ID Verification - KYC

The Exciting (and Perilous) Future of Digital Identity

Jason Howard

January 20, 2023
What's next for the digital identity industry
Table of Content

The world stands at an inflection point as technologies such as AI, augmented reality and the metaverse are changing the notion of how we manage identity in a digital realm. The old ways of authenticating ourselves in a digital environment are rapidly becoming outdated; but what will replace them?

As part of Caf’s ongoing “Great Identity Debate” web series, we discussed this topic in-depth, and i was delighted to take part in a panel also featuring Lizzie Clitheroe, SVP, Marketing for, Mark Nelsen, SVP Open Banking for Visa and Emma Lindley, Caf’s Managing Director of International Expansion. Here are the top takeaways from their discussion: “The Exciting (and Perilous) Future of Digital Identity.” 

The Evolution of Identity

The notion and concept of digital identity has changed much in the last decade. Ten years ago, many consumers were still very wary of biometrics, for example, whereas now it is much more commonly adopted. Digital onboarding, with the use of OCR technology to extract and verify data from images of passports or driver’s licenses, has enabled the seamless opening of digital accounts in mere minutes. Many people travel through airports using only digital verification. 

As digital identity continues to evolve, the important thing to keep in mind is the customer experience. A new way of proving identity may be less costly, or feature innovative new technology, but unless it provides value and incentivizes consumers to adopt it, it likely will not be successful. 

The Role of Private Enterprise and Government

The panel also discussed the role of government regulations and private industry when it comes to creating innovations in digital identity.  This is partially determined by regional differences; in Europe regulation tends to lead to the creation of new services. Whether it comes to data privacy laws like the GDPR, or EU’s digital ID scheme, innovation tends to be borne out of government edict. In the U.S., state and federal governments tend to take a “wait and see” approach whereas private industry leads the charge on innovation. 

However, as we move forward the truly global identity solutions will require interoperability and thus, cooperation between the public and private sector. This is especially true when creating an identity infrastructure that is decentralized with reusable credentials. Different organizations and platforms will need to share information about identity, without sharing or exposing data. 

Identity and New Product Innovation

How the evolution of digital identity helps to power new product innovation was another topic tackled by the panel. One example of this is the “Just Walk Out” technology developed and implemented by Whole Foods, an Amazon subsidiary, wherein a customer who has registered their biometric data with the company can simply walk out of the store with items without interacting with a point of sale terminal by paying using palm recognition technology. 

In the near future, biometrics or other technology could be used to make the airport travel experience even more digital and seamless. Digital identity methods could also be involved in voting. The key in any new identity product or service is ensuring a smooth customer experience while also having the proper protocols in place to mitigate fraud and cybercrime. 

A New Identity Infrastructure

The question arose as to how to build a new identity infrastructure to underpin these evolutions in digital identity. The panelists agreed that it is unlikely there will be one global infrastructure, so the key is getting different platforms to work with one another. Interoperability, user experience and security will be the key. 

This is just a brief overview of what was discussed, please be sure to watch the panel in its entirety, as well as register for the rest of the Great Identity Debate, by following the link here. 

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"The Exciting (and Perilous) Future of Digital Identity"