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UK relying parties unclear on value of digital IDs

OIX and Daon report shows sobering disconnect
UK relying parties unclear on value of digital IDs
 

Relying party organizations in the UK are uncertain of how to leverage the value of digital IDs according to Relying Party Views on Adoption Readiness by Open Identity Exchange (OIX) and digital identity trust company Daon. The research took place during May to October in 2023 and included 14 respondents from 8 sectors and various use cases.

The research showed that technical language adds confusion and makes respondents associate digital IDs with complexity. All participants in the study described digital Identities differently, with findings showing that the more technical and nuanced language used, the greater risk that key participants will be disconnected.

Organizations instead want to see applications of digital IDs that highlight the value of use cases and the impact on end user experience. In the gambling industry, speed and compliance are key priorities. “Our primary goal is to identify users fast. In a lot of jurisdictions, the customer can’t transact with us until we verify that individual,” said a respondent in the gaming sector.

Some respondents wish there was a national digital ID system in the UK that could standardize reusable identities.

“From a strategic, business, and technical perspective, we are in favor of digital identity,” said a respondent in regards to onboarding for non-banking financial services. Digital identity shows promise in simplifying KYC checks. The lack of a national digital ID system in the UK is “potentially a hindrance. A well-organized, well-run, and potentially well-recognized scheme would really help.”

Those in regulated sectors wanted to know that regulators were comfortable with digital IDs being implemented in their risk frameworks.

If a company relies on a digital identity provider in the absence of a system for approval by a government or other body, “then that carries a high risk of inaccuracy and that is not necessarily an advantage for the business,” said a respondent in regards to risk assessment for home rentals.

Value explanations, the use of plain language, demonstrating use cases, and demonstrating risk framework compliance are critical in building confidence in digital IDs, OIX and Daon found.

“Our research shows clearly that storytelling, cross sector cooperation and regulatory approval is critical,” says Geraint Rogers, who works in customer success for market SME identity and risk for Daon, in an announcement. “We must highlight the clear value of digital identity over incumbent solutions. We must also focus on user and business outcomes and less on the technology itself.”

Rogers led a panel exploring the diverse ways in which digital ID is used by relying parties at OIX’ Identity Trust 2023.

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