Liminal forecasts major regulatory impact on digital identity in 2022
Digital identity advisory firm Liminal has published a summary of their predictions for the sector in 2022, plus a self-assessed scorecard on how their 2021 predictions fared.
The predictions are separated into individual events or strands, plus a selection of solution segments the firm’s analysts will pay particular attention to over the coming year
Two of the predictions are for the impact of regulation on digital ID-related issues, and both come from Europe. Liminal believes that the European Union will set the standard for eID interoperability and the UK’s Age Appropriate Design Code (AADC), which brought in stricter requirements for online services when used by or likely to be used by children, could become “the new GDPR.”
In the EU, the prediction is that a finalized eIDAS 2.0 standard will be passed by the European Commission, placing the bloc at the “forefront of the global push for governments to offer their citizens electronically-native identity credentials.” Any pilot programs in 2022 could further promote the uptake of interoperable digital ID systems worldwide. The push for interoperability could throw up some privacy issues, as flagged by Mozilla.
After excluding itself from the EU as the bloc develops a truly interoperable identity scheme, the UK has at least caused a splash with the AADC, with platforms such as Instagram, YouTube and TikTok already making changes (albeit with denials of the child-centered regulation being the impetus). Liminal predicts a larger impact on businesses which have relied on users simply ticking a box to confirm age. How they will implement age-verification and manage privacy remains to be seen.
Two more predictions focus on brands in the sector. Liminal predicts companies in the background such as Jumio and Onfido will become increasingly noticed by consumers as they follow their pathways. Digital identity firms will also race for recognition to capture market share – the likes of Experian and ID.me. New companies will emerge so expect mergers and acquisitions.
Speaking of big brands, the team foresees issues for Apple in its quest to deploy its digital driver’s license platform to 50 U.S. states in 2022. It may have adopted an ISO standard on mobile driver’s license interoperability but “their demands for full control over mDL program rollout and marketing materials will not be an easy sell in statehouses across the nation.”
For the analysts’ look ahead to areas to watch, they expect a rush of new products, companies and technologies for financial identity and credit decisions, alongside traditional credit scoring. They expect progress for eIDs and identity networks as “public sector adoption and private sector investment equalize, which in turn can unlock the holy grail of digital identity – reusable identity credentials.”
A sector set to re-emerge is Identity Graphing and Resolution as companies develop privacy-preserving ways to build identity graphs for ad placement after the sector’s previous cookie binge.
2021 predictions scorecard
The analysts also review 2021 while grading themselves on last year’s predictions, scoring between As and Cs. “If 2020 was the year that accelerated digital transformation and pushed digital identity into the mainstream, then the impact of COVID-19 in 2021 was kerosene on an already well-lit fire,” according to the team.
They gave themselves an A for predicting a buying spree on the part of incumbent fraud prevention platforms in a shift towards digital identity solutions. They list Equifax’s acquisition of Kount, TransUnion’s acquisition of Neustar as well as the funding rounds for Socure and Forter.
Liminal’s analysts’ takes on age-verification in 2021 got them a B+ for getting some of it right as the topic gained a great deal of momentum (AADC and tech firms’ response) but they feel they were too early and 2022 will be the year. A similar story for the adoption of digital identity wallets.
Where their self-awarded prediction grades slip was for being too optimistic about digital identity benefitting from a “Biden Bump” – and they still hold out that developments such as Personal Identity Ecosystems are on their way – and that the passwordless revolution was nigh. Again there was a great deal of activity in the sector and attitudes are changing, but habits are hard to change. This is not a prediction they have pushed into 2022.
Age Appropriate Design Code (AADC) | age verification | biometrics | digital ID | digital identity | digital wallets | eID | eIDAS | interoperability | Liminal | mDL | Personal Identity Ecosystems | privacy | standards