The Digital Identity Revolution
Identities are continually evolving in the digital era. Today, digital IDs are not just a convenience but a vital part of secure online transactions across numerous industries. Given the projected growth of the global digital identity market (from $28 billion USD in 2022 to $71 billion USD by 2027), the spotlight is now on interoperability.
At its core, interoperability allows an ID from one platform to be recognised, authenticated, and accepted by another. This integration and seamless communication across diverse systems are no longer optional but critical in our increasingly digital world.
A key benefit of interoperability is its ability to promote financial inclusion, providing access to banking services for the nearly 1.4 billion adults worldwide who are currently unbanked. With interoperable digital IDs, these services become more accessible.
The interoperability of digital IDs also aligns with the United Nations Declaration of Human Rights, which asserts every person’s right to recognition before the law. In the digital age, this right extends to digital identities accepted across platforms.
The Challenges and Opportunities of Interoperability
Interoperability brings certain challenges, such as the diversity of protocols and standards across platforms, potentially hindering effective communication among systems, and the necessity for advanced security measures, including robust encryption and authentication techniques.
However, the benefits far outweigh these challenges. Interoperable digital IDs remove the need for multiple usernames and passwords, thereby reducing the risk of security breaches. They also ensure that no one is denied access to important digital services due to the absence of a particular type of digital ID. Interoperability also boosts efficiency by allowing different systems to authenticate the same digital ID, saving considerable time and cost.
Security and Compliance
Interoperability is not just about technical compatibility but also concerns data privacy and security.
As the digital identity market grows, so does the threat of identity theft. In 2022, consumers reported losing nearly $8.8 billion to fraud, an increase of more than 30% over the previous year. Of the total 5.7 million cases reported to the FTC, 1.4 million (25%) were specific to identity theft. This emphasises the role of secure and interoperable digital IDs, particularly those fortified with biometric technologies, in safeguarding consumers.
Compliance with global data protection regulations paired with advanced biometric technology for accurate and reliable identity verification is crucial here. Biometrics add an unparalleled layer of security, offering unique, hard-to-replicate traits for identification while preserving privacy.
The Future of Digital IDs
Digital IDs strengthened with advanced biometric technology is the future of interoperability. It promises seamless, secure, and inclusive access to various platforms.