BY CAREY O’CONNOR KOLAJA
When I was at PayPal, I believed that managing and moving money was a right, not a privilege. It was my motivation for getting up each day to play a role in our ambition of democratizing payments. As my focus expanded beyond payments, I realized that even more fundamental to money is our identities. Having ownership over our identity is a human right, and how we validate who we are, what we are entitled to, and what we can access has never been more important than it is now.
Identity is more than a government ID
During a recent discussion with the founder Scott Edington of Deep-Labs, he reminded me that who we are when we go to work vs. who we are when we are at home are different. [yes even when we are living, working, and playing in the same spaces as we do now] So why do we pretend that the data which defines us is static? Who we are, what we disclose, and how we behave is based on the context of what we are doing, who we are with, and what we want to achieve. Our true identity is much more than a name given to us at birth or a government ID that is issued at age 18; our identity is a set of signals we physically and digitally emit. In this sense, our identities are dynamic. They shift and adapt frequently as we evolve through our lives.
our identity is a set of signals we physically and digitally emit. In this sense, our identities are dynamic. They shift and adapt frequently as we evolve through our lives.
So, in a fluid world, no longer is a static identity (or ID) sufficient to verify each other, our actions, or intentions. We must begin to embrace the future of adaptive identities, which will include important identity documents like driver’s licenses and passports but also new solutions to capture and connect additional identity signals (primarily digital) that suit the natural flow of our life as consumers and citizens. As David Birch recently wrote in his piece breaking down the Financial Action Task Force’s new guidelines for digital ID, “the recommendations highlight the benefits of trustworthy digital identity for improving the security, privacy, and convenience of identifying people remotely for both on-boarding and conducting transactions while managing the [money laundering and terrorist financing] risks.” In other words, we can benefit from broadening our identity set while still being responsible.
The market opportunities that lie ahead
The identity verification market is projected to hit $12.8 billion by 2024 and the biometrics market to reach $59 billion by 2025.
Identity verification that was once synonymous with opening a bank account is now a trending topic across the world. With recent events, we are now exploring identity verification beyond financial services; consider the vast ecosystems surging in healthcare, entertainment, education, democratic elections, hospitality, and mobility. In fact, with COVID-19, the need to link who I am, where I am and my health status has become a daily discussion around how we balance privacy with human life.
Adaptive identities and how to manage them
The future of identity verification and authentication is something more akin to how credit cards work today, where the consumer uses them and for the most part doesn’t get challenged or prevented from using them until they make an unusual deviation from their normal purchase patterns (such as purchasing an expensive large screen television in a different location than they are currently buying petrol and coffee in).
Using a credit card is continuous, seamless and adaptive, with less user “friction”—and I believe that identity verification and authentication will soon behave in a similar way: a perpetual, passive dynamic set of tasks that are informed by deep machine learning of context, content, historical patterns, and alternative data-sets creating signals that span multiple ecosystems. Our fluid, on-demand lives require shifts from static, one-time IDs to elastic, intelligent algorithms and data ecosystems that can comprehend and confirm our identities.
Our fluid, on-demand lives require shifts from static, one-time IDs to elastic, intelligent algorithms and data ecosystems that can comprehend and confirm our identities.
A note on identity fraud
Identity and trust verification done right is an invisible event that lets the right people move forward and stops the wrong people in place. Done wrong this practice can be costly due to fraud.
The current environment has spawned a large increase in bad actors seeking to take advantage of people going online for the first time, people online to survive, people desperately trying to balance working and living. With over 4 billion records stolen in the last decade, large scale data breaches have armed hackers with enough information to bypass security infrastructures. The current environment has added to this, spawning a large increase in bad actors seeking to take advantage of distracted individuals working from home or dispersed companies whose technologists are scattered in remote locations.
The rise of mobile technology and the platform economy has changed the consumer journey. The customer experience is demanding speed and platform economy has increased the frequency of digital interactions with our PII, and fraudsters see the many opportunities to curate various elements of PII and piece together a fuller picture of our identity. The cycles of our lives and the frequency of data transmission between businesses and customers require banks, financial institutions, regulators, and technology companies to revisit the safety and security of these interactions and transactions.
Security concerns extend beyond onboarding — companies must continually observe their clients’ activities for suspicious signs and stay informed about risk factor changes. In a recent survey of 1,068 Americans aged 18 and older, payment solutions provider TransUnion found 22% have been targeted by eCommerce fraud related to coronavirus. Overall, TransUnion Global reported a 347% increase in account takeovers and a 391% rise in shipping fraud attempts globally against its eCommerce customers in 2019.
The future context of our identities
There has never been a time when we need to build an ecosystem to fight fraud, help individuals manage their identities, and enable businesses to provide safer and more secure services. Identity management is at the core of our lives, whether we leverage identity keys to give access to each other or manage the identity of ourselves.
There is a role for all of us to play—roles for regulators and watchdogs, market-based approaches, and funders in protecting the privacy and spurring the adoption of user-centric, privacy-protecting, and portable digital ID.
The future architecture of identity management needs to transcend all industries, all cultures, races, social status, genders, and ecosystems. The first step towards this is acknowledging that we are all dynamic and unique, and through technology, we can create trusted tools that adapt to us, our actions, and our preferences.