Today’s world is marked by digitization and technological advances. Many services, whether by government agencies or the private sector, are now online. These developments have led to the growth of the digital identity market.
Many sectors will continue to adopt digital identity (digital ID) to serve as a way to prove identity for accessing services and other benefits. All online services related to education, banking, health, and the workplace must incorporate digital ID in their systems. It is a requisite for making transactions, creating accounts, and subscribing to the services. Therefore, it performs a crucial role in enabling people to conduct their work, saving time, and maintaining security.
Currently, three major digital systems are being utilized in the market. These are the centralized, self-sovereign, and third-party-based identity systems. They are still evolving, and they have their benefits and limitations. Yet, they are better suited for identity authentication than the traditional ways, such as using passports, government-issued IDs, and driver’s licenses. This article unpacks how to prove identity, the advantages, and the limitations associated with digital identity.
There are different ways to prove identity in the digital era. Some types of digital identity include database checks, identity verification, document verification, and biometric verification. Once a user verifies their identity, it unlocks access to digital services.
Individuals can identify themselves using different kinds of digital identity information. They can take or upload a picture of their official ID. They can also identify themselves using biometric scans such as voice, facial recognition, and fingerprints. Moreover, people can use personal identity information (PII) about themselves for verification against database checks.
Examples of Digital Identity
A digital ID is a representation of the real self of a person online. Like in the real human world, many unique digital identity identifiers exist. They include:
- Personal information like date of birth and name
- Passwords and username
- Email addresses
- Passport numbers
- Social Security numbers
- Online Search activities
The above identifiers and behaviors make it possible for businesses to determine who individuals are. They ascertain people are who they claim to be.
Benefits of Digital Identity
There are many moments in the digital age where one is required to prove their identity. The most common scenario of identity verification is when signing up for services and opening bank accounts. However, there are other areas where proof of identity applies. They include enrolling in universities, purchasing age-restricted items, and providing driving eligibility. More businesses are adopting digital identity, and the benefits are continuously increasing. Below are some of the benefits of digital identity:
- Increased security and fraud detection – Digital identity allows companies to improve their security through enhanced fraud detection. As technology continues to improve, digital verification has become more secure, and the use of digital identity has also become speedier. The automation of AI-powered digital identity verification has removed the need for manual verification, giving users a faster experience and freeing up internal teams.
- Improved access to online services – Another benefit of proving identity is improved access to online services. Accessing online services in the past required users to create an account and provide personal information, which would be time-consuming and inconvenient. Digital identity verification allows users to quickly and easily access online services with the assurance their personal information is safeguarded.
- Streamlined transactions – Proof of identity in the modern era also streamlines transactions. Traditionally, transactions required the exchange of physical documents and face-to-face transactions. In the digital era, transactions can be conducted efficiently and quickly with identity verification, eliminating needless paperwork and physical interactions.
Challenges of Proving Identity in the Digital Era
Very few players have accomplished large-scale transparent and secure authentication and identification processes. Today, the main issues of proving identity are:
- Regulation – Authorities must establish stable and precise rules on collecting, processing, and sharing personal data. There need to be regulations encouraging the use of digital ID with an obligation to check the user’s age for all e-commerce transactions. This will boost the adaptation of digital identity technology and create a well-developed ecosystem.
- Customer experience – Digitization has placed the customer at the core of the operations of businesses. As such, there is a need to provide them with a seamless experience. Digital players must pay attention to the customer’s journey and focus more on delivering customer-oriented solutions.
- Coverage and scale – Another major obstacle are persuading users to adopt digital identification solutions. Digital ID providers must have a large customer base across different customer segments to achieve a reliable and efficient system. Still, users tend to avoid systems that have not been proven, which inhibits the further development of services.
- Technical limitations – Some methods, such as facial recognition, can be unreliable and prone to error.
Proving identity in the digital era is vital for increased privacy, security, and access to online services. There are challenges, but new methods, such as blockchain technology and biometric identification, are emerging to address them and make digital verification more convenient and secure. As technology evolves, it is likely that improved and new methods of proving identity will emerge. It will be easier and more secure for organizations and individuals to transact securely in the digital age.