Home » Fraud Prevention » ID Systems & Services in Fraud Prevention

The impossible dream: just one Digital ID in today’s digital e-commerce world?

Digital Identities are already here. We all have one (and often many more) in some form or another, but in the e-commerce world that is very dangerous as the high levels of fraud show. The visionaries say we just need one, it is obvious. However that is easier said than done. One of the many problems is that there are many players wanting a share of the huge DI business pie. Already, some bank strategists are saying their long term goal is to dominate the digital identity ecosystems and KYC space to be able to take a major share of the financial transaction business.

Secure digital identity?

Edgar, Dunn & Co. Report in their report, Advanced Payment Report 2017, write that, “The demand for digital identity is clear as it has the power to increase automation, improve risk management, as well as unlock the potential to personalise services and deliver them in a simple, consistent and convenient manner.” And that, “Digital identity can be defined as any process where authorisation, identification and authentication are performed digitally.” EDC believe that the core applications in digital identity are:

Source & Copyright©2017 - Edgar, Dunn & Co. 

EDC’s survey of payment systems experts showed that:

  • most (97%) felt that the level of sophistication required to authenticate a transaction should be tailored to the level of risk associated with it
  • Less than 2/3 (63%) felt there is a need for a global identity system.

This shows important differences amongst the experts, let alone the general public, about what type of digital identity should be used and who the digital identity provider be. 

Who should be the digital identity provider?

According to the GSMA and the World Bank Group, there are four types of “digital identity ecosystems”:

  • Government-driven centralised system (e.g. Belgium, Germany, Malaysia)
  • Semi-centralised, federated system (e.g. Sweden, UK, Australia) 
  • Decentralised, open identity market (e.g. US)
  • Self-asserted digital identity (e.g. Facebook, Google, or other large internet players).

EDC reports suggests that the best positioned identity providers in each region are:

Source & Copyright©2017 - Edgar, Dunn & Co. 

The other question is what DI standards should they use? Governments are adopting similar but not identical systems, as are banks. The approaches by the big Internet players are really different

Then there is the even bigger question: who would you trust to provide the DI system:

  • The banks?
  • Governments?
  • Card schemes?
  • Third parties such as Facebook, Twitter, Google, Apple, Microsoft?

CTMfile take: Sadly, there is and will be NO clear winner. Also it will be all too complicated to sort out given the pressures on today’s governments and on banks/businesses, so it will be left to drift. The two winners will be, by default, in the consumer market - Facebook with their 2bn active users, and in the business market - LinkedIn(Microsoft) with their 500m users. Governments and banks cannot compete with these numbers.


This item appears in the following sections:
Fraud Prevention
ID Systems & Services in Fraud Prevention
Minimizing Fraud Procedures
Minimizing Payment Fraud

Also see

Comments

By John G Bullard on 5th Jul 2017:

Technically not an impossible dream, indeed it is not a dream…..the capability exists today….. but the number of credentials (one or more)used by at of us will really depend upon for what purpose/applications we intend to use it/them, and in what guise (eg as an employee, or in ones own right as an individual).
Furthermore true interoperability will be a key factor in just how many credentials are/are not needed… and it is not just a matter of Technology Interoperability…..
Policy, Legal & Operational dimensions of Interoperability are essential to a truly trusted credential…spanning multiple communities of interest across multiple jurisdictions.
Originally “digital identity” was seen as related to a human being….but as the Internet of Things and 4IR become ever more mainstream, such identities become fundamental to everyday life/civilisation as we know it….

By CTMfile on 7th Jul 2017:

John,
Agree that a single identity is what we all need and that standards such as Identrust’s could solve the problem. 
But what is going to overcome the obstacles to global agreement about which standard to use?
That is why I concluded, sadly, that the Facebook and LinkedIn identities will become, by default, the identities we will all have to(?) use.  Who is going to stop that happening?
Jack

Add a comment