times, lowering costs, and positioning employers as trustworthy in competitive talent markets. In India, digital platforms now complete over 90% of cases in under five days, compared to weeks with traditional methods.
The identity economy demands speed, security, and compliance in equal measure. With fraud adapting to changing times, HR must take the lead and act as the architect of trust. HR can transform verification from a box-ticking exercise into a driver of strategic growth by leveraging AI for unbiased decisions and continuous checks. In the revolution for trust, HR is not just recruiting; it is laying the foundation for proven, robust organisations that can thrive in a digital world where trust is the ultimate currency.
