Enter the realm of the digital world has taken its role in everyday life, Digital Identity, or digital persona, has become increasingly significant. It serves as a means to identify individuals based on sufficient data. However, if this information falls into the wrong hands, it can have severe impacts on individuals.
Platforms are now placing greater emphasis on the security of Digital Identity to prevent harm to users. Yet, this comes with trade-offs, such as cumbersome identity verification processes or lengthy account recovery procedures.
This challenge presents a business opportunity for Sumsub, a provider of identity verification systems through a centralized platform. In a conversation with Penny Chai, Deputy Head of Business Development (APAC) at Sumsub, Blognone sheds light on the narrative of Digital Identity and Sumsub’s business model.
Moving from physical identity to the digital realm, Penny Chai points out that in the past, identity was closely tied to physical reality. However, with the digital age, identities have expanded into digital footprints created through various online activities. As a result, having a secure and verifiable Digital Identity in the digital world has become essential, much like how humans naturally acquire physical identities as they grow up.
An efficient Digital Identity must have the ability to establish the identity of individuals in the digital space, similar to physical documents. As the importance of Digital Identity increases, laws protecting personal data are enforced, preventing platforms from accessing Digital Identity without consent – akin to misuse of personal identification when registering for rewards without complete transparency on data usage.
“Merely a name and email address are no longer sufficient for authenticating identities in a digital world filled with fraud and impersonation. We’ve seen numerous online scams causing significant harm. A robust Digital Identity is the foundation for secure online transactions, be it banking, financial services, or insurance purchases. Fundamental information such as names, surnames, or even travel locations has become crucial data that requires precise verification.”
Digital Transformation acts as a catalyst, pushing Digital Identity into the spotlight. Living in the current digital age necessitates a digital presence for communication, transactions, and accessing various services. The COVID-19 pandemic has further emphasized the necessity for online identity verification when physical interactions are limited, driving economic and social activities into the digital realm.
“While initial online identity verification may have been simplistic with just usernames and passwords, we’ve come to understand that such data can be easily predicted or stolen. Identity theft has become widespread, leading to the development of more robust and continuous verification processes. This underscores the effort to create a reliable and secure Digital Identity, a commitment that Sumsub is dedicated to.”
While accessing financial services is a clear benefit of Digital Identity, Penny Chai believes its scope is much broader. Digital Identity is a crucial foundation for accessing citizens’ basic rights, subject to user data control. Shared data must be within the framework of consent and transparency to instill trust in service providers like Sumsub.
Noteworthy examples of Digital Identity usage include countries implementing their own systems such as India’s Aadhaar database, Australia’s BBS system, Singapore’s MyInfo, and Brazil’s CPF. These nations understand the importance of a reliable centralized database for Digital Identity, highlighted by the ThaiID and NDID initiatives in Thailand.
For digital Know Your Customer (e-KYC) processes familiar to many, like presenting an ID card and taking a selfie for identity confirmation, these are just the starting points. Advanced technologies can now detect user liveliness and compare facial features to prevent impersonation, with Sumsub collaborating with governments to authenticate identities and validate data.
“By enabling previously excluded individuals to access financial services, opening accounts, transferring funds, or even borrowing money, we drive economic growth and create new opportunities for those without prior identities. However, existing identity verification processes are often complex, time-consuming, and bring adverse outcomes to platforms needing to serve customers.”
Striking a balance between security and convenience is crucial, especially in online shopping where platforms require extensive personal information and photo verification for identity confirmation. Simplifying or strengthening verification processes to provide users a positive experience must be carefully considered.
“The concept of ‘Reusable ID’ represents a significant step in Digital Identity evolution. Instead of repeatedly verifying identities for different services, a secure and trustworthy Reusable ID system allows users to smoothly access various services using validated identity components. This reduces redundancy, saves time, and Sumsub is actively developing solutions in this area to streamline identity verification across sectors and borders.”
Ensuring data verified is securely encrypted and stored in compliance with GDPR standards and relevant laws is paramount for user privacy and security. Sumsub prioritizes data security and regulatory compliance as a central player, guaranteeing user data protection to over 1 million Reusable ID system users and expecting continuous growth.
According to Sumsub’s Fraud Report 2024, global identity fraud rates are expected to double from 2021 to 2024, with ‘Democratization of Fraud’ being a key trend. This implies that fraudsters can cause significant financial harm using minimal resources and half of companies (45%) and users (44%) have reported falling victim to identity fraud.
The most counterfeited documents include national ID cards and driver’s licenses, with Iceland having the highest forgery rates. Argentina sees the highest growth in fraud activities, while Oman tops the list for being affiliated with fraud networks. South Korea faces the highest growth in Deepfake attacks, infiltrating critical areas such as electoral processes.
In conclusion, Digital Identity holds immense potential but requires a delicate balance between security and user convenience. Sumsub’s innovative approach strives towards creating a trustworthy and efficient Digital Identity ecosystem, shaping the future of online transactions and interactions.
TLDR: As the digital world evolves, the significance of Digital Identity continues to rise. Platforms are focusing on security, balancing user convenience and data protection. Sumsub leads the way with Reusable ID solutions, emphasizing data security and regulatory compliance to combat fraud and ensure user privacy.
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