Place of birth. Occupation. City of residence. Revenue. Goods. The above are some of the data we need at different stages of life, such as when we travel, change jobs, buy items or services or ask for a loan, which allows us to prove if our identity is true.
Currently, most of our credentials and documents are stored in wallets, purses, or physical items. However, since 2020, the use of technologies has been driven to helptransform the management of identity documents online and remotely to position digital trends that allow authenticating that a person is who they say they are. This is the case with biometric authentication that uses unique physical characteristics such as the iris of the eye, fingerprints, face and/or voice.
In Latin America there is no homogeneity of documents and the digital identification process advances unevenly in different countries. In some nations of the region, the digital identity card or DNId (national identity document) has been implemented, which allows its use in digital services, this is the case of Colombia, Ecuador, Mexico, Bolivia, Peru, Argentina, Brazil, Uruguay and Paraguay.
Who do people trust when using digital identity services? According to iProov’s Digital Identity Services study,49% of global consumers would trust their bank if they offered a digital identity service, while 26% would trust Google and 23% its government (data that varies by country).
Because people depend on their bank, credit union and/or financial business to safeguard their money, this level of trust naturally extends to the components of digital identity. This represents an opportunity to create a service system that is simple and secure, such as the providers of the IDaaS (identity as a service) model.
Digital identity in financial services
Digital identity document technology has the potential to drive the transformation of online payment ecosystems, as long as companies implement solutions that allow users to control their credentials. Next, let’s look at the five fundamental pillars that allow building such ecosystems, according to the Deloitte report, Picture perfect: A blueprint for digital identity.
Social good: the system must be available to all users interested in participating, in addition to serving their interests. Financial institutions and businesses can influence this inclusion and help drive adoption of the system.
Improved privacy: User information is exposed only to the right entities in the right circumstances. Today’s identity systems are more exposed to vulnerabilities, such as privacy breaches, data leakage, and overexposure. A digital identity system must ensure that only the parties involved access the data they need, for the required purposes. Must be cyber-resilient and meet data protection and storage standards
User-centric: It is essential to give users control over the storage and transfer of their personal information in the identity system. Under the premise of trust, financial institutions will need the user’s consent before accessing or sharing identity information; The user determines who owns their information and accesses it.
Viable and sustainable: In digital identity systems, such as long-term businesses, stakeholders need to know that their investment will pay off. Companies have a key role to play in shaping operational requirements and standards.
Open and flexible: build systems on top of open technology and data standards. Design them to integrate new parts and meet the changing needs of users.
Benefits for financial institutions and businesses
A properly developed digital identity system brings the following advantages.
Offers: Companies can use detailed and reliable customer information to provide personalized services and products to customers.
Operations: The transfer and management of digital credentials allows institutions to streamline and automate many processes, eliminating human error.
Security: Secure, digital storage of user information reduces fraud, such as information theft or compromised authentication.
Compliance: compliance becomes easier and more accurate thanks to the management of digital attributes and greater access to the identity of users.
Revenue: Companies have the opportunity to increase revenue from improved products and services. Even the implementation of a new identity-as-a-service/identity-as-a-service model.
Competitiveness: Financial solutions institutions offer an optimized user experience and position themselves as a critical part of the digital economy.
In a digital credential ecosystem, wallets and apps must be able to securely connect and exchange digital credentials. Organizations need to build and/or invest in digital credentialing platforms that offer the right data and information protection aspects.
Digital credential platforms must be interoperable and can be quickly deployed using cloud-based subscription models and open APIs, eliminating the need to invest exorbitant sums at the starting point. What a digital identity document platform can do, and how it can interact with other platforms, will be defined by the respective needs of the financial business.
Digital identity is an aspect increasingly immersed in the daily activities we carry out. Its development and evolution are transforming how we access different online services. The management of personal data, administration of expenses and payments, together with the identification in applications. are keys to digital identity, without forgetting authentication methods such as biometrics; These points are driving us to live in a 100% digital world in the future.
References
Digital Identity Services: What consumers want and how governments, banks and other enterprises can deliver. https://www.iproov.com/wp-content/uploads/2022/09/iProov-SIs-Digital-Identity-Report.pdf
Picture perfect A blueprint for digital identity. https://www2.deloitte.com/content/dam/Deloitte/jp/Documents/financial-services/jp-fs-digital-identity-online.pdf