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A confusing present obscures the future of digital IDs

A confusing present obscures the future of digital IDs

The difficulty in predicting the future of digital identities is that defining the present of digital identities is as hard or harder.

A new report by financial information publisher Finextra promises the future of the sector within the financial industries: “inclusive, secure, fit for purpose.” But the report also makes it clear that the globe is studded with levels of ambition from indifference (most of the developing world) to focused (India, Estonia and Finland).

And, of course, that is just adherence to the social, economic and political concept of digital IDs. Interoperability through standards and real international connections is a sore subject.

Finextra’s writers spoke to knowledgeable sources in international organizations including Citi, HSBC, the United Nations, KPMG and the London School of School of Economics.

Adoption rates are not surprising until they are. Estonia’s eID is held by 99 percent of its citizens, and 87 percent of Finns hold that nation’s Tupas. India’s Aadhaar program has reached 91 percent of citizens.

The United States’ Login.gov program, on the other hand, can only hope to reach five percent adoption in the near future. Likewise, Australia’s eID program is working to get five to 10 percent adoption.

Given the weight that eIDs are afforded in European Union public debate, it is notable that Finextra see only four “mature” digital ID programs in all of the EU. More than 40 percent adoption, in the publication’s estimation, is mature.

More unexpected is that China’s multiple private and public digital IDs have together reached no more than 75 percent of citizens. In the rest of the world, that is a respectable number, but it is not in the authoritarian society that normalized the Orwellian concept of “social credit” in just a few years.

Progress with digital ID wallets is no more encouraging. “Truly successful schemes do not yet exist,” according to Edgar Whitley, associate professor of information systems at the London School of Economics. Whitley was interviewed for the report.

Questions about data sovereignty and interoperability are still peripheral to the eID movement, which hinders development. Some would argue that interoperability alone should have been a top topic for years now.

Should the government control data sovereignty or, for example, financial institutions because they already must comply with Know Your Customer regulations.

Trust in government is soft in many nations, not the least of which is the United States, but, says Whitley, banks are not anxious to take on another non-core task at the behest of government.

“The arguments for and against (banks stepping in) ebb and flow over time,” he says, another example of how sketching the future of digital identity has to be done in pencil or maybe, even, dry-erase marker on a very big white board.

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