Digital identity is a constantly evolving concept and one that is “increasingly entwined with allied areas such as security, privacy, and management of identity-related data,” according to an update from Juniper Research.
Usually issued and/or regulated by national identity schemes, a digital identity can “serve an individual both online and offline.” The report from Juniper Research further noted that the concept of digital identity presents a more complex picture “compared to its traditional form where current multi-use ecosystems, heavily dependent on the sharing of identity credentials, are considered.”
It is made up of identifiers and patterns that “are unique to the subject of identity, broadly described as attributes, such as core biographic data (ie, name and address) and certain biometric features (ie, fingerprints, iris scan) electronically captured in the context of personal digital identity.”
In the context of digital identity, another source of attributes “is online activities (ie, behavioral patterns, search history, etc) that make up PII (Personally Identifiable Information) along with the biographic and biometric data.”
Juniper Research considers digital identity “to be a digital representation of an entity, this can be one or more individual pieces of identifying data, an event, or a signal such as an assurance indicator and similar, yet to be determined, items defined by the industry.”
Within the parameters of this definition, digital identity verification can be “considered not merely as identifying an individual but also validating their attributes and features represented digitally; using digital solutions.” The report added that reliable and independent digital identity and identity verification systems “offer compelling value addition to everyday lives of individuals.” They also improve “the experience of individual identification/verification at the time of onboarding and authenticating the identity of customers, to authorize account or service access.”
The report also mentioned that digital identity verification “boosts efficiency, lowers costs, and delivers a more favorable customer experience, which leads to service uptake.”
The emphasis on verification by both financial institutions and governments has “paved the way for the emergence of new verification and related identity interoperability standards.” The report added that another related issue is fraud; “although digital identity is neutral by nature, the juxtaposition of fraud and identity in a digital-first world has lent itself to different use cases.”
Juniper Research further noted that digital identity verification solutions, therefore, are crucial elements “in understanding how fraud takes place and finding ways to prevent it and/or halt it.”
This alignment between digital identity and fraud also “involves ensuring that verification is delivered successfully, ie, with minimum user/customer friction, while guaranteeing maximum safety and privacy possible.”
The spend on digital identity verification checks “will reach $20.8 billion globally in 2027; up from $11.6 billion in 2022.” This growth will be “driven by both the increasing prevalence of digital services requiring digital onboarding journeys, and the growing requirement for more advanced and robust identity verification systems in the face of rising fraud.”