With many firms operating under age restriction regulations, the need for KYC and related checks is becoming ever more important, and compliance failings can have a "catastropic" impact on business, the study said.

Global spending on know your customer/business (KYC/KYB) systems from non-financial businesses such as those selling age-restricted goods will rise 140 per cent over the next five years from $9.2 billion today, a study finds.

The prediction came from Juniper Research, a firm tracking the fintech and payments market.

Growth in KYC/KYB tasks will be largely driven by regulators enforcing strict requirements to protect underage consumers across a range of sectors such as medicines, gaming and adult entertainment. 

To describe what’s at stake, Juniper Research said that in the US, the Texas House Bill 1181 for example, enforces civil penalties of up to $10,000 per day for violations of its age verification requirements. 

“Failure to comply with these regulations by not providing sufficient age-verifications tools will have catastrophic consequences for enterprises,” the report said. 

“As businesses increasingly need to verify age, they must partner with KYC/KYB systems vendors that can automate age verification, while ensuring compliance by not storing customer data. As these platforms are not used to being regulated in this way, picking the right system is critical to success,” Daniel Bedford, who wrote the report, said. 

The report said that to comply with new rules without creating onerous manual work, non-financial businesses should adopt systems that use capabilities such as optical character recognition. OCR quickly extracts data from passports or driving licences; streamlining customer onboarding, ensuring secure transactions and helping enterprises maintain regulatory compliance.