Mike Tuchen, CEO, Onfido.
When the world moved to digital-first transactions in 2020, online digital identity verification became vital. It’s how businesses can remotely yet securely verify identities and protect themselves and their customers from fraud while maintaining good online experiences.
Over the course of a decade, we’ve become used to taking a picture of our IDs and a selfie to prove who we are and access services online. As this technology has become commonplace, new challenges have arisen around the cost, liability and friction of repeating identity verification for every transaction. And the technology has again evolved into yet a new solution: shareable, reusable identity.
We’ve seen this come into play for international travelers—highlighting travel as a natural use case where one verification gives the user a digital asset to use again and again.
But the future of reusable identity is far-reaching beyond travel, with the potential to transform our day-to-day interactions across many industries and services. Liminal estimates the global TAM for reusable identity will reach $266.5 billion by 2027 from $32.8 billion in 2022. The need and the market are clear: For example, in Sweden, more than 99.2% of the population uses the BankID digital verification service—reaching 8.4 million users in 2022 who use it to open bank accounts and other online services from a network of more than 6,000 organizations. In Estonia, all citizens have a state-issued digital identity; for more than 20 years, it has been used in all corners of everyday life.
In the U.S., the patchwork of activity by different states has been slower to reach a unified digital identity framework or mobile wallet. This is where private companies like Apple and CLEAR have stepped in and where we’ll see continued growth.
Digital identity has seen advanced leaps in just the past few years, and the developments in biometrics, identity proofing and advanced AI fraud detection have paved the way for reusable identity to reach mass adoption.
Solving The Problem Of Privacy
From travel to opening bank accounts to hotel and car rentals, we hand over our identity details to access many things. But people are rightfully having more concerns about how their data is being stored and used: Identity fraud has gone up as much as 37% from 2022 to 2023.
A trusted, reusable, sharable identity, on the other hand, is created and stored on a user’s own device. “Verify once, share anywhere:” That’s the promise of a future with reusable identities that can be shared across a vast global network of businesses, where a user can select where, how and what parts of their identity to share and revoke access at any time.
The Business Benefits Of Reusable Identity
Alongside the consumer benefits, reusable identity is a cheaper way to verify users, with no need to store their data, a guarantee to be verified, and immediate response times with no waiting. We know that a smooth user experience is necessary for customer acquisition: 45% of customers will abandon the signup process if the user experience is poor.
Plus, the complicated patchwork of compliance regulations from states to countries can risk fines and damages for companies storing users’ private data. Giving users control of their digital identities frees businesses from the liability of storing private data and eliminates the data honeypot that’s such an attractive target for fraudsters.
A Vision For The Future
The future of reusable identity includes interoperability across platforms and use cases while straddling the digital and physical worlds. Mass adoption means public-private partnerships, which are currently growing.
Soon, we’ll use our pre-verified reusable identity on our devices with the same frequency that we pull out a driver’s license or national ID, presenting it both digitally and physically. And eventually, we’ll leave the physical IDs at home—or never acquire one in the first place. The difference is that when it’s user-controlled and digital, it’s much more secure, private and convenient.
After verifying and storing it, your digital identity can open a bank account and then apply for a mortgage. You can get your boarding pass for this afternoon’s flight while you’re getting ready at home, then breeze through to your gate. Instead of lining up for your rental car, you can share your reusable identity with one tap and then again to check into your hotel room. From buying age-restricted goods to setting up a new utilities account, a growing network of people will have a reusable identity stored on their devices, and businesses will want to join the network of places where it can be shared and used.
How To Get Started With Reusable Identity
The 2023 Gartner Market Guide for Identity Verification advises businesses to “prepare for a future built on portable digital identity.” Here are some points to think about for keeping your business competitive.
Look for fast, easy integration: Businesses need to speed up their sprint cycles. Look for reliable, cost-efficient IDV and sharing capabilities that are interoperable with existing legacy systems and the newest technologies.
Reduce costs and simplify operations: Lighten operational overhead with easy-to-share identity proofing. Organizations can be 5x more efficient in their IDV processing, shortening wait times, improving security, reducing administrative costs and increasing the quality of IDV.
Drive network growth and scale quickly: Reusable IDs are not static; they can be used cross-vertically and become multidimensional with every use. The unique qualities allow for a strong interconnected network, unifying operations between businesses and their partners.
Customers and businesses expect secure digital transactions and data maintenance—providing a solution that not only offers security but ease of access is a great start.
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