What is a Digital ID and where is it used?

A digital identity, as the name suggests, is proof of who you are online. It is a digital representation of your identity information, along with other attributes about yourself, that can help to prove who you are online. Using your digital identity, you can then access digital services securely.   It is, however, important to understand the difference between a digital ID and a trusted digital identity.   It is possible for anyone to create an identity for themselves online. Simply sign up for a Facebook, Instagram, or even a Gmail account using an alias, fake date of birth and fake location and you have created an online identity. This is an example of a digital identity than cannot be trusted and cannot be used to sign up for key services like those provided by the government including passports, tax file numbers (TFNs) and other such services.   As reported by NEC, “a trusted digital identity is created when the information you provide has to be verified or checked for authenticity.”   This is to say that in order to obtain a trusted digital ID, there are a set of verified attributes that will need to be provided including things like identity documents or biometric identifiers such as a fingerprint or facial recognition scan.

Why do we need digital identities?

Digital IDs are helping to speed up both government and business interactions, improving the overall efficiency of those organisations that choose to adopt digital identities.   Trusted digital IDs are a great way to ensure your sensitive personal information is protected, whilst allowing you to use online services seamlessly. A digital ID allows individuals to quickly prove that they are who they say they are when signing up for services online such as banking, travel, and healthcare.   Digital identity also allows businesses and government agencies to develop and deliver new services that balance the need for convenience with security.   Banking is one sector that has embraced the opportunities presented by digital identity. In the past, high-value transactions would need to be carried out in a branch, with face to face contact necessary to prove that you are who you say you are.    Today, these same transactions can be carried out online, verifying your identity using your trusted digital ID. This is opening up new opportunities for banks to engage with customers and whilst one of the drawbacks of this has been the closure of branches throughout Australia and the rest of the world, many banks have deployed staff from branches into other customer service roles within the bank, helping to deliver a much better service to customers as well as attracting new customers.   Digital identity allows for fast, accurate, and contactless interactions, improving customer experiences and ensuring customer retention.

What are the opportunities created by digital identity?

According to a report by McKinsey & Company, “almost one billion people globally lack any form of legally recognized identification. An additional 3.4 billion who have some type of legally recognized identification have limited ability to use it in the digital world. The remaining 3.2 billion have a legally recognized identity and participate in the digital economy but may not be able to use that ID effectively and efficiently online.”   From e-passports to digital wallets, online banking to social media accounts, these new forms of digital ID allow us to travel, conduct business, access financial and health records, stay connected, and much more.   The creation of a digital identity can help solve a number of problems that exist throughout the world.    Identity fraud is one of the major issues that can be addressed using a digital ID and whilst concerns still exist around the security of digital ID platforms, technology is helping to play a role in ensuring secure digital ID solutions.   Leading digital identity providers are turning to technologies such as blockchain and biometrics to help to provide secure platforms that are paving the way for every individual to have a legal identity. The ID2020 alliance is an initiative that aims to provide a legal identity for all by 2030.   ID2020 is an alliance of businesses, nonprofits, governments, and individuals…working in collaboration to ensure that the future of digital identity is, indeed, good ID. Good ID is another term used to describe trusted ID.

Which sectors are using digital identity?

As well as sectors like banking and government agencies adopting digital identities, there are a number of other sectors that have had to embrace digital IDs in order to deliver a secure experience online.   The gaming sector is one such industry, especially those that allow gambling on site. Leading online casinos such as Betway incorporate digital ID into their registration process to prove that a user is who they say they are. Other gaming sites have also adopted digital IDs as a way of protecting other gamers on their site.   A form of digital identity is also required when signing up for payment programmes like Zip or Afterpay, ensuring you are who you say you are and stopping people from creating false accounts and running up debt.   Whilst these examples of digital identity are not using the same programme as national governments, there is a growing shift towards private sector organisations utilising the national digital ID systems set up by governments around the world.   According to the Global Government Forum, “Systems that integrate with the private sector also benefit citizens by ensuring simpler access to a range of services. Once banks in India used Aadhaar, for example, citizens could open accounts in minutes, rather than days or weeks, according to Bellot, because it was easier to prove their identity.”   In the future, we can expect digital IDs to be an essential part of our day to day lives, used to access a wide range of services from both governments and private organisations.