Is It A Myth That Digital ID and Privacy Conflict?
Digital ID has patiently waited in the wings for over two decades. Although discreetly advancing amongst the hubbub of headline-grabbing innovations, digital ID has never quite managed a big-bang moment of its own.
Other society-defining technological innovations are marked by a clear “before and after”. Meanwhile, in some factions, decades-old debates about digital ID labour on while advocates steel themselves for a likely uphill battle.
At the heart is supposed privacy infraction – a myth that blockades progress and risks financial service providers falling out of step with customers.
In this commentary we precisely unravel digital ID misinformation and explain how FSP’s can carefully accelerate adoption.
- Is the digital ID privacy debate old news?
- What are the latest digital ID demand statistics?
- Is digital ID about the become the norm?
- Why digital ID is a safer alternative to physical ID
- How can digital ID adoption be meaningfully accelerated?
Is the digital ID privacy debate old news?
In many EU nations, digital ID is now a default, with participating businesses saving millions through streamlining customer journeys and boosting financial inclusion.
Yet a narrative persists that here in the UK, financial services customers are not quite ready for digital ID.
The hesitancy hails back to the Tony Blair Institute calling for a National Digital ID –which triggered a very public reaction and a not insignificant degree of paranoia. A similar narrative emerged around the Department for Science, Innovation and Technology’s recent digital ID consultancy.
But is this really the truth that consumers are resistant to digital ID?
Because the numbers tell us that public aren’t just ready for digital ID, they’re driving it.
What are the latest digital ID demand statistics?
New figures from Juniper Research – the expert fintech researchers – tell a story of growing appetite for digital ID.
- Digital identity verification checks will surpass 70 billion in 2024.
- Digital identity verification checks will grow 16% from 2023.
- Banking will see 37 billion digital identity verification checks alone in 2024.
- Banking digital identity verification will equate to 53% of the entire global ID verification market.
- Lloyds Banking Group Digital ID Connect garnered 4 million downloads in a matter of weeks.
Is digital ID about to become the norm?
If the numbers are any evidence, the needle is moving on digital ID interest and investment. Could it be that we’re on a precipice?
Perhaps so. After all, AI caught markets off-guard in the form of ChatGPT and its staggering popularity – 100 million users in a matter of months.
Therefore, relying parties – especially banks with whom digital ID is gaining rapid traction – should act now.
However, FSP’s must soothe deep-rooted anxieties and assure consumers that digital ID is a force for good. Part of this is openly discussing digital ID: why it is not a privacy conflict, and what is being done to keep it secure.
Why digital ID is a safer alternative to physical ID.
Leveraging digital IDs can give FSP’s major fiscal and reputational advantages. And, in equally positive news, digital IDs can be a safer and more private means of verification.
But first, some important context:
- Identities are currently verified through a process of “triangulation”.
- Here, identity evidence – usually documents or data – from numerous sources must be compared to infer an identity.
- The more evidence, the more likely an identity is legitimate and the harder it becomes for fraud to occur.
- Therefore, by its very nature, user data is stored many times, by many organisations.
However, digital ID intends to put a user in control. They choose when data shared, rather than decisions being made on their behalf. For example, departments sharing entire documents rather than the specifics required, or data moving between partner organisations. To this end, once an ID is created, the process of constant triangulation is lessened, which should improve privacy and data security.
How can digital ID adoption be meaningfully accelerated?
For their significant benefits, digital ID’s raise valid concerns about data privacy and protection.
Acknowledging these concerns – and choosing solutions that explicitly mitigate them – can help FSP’s win over nervous customers and accelerate uptake amongst the enthusiastic.
Digital ID providers know this, too. As such, several are exploring how sharing fraud signals between relying parties can mitigate digital ID-adjacent frauds. One powerful use case here is preventing account takeover as a consequence of single sign on for fraud – an area of interest in our Project Shield Proof of Concept.
Digital ID is a strategic spotlight for FSP’s.
Although twenty years in the making, it appears that the stage is now set for swift, mainstream digital ID adoption.
Doors will open for more customers and as a result, FSP’s must accelerate their offering and do so in a manner that is fair, compliant, and resistant to fraud.
A Synectics Solutions consultant can speak to you about tested, workable, GPG45-compliant digital ID verification infrastructures. Click here to arrange a call.