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Protecting digital identity on the agenda, if not in the budget

Governments to dating apps
Protecting digital identity on the agenda, if not in the budget

It is clear to most stakeholders that digital identity is an important tool for addressing society’s current needs, though one possible opportunity for major investment in the area has been missed.

The major infrastructure spending bill just passed by the United States Government may contain funds for smart city sensors including biometrics, but it does not include any funds specifically earmarked for digital ID, FCW reports.

Digital ID has been identified as a priority by some in the U.S. government, but a $500 million fund for the Department of Labor to use disbursing NIST-compliant digital identity verification tools to states contained in a draft did not make the final version of the infrastructure bill. The draft also included a plan for the Office of Management and Budget to come up with a plan for federal digital ID verification and to explore a possible government-wide digital ID system.

Better Identity Coalition welcomed the provisions, but wants more work done to allow private companies to verify the identity of their customers remotely.

Biometrics needed for authentication

Making credentials useful across a variety of online applications will require authentication, Jumio CEO Robert Prigge tells PYMNTS in an interview.

Prigge suggests that consumers are becoming more aware of the security protections of ID document and selfie biometric checks, and therefore more willing to use them.

From online alcohol purchases, for which the customer’s age must be confirmed, to the COVID status credentials which are being increasingly mandated, using biometrics as part of the initial identity verification process establishes a baseline of trust that can be referred to for authentication once onboarding is completed in a way that database checks alone cannot.

Prigge also notes the interoperability challenge in the U.S. caused by a patchwork of standards and regulations.

Many businesses are already convinced of the value of both digital identity innovation and authentication, with a survey from PYMNTS and Equifax showing 38 percent of auto dealers, financial institutions and alternative lenders seeing the former as more important than a year ago. Innovation in digital identity authentication is “very” or “extremely” important to 43 percent of financial institutions, according to ‘The Next Wave: Business Adoption of Digital Identity Protection’ report.

SSI to repair trust?

The way to innovate to address privacy concerns around digital identity is to return control of identity data to users in the form of self-sovereign identity (SSI), rather than centralized or federated ID, according to World Economic Forum Project Fellow with the Centre for the Fourth Industrial Revolution Satoru Hori.

Hori notes McKinsey’s estimate that digital ID could “unlock” the equivalent of a three percent increase in GDP in developed national economies, and a 2019 survey showing widespread concern among Americans about how companies and governments will use the data they collect. By providing digital identity information digital signed by a trusted third party, as well as the user, SSI gives users control over their own data and removes their reliance on a central administrator.

Examples of this principal in action are Kiva’s program for building credit history in Sierra Leone, and the Linux Foundation’s COVID Credentials Initiative (CCI).

Achieving the full value of SSI will require both effective digital wallets for managing keys, and a common governance framework.

Social media and dating apps next?

Social media sites are among the leaders in federated technology, but also have their own issues with user trust.

Twitter’s head of Service Technology and Scaled Operations Sudan Sethuramalingam tells PYMNTS in an interview that many users are uncomfortable with sharing digital ID data on a social network. The company will attempt to frame identity verification as a benefit rather than a friction point, and bear customer security preferences in mind as it attempts to win broader trust.

With preferences around authentication methods shifting away from usernames and passwords, new methods including biometrics are likely to be added and more widely used over time, Sethuramalingam says. The lack of official identity documents among million of people around the world will require some flexibility.

Tinder is moving to make digital ID verification available to its users, Mashable reports, based on an upload of an ID document photo.

The step seems to be the first among dating apps, Mashable writes, but will be voluntary in places where it is not already required by law, like Japan. Tinder already uses biometrics for photo verification to prevent catfishing and other misrepresentation risks.

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