Who owns your digital identity?
Hint: it's not you. However, increasing demand for self-sovereign identity could change everything.
According to Metadium, there is no agreement on a precise definition of self-sovereign identity. There is, nevertheless, broad consensus it is the future of identity verification. According to the UN Broadband Commission, “Solutions that work today for identity verification won’t necessarily be enough for the future. By 2020, half of the world’s population will be online—with the other half expected to be connected by 2025. And every single one of these individuals will be affected by complex issues of digital identity.”
Self-sovereign identity refers to individuals or organizations maintaining exclusive ownership of their digital and analog identities as well as determining how this personal data is distributed and used. Christopher Allen’s Ten Self-Sovereign Identity (SSI) Principles itemize the fundamental components of a self-sovereign digital identity framework:
- Existence — Users must have an independent existence.
- Control — Users must control their identities.
- Access — Users must have access to their own data and any associated claims without the interference of gatekeepers or intermediaries.
- Transparency — Systems and algorithms must be transparent.
- Persistence — Identities must be long-lived.
- Portability — Information and services about identity must be transportable.
- Interoperability — Identities should be as widely usable as possible.
- Consent — Users must agree to the use of their identity.
- Minimization — Disclosure of claims must be minimized.
- Protection — The rights of users must be protected.
Combined, these ten elements of sovereign ID means consumers regain control of their digital identities by enabling us to disclose only the data required for a specific online interaction. And according to author Alex Preukschat, “Blockchain technology is the crucial breakthrough that is now propelling digital identity forward into the era of self-sovereign identity.”
Self-sovereign digital identity + blockchain technology
“There is a general and growing expectation that the process of signing up for any service and purchasing any product should be secure as well as very fast and easy,” says Steve Ritter, Mitek Systems CTO. Blockchain technology fits the bill.
Blockchain is a secure, decentralized, transparent, and immutable process for distributing digital information without copying it. It is a public register of information gathered via a network operating on top of the Internet. Because blockchain technology stores data across multiple servers, there is no central access point. Complex cryptography ensures that identities are private, and unique cryptographic keys secure every piece of information in the blockchain. Most relevant to identity protection, “if one piece of information is changed without the agreement of the rightful owners, there are countless other examples in existence, where the information is true, making the false record obsolete.”
As consumers continue driving the demand for sovereign digital identity, Ritter and Mitek Systems, VP Global Marketing, Cindy White foresee a tipping point where people might refuse to do business with organizations that do not support sovereign ID technology.
Why financial services digital product managers need self-sovereign identity
How necessary is supporting sovereign ID to your financial services business model? The Mitek 2018 Digital Identity Consumer Confidence Report found 85% of people want to do business via websites that verify the identity of all users, and 67% prefer doing business with a website that can guarantee a person is whom they claim to be. According to Gartner Research, consumers also care about how companies manage the mobile identity verification process. “By 2022, digital businesses with great customer experience during identity corroboration will earn 20% more revenue than comparable businesses with poor customer experience.”
Self -sovereign identity solves two challenges for financial services’ digital product managers: confidence and risk. Accepting a customer’s sovereign digital identity as verified by the decentralized, irreversible, and transparent blockchain builds consumer confidence in your platforms and facilitates KYC/AML compliance.
Self -sovereign identity also reduces costs associated with multiple identity assurance systems by limiting PII to what’s necessary to complete the desired transaction.