Why confusion caused by Digital ID headlines poses a risk to the future of financial inclusion

Tony Blair hit the headlines last week. The coverage, by and large, was far from favourable - branding the former Prime Minister’s plan for government issued Digital ID cards “creepy” and an afront on civil liberties.

Interestingly however, the document in question - ‘A New National Purpose: Innovation Can Power the Future of Britain’, doesn’t actually suggest the use of government-monitored physical Digital ID cards for UK citizens. Despite what much of the, quite forceful, backlash would have us believe.

It does argue that Digital IDs should be held on an individual’s personal device, and that the purpose of said IDs is to streamline and improve online interactions by giving ID holders the ability to quickly, and easily, prove their age, address, their right to live and work in the UK, and driving license validity etc. In other words, the ability to more easily demonstrate that they are who they say they are, and are therefore eligible for specific services.

So far, so good. In fact, nothing that has not already been covered off in discussions leading to the publication of the Digital Identity and Attributes Trust Framework (DIATF) - a framework of rules, policies and standards that aim to support safe, efficient and effective use of Digital ID solutions in the UK. Something we at Synectics Solutions wholeheartedly support.

Which begs the question. Why so much controversy?

Aside from the media-fuelled misrepresentation and confusion re physical ID cards, the trigger for much of the negative reaction received seems to boil down to 3 key things.

• The concept of ‘government-issued’

Mr Blair and the wider team involved with the report suggest that, rather than “creating a marketplace of private-sector providers” (which the DIATF has been established to help regulate), it is in fact much better for that side of things to be handled by government. Especially since most of the ID credentials used for online transactions today originate from government sources anyway i.e. marriage certificates, driving licenses. Given that last year, an ONS survey revealed 75% of UK citizens are more trusting of other people (e.g. private bodies) than the government, this detail has inevitably fuelled the fire.

• The omission of detail regarding ‘privacy’

Given point 1, it is both predictable and understandable that privacy has come up as a major concern. Yet this doesn’t appear to be addressed in the plan, doing little to alleviate obvious concerns.

• The limited scope of the Digital ID proposed

While mention is given to broad benefits for UK citizens and businesses, it’s important to point out that the plan outlined focusses on the use of said government-issued ID specifically for interactions with government services.

There is certainly a lot to be commended about the proposal – it quite rightly highlights that we live in a digital-first era and that antiquated processes must adapt accordingly, embracing technology to do so.

But the combination of these 3 factors (not helped by the misrepresented aspects outlined earlier) has whipped up a haze of confusion and mistrust that potentially has serious ramifications for the future of Digital IDs as a power for good. Especially when it comes to financial inclusion. A future that has been progressing rather well.

We must not forget that many individuals don’t have access to traditional forms of ID needed to access many basic financial services, in fact the Open Identity Exchange (OIX) believes that as many as 5.9 million people in the UK are “ID challenged” – for instance don’t have a passport or fixed address.

Similarly, current ID verification processes also rely heavily on credit reference agency checks, meaning that those with poor or no credit history (but who should be able to get access to specific financial products) often face unnecessary friction that significantly increases abandonment rates when applying.

Many of the Digital ID solutions being developed right now in line with the DIATF and GPG45 guidance (solutions designed to be wholly owned by the user i.e. it is they who control it and authorise parties to use the verified data presented), will help tackle this issue. How, by enabling financial service providers to confirm an individual’s identity and customer suitability, using a much wider range of safely and securely verified sources. Without compromising privacy.

What’s more, because the current digital ID framework and verification guidance supports holistic attribute verification processes that cover and cross-reference multiple information sources, it’s far easier for financial service providers to detect fraudsters. It may be relatively easy to fake a passport to establish a spurious ID, it’s much harder to fake a raft of wider contextual data from disparate sources spanning longer time periods. No system is fool proof, but the more layered defences in place, the lower the incentive for the fraudster to act.

However, these ‘force for good’ benefits will only truly be felt through widespread adoption of such Digital IDs. Which, while dependent on service providers (relying parties) signing up to them, is certainly reliant on consumer confidence. Nobody is going to use a service if they don’t fully trust or understand it.

Muddying the waters on Digital ID is not helpful. Clarity is. Which is one of the reasons we developed a guide to explain and explore the topic in detail. And why we fully support collaborations across the industry to highlight the potential benefits on offer.