With rapid digitalization of our lives, the internet has grown in importance over time. Nearly 5 billion people interact and perform transactions over the internet today. Operating in the digital world requires data to identify users or pieces of information to prove the user’s identity online.
But what is a digital identity? In essence, it is the virtual counterpart to a user’s physical identity. In the virtual world, proving the true identity of the user may be a challenge - perfectly summed up in this illustration.
While accessing an online account with a user ID and password worked for users earlier, it was vulnerable to data breaches and identity theft. When businesses digitize, one of the critical drivers for its future growth is enabling a strong identity verification service to allow users to transact securely.
The demand for digital identity
In conversations with organizations, we found that a large number of them were looking for secure identity solutions that enabled users to confirm their identity quickly and efficiently. The statistics highlight this as well. Over the next four years, the online identity verification space is expected to touch a staggering $12.8 billion (new numbers and studies are released monthly since the start of Covid-19).
As our current society and regulatory environment evolves in complexity, enterprises and governments are now taking action. By implementing digital identity solutions, they’re building a more secure and efficient place for digital transactions between users. It’s also easier now to collect data to identify a website’s users.
Several government entities have adopted digital identification systems in recent years. For example, Sweden entered the market by rolling out user authentication nearly two decades ago. Today, over 75% of its population use the system - all with limited personal data sharing.
Other countries - including Estonia, India and Argentina - soon followed suit. Nearly 98% of Estonians use the country’s eID (electronic identity) card. This has helped them increase their efficiency when it comes to filing taxes, voting online or even validating health records. Moreover, India’s digital identity system, Aadhaar, currently has an adoption rate close to 90% of its population.
Argentina rolled out a biometric-based user authentication system across its private and public sector. These trends show that countries are simplifying and securing data storage and privacy through portable online identities.
Business use cases for (digital) identity verification
Several established sectors, and more newcomers as a result of accelerated digital transformation driven by Covid-19, could benefit from digital identities.
Be it car rentals or other shared services, identity verification is helping organizations process data for identifying users and significantly improve their efficiency. For example, in the gig economy, online identity verification or a portable identity could help improve customers’ safety. Gig workers rarely meet their employers in person. This makes remote user identification an important step towards building security.
When it comes to high-risk transactions and banking, identity verification can be incredibly useful. With regulations such as PSD2, banks are required to provide account and transaction data for enhancing data security and privacy.
Businesses want to have that extra security knowing a customer is in fact who they say they are - but they also want their experience to be as seamless as possible. This is where come in.
Powered by biometric technology and liveness detection, our identity verification tool authenticates the true identity of the user in a few minutes. Besides the enhanced security, the user gets to control the personal data they share and who they share it with.
Sign up with Passbase today and see for yourself how digital identity can help increase give your product an edge.