15 Nov 2023
by Gus Tomlinson

Why understanding digital identity data diversity matters for financial inclusion

Guest blog from Gus Tomlinson, Chief Product Officer, Identity and Fraud at GBG Plc.

Why understanding digital identity data diversity matters for financial inclusion

In a digital world, citizens and consumers increasingly rely on the internet for access to public and commercial services. This is particularly prevalent in the financial services industry, where we have witnessed a huge shift in the way consumers now expect to interact with their banks and other financial organisations.

Many consumers are placing trust in new payments technology. According to Barclays, the total value of all contactless payments in the UK jumped nearly 50% in 2022, as consumers embraced the higher £100 transaction limit, and, in the last year, over 90% of all eligible card transactions were made using contactless payments.

As well as this, thanks to innovation pioneered by challenger banks – banks which operate exclusively through digital channels – there has been a huge increase in the adoption of online and mobile banking as the primary way of interacting with a bank. Traditional banks are also taking action as a result of the decline in the use of physical branches. According to Which? banks and building societies in the UK have closed 5,668 branches since January 2015, which is more than half of the branches that were open at the start of 2015.

In this current landscape, access to necessary financial services is now more than ever secured digitally and digital identity verification is key to building trust for everyone during this process. For financial service providers it provides the confidence they are onboarding a trustworthy identity and for individuals, it provides them participation in an online economy.

However, a key challenge the industry currently faces is that verified identity data is not equitable and without the right knowledge of identity data diversity and how to apply it, businesses can unfairly prevent people from accessing goods and services, including key financial services.

Understanding digital identity diversity is key to increasing financial inclusion

The availability of identity data varies from country to country. While some countries have rich and reliable data sources, others have poor digital identity ecosystems, which makes it easy to verify genuine customers in some places and harder in others.

For example, in France, credit reference data is not available for the identity verification of French citizens; in Saudi Arabia, as birthdays are not commonly celebrated, many citizens enter 01/01/YYYY on forms, making date of birth matching difficult; and in the US, the Social Security Number is a helpful identifier, but businesses must also understand the high risk of synthetic identity fraud. These are just a few examples of the many nuances within digital identity ecosystems that need to be considered.

Moving beyond binary pass-fail checks

The risk is, if this identity data diversity is not properly understood, then businesses can negatively discriminate against and unfairly prevent people from accessing digital services. When this comes to financial industry, this could result in genuine customer unable to gain access to critical services such as credit access, opening a new bank account, or securing a mortgage.

To avoid exclusion, businesses need to move beyond binary pass-fail compliance checks and embrace a nuanced country-by-country approach to digital identity verification. After all, data doesn't fit into a one-size-fits-all category. While regulatory compliance is necessary, it’s not enough - a more precise measure of an individual's digital identity with rich granularity allows for better onboarding decisions and business outcomes.

Ultimately, to increase inclusion, where identity data quality differs, access must still be provided by building trust in different ways. So, while leveraging credit reference data isn’t an option in France, mobile operator data can be used as an alternative data source to perform good identity verification in the region. We are starting to see this use of this approach increase, but more must still be done.

Building a more inclusive identity industry with alternative data

With such variation in digital identity ecosystems, it’s understandable that designing the optimal user journey, backed by diverse pools of verified data, is challenging for all service providers, public and commercial, worldwide. That’s why we’ve created the International Identity Index, leveraging confidence scoring, to provide insight on the best way to verify identity around the world, on a country-by-country basis. Our aim with the Index is to help address disparity in digital identity ecosystems and build a more inclusive identity industry.  

As more of our lives are facilitated by the digital world, financial services providers need to accurately understand where identity data quality differs and leverage the power of alternative identity data to invest, build trust, and to increase financial inclusion around the world.


Gus Tomlinson

Gus Tomlinson

Chief Product Officer, Identity and Fraud, GBG plc

Gus Tomlinson helps companies onboard customers safely, fight fraud and stay compliant. As Chief Product Officer, Identity and Fraud, for GBG, Gus drives the product and data portfolio of identity and fraud solutions, ensuring that products are aligned to customer demand.

Throughout her career, Gus has used each role to increase her understanding and awareness of customer and consumer issues to deliver insightful commentary on current affairs, from biometrics and fraud prevention to digital identity schemes and regulatory issues. Working across strategic, commercial and data roles, Gus uses her deep knowledge to help businesses keep up to date with the rapidly evolving digital world of identity and fraud.


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