Digital Identity Verification in 2024: Exploring Electronic Identification and Digital Identification Systems
The world is witnessing a significant shift towards electronic identity verification (eIDV), a digital means of verifying a customer's identity without the need for physical documents. This transformation is marked by varying adoption rates and approaches across countries.
Diversity in eIDV Adoption
Some countries, like Estonia, lead the way with over 90% of their population using national e-IDs for government and private services. In contrast, countries such as Germany, with less engaging platforms and decentralized efforts, see lower adoption rates. Belgium, however, saw a surge in adoption after switching to a more user-friendly mobile platform [1][3].
India, with 95% of its population having a digital ID, now mandates the tying of SIM cards, devices, and trading accounts to biometric login for enhanced security, driven by financial sector regulators [5]. The Philippines is advancing its national digital identity system, PhilSys, requiring biometric enrollment and integration with financial and telecom sectors [5].
Singapore, Nigeria, South Korea, the UAE, and several other countries mandate SIM linkage to national IDs and biometric authentication for telecom and financial services [5].
Regulatory Emphasis on eIDV
Regulatory frameworks worldwide focus on ensuring strong customer identification programs (CIPs) to combat money laundering and financial crimes. eIDV technologies are used to independently verify identities online, with rising emphasis on biometrics and device binding for enhanced security [2][4][5].
The European Union's PSD2 directive mandates strong customer authentication with multifactor elements—commonly biometrics and device verification—particularly for financial transactions [5].
The Importance of User Experience
To avoid losing customers during the onboarding process, it's crucial for businesses to build a user journey that spreads out the verification process across multiple stages [6]. eIDV employs tools such as biometric checks, digital ID, and face recognition to ensure the legitimacy of the client [7].
Overcoming Challenges
Companies often face challenges in verifying customers with digital IDs, particularly with applicants from India [8]. However, automated solutions can check documents from all over the world and handle the specificities of each country, bringing verification down to just a couple of minutes [9].
The Future of eIDV
The European Union is taking steps to adopt eIDV and make it more accessible, expecting that 80% of its citizens will use a digital identity for verification purposes [10]. The US and the UK are also taking steps towards digital citizenship, adopting digital ID systems and using biometric verification [11].
Summing Up
As the world moves towards digital identity verification, countries vary in adoption rates and technology, shaped by user-centric design, regulatory mandates, integration of biometrics, and device binding. Globally, regulations are increasingly emphasizing strong identity proofing, multifactor authentication, and centralized digital identity schemes to address fraud and compliance risks effectively [1][2][3][4][5].
[1] https://www.kpmg.com/us/en/issuesandinsights/articlespublications/identity-and-access-management/pages/identity-verification-in-a-digital-world.aspx [2] https://www.fintechfutures.com/2020/02/eidv-and-aml-regulations-driving-adoption-of-digital-identity-verification/ [3] https://www.forbes.com/sites/forbestechcouncil/2021/03/03/the-evolution-of-identity-verification-in-a-digital-world/?sh=6484b32f5842 [4] https://www.pwc.com/gx/en/services/consulting/technology/digital-identity/digital-identity-verification.html [5] https://www.mckinsey.com/industries/financial-services/our-insights/the-future-of-identity-verification [6] https://www.forbes.com/sites/forbestechcouncil/2021/03/03/the-evolution-of-identity-verification-in-a-digital-world/?sh=6484b32f5842 [7] https://www.forbes.com/sites/forbestechcouncil/2021/03/03/the-evolution-of-identity-verification-in-a-digital-world/?sh=6484b32f5842 [8] https://www.forbes.com/sites/forbestechcouncil/2021/03/03/the-evolution-of-identity-verification-in-a-digital-world/?sh=6484b32f5842 [9] https://www.forbes.com/sites/forbestechcouncil/2021/03/03/the-evolution-of-identity-verification-in-a-digital-world/?sh=6484b32f5842 [10] https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12526-Digital-Identity-and-Trust [11] https://www.homelandsecuritynewswire.com/dr20200714-us-department-of-homeland-security-announces-national-identity-exploration-program-to-advance-digital-identity-technologies
- As the digital identity verification (eIDV) landscape evolves, there is a growing interest within the business sector to leverage eIDV technologies for personal-finance applications, given their ability to independently verify identities online and combat fraud with biometric and device binding techniques.
- In the realm of data-and-cloud-computing, integrating eIDV with existing financial systems could pave the way for a more secure and streamlined business environment, further bolstered by the employment of technology to ensure the legitimacy of clients and combat potential financial crimes on a global scale.
