Over the next five years, developments in digital identity are going to have a profound impact on our lives and how we think of access going forward. These new approaches will not only allow us to fight new fraud vectors and build trust with consumers but will improve privacy and security while also making our day-to-day lives easier and more inclusive.

The rise of digital IDs 

Traditional methods of identity verification are out of date in a digital world. Most identity documents (passports, ID cards and driving licenses) are currently issued in a physical format. They are distributed from centralized locations (normally the government) and have a high level of security. Features such as printing techniques and document format follow strict practices to ensure this.

But recently, there have been several experiments to break away from physical IDs as more services are being delivered online. For example, the Digital Identification and Authentication Council of Canada (DIACC) is already developing Canada’s system for digital identification and authentication.

Maintaining high levels of security is one of the biggest issues when it comes to digital IDs. They can lack security features, making them easier to forge or counterfeit. Or they might be temperamental — if a digital ID is stored on your phone and it runs out of charge, what then?

We don’t yet have a perfect solution, but we’re certainly moving in that direction, with regulators also getting on board. The EU has introduced the eIDAS regulation, which aims to provide a common legal framework for the cross-border recognition of electronic ID.

Biometrics will play an increasing role in identity

The use of biometrics to verify a person’s identity will increase. They are more secure, and you can’t forget them. We have already seen examples of such developments in recent years. U.K. bank NatWest and Mastercard teamed up to develop a biometric payment card that combines chip technology with fingerprinting. This rise of biometrics means that passwords and PIN numbers will likely become a thing of the past.

Behavioral biometrics — the idea that you can detect who a person is by how their phone moves in their pocket, their location or how a person types on their keyboard — will also play a key role. It’s a nonintrusive way to identify people using their consent. Attempted fraud may also be tracked through behavioral biometrics. Rather than authenticating users, a tracking approach would detect suspicious activity.

From a fraudster’s perspective, biometrics will make it more difficult for them to carry out attacks. So they’ll come up with new methods. We believe we’ll see more bad actors using deepfakes to try to spoof biometric verification in the future. Our defense methods will have to continuously evolve.

For some, the idea of using biometrics creates a degree of unease. There are questions around privacy and what could happen if such information was to be stored. There are already stringent privacy laws around the collection and storage of personal information, including the new California Privacy Act (CCPA) and the EU’s upcoming Digital Services Act. But another way of addressing privacy is through a decentralized model, which gives full control back to the owner of the ID. In the future, identity processes will need to be smarter and more refined, designed with privacy in mind from the very beginning.

Decentralized identity models will replace centralized ones

Centralized databases such as the credit bureaus limit user control and pose security issues. Data breaches are becoming more frequent, bigger in scale and more sophisticated. For the first six months of 2019, the number of breaches increased by 54% compared to the same time last year. This worrying trend looks set to continue.

A decentralized solution will give back users control of their identities while providing one-touch access. Essentially, everyone in the world will own and control the use of their own legal identity. Individual accounts with different providers won’t be necessary, nor will you need to share your data every time you sign up for a new service. And if there’s no centralized database holding your data, no third party can access this information without your consent.

It would give consumers privacy and convenience, as well as fast access to products and services. Businesses can easily remain compliant while bringing more customers on board. And finally, regulators will see fewer inconsistent standards.

Artificial intelligence

AI and machine learning are going to play a key role in identity verification and fraud prevention.

To deal with more sophisticated fraud attacks, AI will enable businesses to protect their users. AI will be used to fight AI, for example combating deep fakes with in-built algorithms.

Ultimately, an increase in the use of AI in identity verification will mean faster onboarding for customers, and a reduction in successful fraudulent attacks.

So how should you prepare for digital access?

  • Start thinking about how you’re going to manage and leverage these new digital identities at your first customer touch point. Do you have the technology in place to cope with them?
  • Customer experience is everything. Ensure you design your identity solution with the customer in mind, prioritizing how you safeguard their privacy and data.
  • Stay up to date with industry news, and research what the industry as a whole is doing to embrace the future.

This future will see the rise of secure digital identities, biometrics and AI, as well as a shift from centralized identity models to decentralized ones. All combined, these factors will help us move toward the perfect identity solution that benefits consumers, business and regulators equally.

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Author: Husayn Kassai ForbesCouncils Member – Forbes Technology CouncilCOUNCIL  – Paid Program Innovation

Source: Forbes.com