1 Introduction
There are dual challenges to delivering digital services well: preventing fraud and accurately identifying users, including customers, employees, contractors, and suppliers. Identity verification is the bridge between enabling an excellent experience for the right users and keeping the wrong ones out. This yields a third challenge: facilitating a seamless and quick user experience while conducting identity verification without compromising security or regulatory compliance.
Developments in identity verification techniques are powered by a paradigm shift: a return to user-held identity.
Identity verification methods have made massive improvements in recent years, going from long, manual processes to all-digital flows. These methods include reading the embedded chip using Near-Field Communication (NFC) methods, matching algorithms for biometric verification, and with digital documents like an ePassport or mobile driving license stored in a user-held digital wallet. These developments are powered by a paradigm shift: a return to user-held identity.
This shift towards user-held identity is redefining how identity is verified, stored, and exchanged, making high identity assurance possible for in-person, digital, and hybrid interactions. Past, present, and continuing into the future, individuals use physical identity documents like passports and driver’s licenses for many purposes, including verification – documents that are physically held by the owner. But in digital business, identity typically follows a centralized model where organizations control user identifiers for workforce and consumer applications. However, the rise of digital credentials and digital wallets, such as ePassports and mobile driving licenses, is transforming this landscape. These digital credentials are user-held, allowing individuals to have greater control over their identity information while still meeting organizational needs. This shift enhances security and privacy, as individuals can manage their credentials, be it physical documents or digital credentials, while allowing organizations to reduce fraud and increase compliance. Thus, user-held digital identities are creating a more secure and user-centric framework for identity verification in both business and consumer contexts.
Many organizations are aware that verified identities positively impact security and user experiences, as indicated by survey data collected by KuppingerCole Analysts: 51.1% of survey respondents listed verified identity as a solution for their organization, with 39.1% of respondents indicating interest. Implementation of identity verification solutions is still an ongoing journey for many organizations.
Figure 1: The demand for verified identities is high with the majority of organizations indicating need
User-held digital identity is revolutionizing how identity is verified, stored, and exchanged. This paradigm shift is pivotal for the successful delivery of digital services, where knowing the user is crucial. Various services require customers to be verified according to specific guidelines such as Know Your Customer (KYC) and Anti-Money Laundering (AML), especially in financial sectors. Additionally, industries dealing with age-restricted goods or those prone to fraud must ensure robust identity verification to prevent revenue loss, data compromise, and reputation damage. Other industries that benefit from digital identity verification are the travel and hospitality industries, short-term rentals, financial services and banking, eCommerce, gaming, and healthcare.
Digital identity verification solutions, such as ReadID by Inverid, utilize NFC technology and cryptographic methods to authenticate identity documents securely. ReadID's orchestration capabilities allow for the integration of various verification components, including biometric and optical verification, providing a comprehensive and adaptable solution tailored to specific customer needs.
