What can the past and present tell us about the future of digital identity?
Reading time: 10 minutes

What can the past and present tell us about the future of digital identity?

The way we use our identities has evolved rapidly over the last 100 years, meaning the ways identity is shared and verified has had to evolve in an attempt to keep pace, and the COVID - 19 pandemic has only further accelerated this evolution.

As a global community, we have gone from verifying individual physical documents on a case by case basis to a patchwork system which uses physical assets to enable digital trust. But, the patchwork nature of this system leads to identity acting as a barrier, rather than a benefit for everyone involved.

So where have we come from and where are we going? Let’s take a look:

How identity has traditionally functioned

Traditionally, the identification process has been slow, but trustworthy - provided you were able to prove your identity in person. It relied on centralised government documents - passports, driving licenses and national ID cards to act as the guardians of trust - you trusted these as much as you did the individual in front of you. 

When the process worked - it worked flawlessly, creating trust and certainty in a moment. We still have these moments - when you get your passport out to enter a new country, it’s quick and easy to pass through passport control.

But, when proof of identity had to be provided remotely, the process became slow and arduous. People had to put their documents in the post and place their faith in delivery systems. Meanwhile, the person receiving them had to trust that they had been sent the actual documents of the individual claiming to own them.

How our system works today

Physical documents are still considered the authority on trust - forming the bedrock of a hybrid system which attempts to span the physical and virtual world.

What do we mean by this? Well, the trust inherent in these documents is still the central basis for verifying identity for digital services. But because these documents only exist in the real world, businesses are still reliant on digital copies being sent by email or post to help verify a user’s identity.

This is a problem on two fronts - firstly it raises legitimate questions from consumers around data privacy - why should I share my most personal information through the post? Or provide scans which can be kept on file for a seemingly indefinite period of time. 

Secondly - the repetitive nature of this process frustrates everyone. Consumers repeatedly have to prove who they are - even to businesses they have a history with. It’s time-consuming and leads people to give up on transactions. The process of monitoring and repeatedly verifying consumers is costly and arduous for businesses - creating unnecessary friction and acting as a brake on growth.

Right now, data is still a large part of the process of verifying someone online.

Knowledge based authentication is still used for situations such as credit checks, where customers are asked confidential questions about their recent transactions in order to verify their identity. In principle this information is private to the customer, but an abundance of such data is available on the dark-web, which fraudsters have unlimited access to. 

Aggregated data can also be used to confirm identity online by using data from multiple sites to verify that a person is who they claim to be, particularly in cases where services are age restricted.

What could the future of identity look like?

A fresh approach to identity is overdue. One with a simple guiding principle - making the world simpler, safer and more secure.

What does this approach look like? Well fundamentally, it’s built on the principle that once trust in an identity is established that identity should be reusable - allowing for trust to be transferred between businesses and build up over time.

Adopting this approach benefits everyone. Consumer frustration is reduced - they can carry their identity with them across digital ecosystems, rather than having to start from scratch with every new transaction. Businesses enjoy those same benefits and so much more - a reusable approach to identity allows them to hit the accelerator with confidence - boosted by a speedier onboarding process and a sharing of the burden when it comes to combatting fraud.

And these benefits don’t exist in isolation either - they also help build trust between the customer and the business. And by making that trust transferable, it means that building trust doesn’t start from zero every single time - driving growth, improving customer satisfaction and creating a more inclusive digital economy for everyone.

Download our free report.

Learn more about the state of digital identity and what’s happening next.