As we continue to transition into a digital world, it is becoming increasingly important to understand the various ways in which digital solutions are being implemented into our society. Join us at Identity Review as we explore the latest technologies, applications, and trends in digital identity!

Digital identity has established itself today as one of the most significant technological trends in our society. With growing uses in both the public and private sectors, it stands to become the foundation of our increasingly tech-based and data-driven society. Like many other digital innovations, the COVID-19 pandemic has been a catalyst for the digital identity industry, with the emergence of vaccine passports and widespread access to online services fueling adoption. At the same time, increased scrutiny over consumer data privacy has raised new questions regarding the ethics of digital identity and other data practices.

With so many moving parts, it’s important to understand the role digital identity plays and will play in our society as we move forward. So what are the use cases? Identity Review has taken a deeper dive into exploring the future research, implications and industry trends driving the digital economy.

The Financial Services Industry

Over one billion people today lack access to basic banking services because they are unable to prove their own identity.

Digital identity is an ideal solution to the long-standing issue of financial exclusion, but verification challenges, data breaches and increasing fraud rates have complicated the process. Nevertheless, numerous tech incumbents and startups have been working tirelessly to transform the use of digital identity in these services.

Digital identity can also help banks and other digital service organizations become better providers by improving customer experience, productivity and risk management. For example, digital identity enables streamlined authentication and KYC processes, allowing for a smoother and more efficient registration process. Furthermore, financial institutions can reduce theft and fraud through high-assurance identity verification enabled by digital identity. This is especially notable considering that synthetic identity fraud is one of the fastest-growing types of financial crimes worldwide.

Government Applications

Governments have also taken the front foot in implementing digital identity into everyday processes, procedures and civilian applications. For example, Singapore and Estonia have implemented national digital ID card systems that allow citizens to verify their identity and provide access to all national e-services. Singapore is aiming to take this one step further by experimenting with blockchain technology that will give users control over their own data.

Many governments have also turned to digital identity as a potential solution to opening up their countries. There has been increased conversation around the use of digital immunity credentials as a way to track vaccination, immunizations and infections.

In the United Kingdom, there has been a push toward permitting the use of biometric identification technology and data for criminal investigation and law enforcement. This would include handprints, irises, facial recognition data, and even voice biometrics. Despite this potential use case, however, a recent New York bill prohibiting biometric evidence from being the sole factor to place an individual in custody has once again called into question the ethics regarding digital identity solutions.

With the integration of digital identity into our daily lives, governments have evidently embraced this change to meet the fine balance between national health, security and ethical privacy.

Consumer Data Privacy and Ownership

A big part of the risk surrounding digital identity solutions concerns the ability of corporations and governments in protecting consumer data, respecting consumer privacy and providing consumers with data ownership. With the recent passing of data-focused legislation such as the CCPA and GDPR, as well as the growing awareness of consumer data privacy in digital communities across the world, governments and corporations are facing increasing pressure to provide transparency within both security and privacy.

Several tech startups, such as Bloom, have gone one step further by giving users control over their own data. With over a million downloads, Bloom is currently the largest digital identity system and stands as a paradigm for the next generation of tech startups. It also demonstrates that it is possible to implement a digital identity system in which anyone can build or control their own identity on a larger scale.

Blockchain Technology

Many tech incumbents and leading startups have also proposed that blockchain will become the ultimate solution for digital identity needs. By providing a decentralized, interconnected, and tamper-proof infrastructure, blockchain technology is set to revolutionize the way users manage data and identity. With the launch of Facebook’s own cryptocurrency, as well as the emergence of other blockchain-powered solutions such as IBM’s ID, other tech companies are likely to follow suit.

The Overall Impact Going Forward

Digital identity’s potential for impact is enormous, but it faces a complicated social and political landscape that can pose significant risks of its own. As a dual-use technology, digital identity can be used for undesirable purposes by bad actors, the same way we have seen the power of social media leveraged in unethical ways.

The future of digital identity depends heavily on whether such risks can be properly identified and mitigated. Regardless, the widespread implementation of these technologies are inevitable, and it remains crucial for society, policymakers and consumers to apply these solutions in a manner that upholds the rights to security and privacy.

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