Digital Identity Systems Are Increasingly Becoming Part of Multi-Component Ecosystems As Economy Becomes More Digitalized – Report

Digital identity is not the easiest concept to define, according to an update from Juniper Research. That’s because it overlaps with other, similar, areas.

Juniper Research noted that the crossover “with areas such as security, privacy and data management can be significant, and in some cases, they are indistinguishable.”

In the US, the NIST (National Institute of Standards and Technology) describes digital identity as ‘the online persona of a subject.’

The term ‘persona’ is used as an individual who can present themselves in “a variety of ways online.” The definition varies between countries, the team at Juniper Research explained.

This definition is further complicated “by the current multi-use ecosystem of digital identity.”

Juniper Research also mentioned that these digital identities are “made up of identifiers and patterns that are unique to the subject’s identity, which are called attributes.”

The World Bank defines digital identity as ‘a set of electronically captured and stored
attributes and credentials that can uniquely identify a person.’

As stated in the report, these attributes can be core biographic data, “such as name or address, biometric features, such as fingerprints or iris scans, or knowledge-based secrets, such as a password or a pet’s name.”

Juniper Research also mentioned that “another form of attribute is online activities, which can be behavior patterns, search history or other such details.”

These all make up PII (Personally Identifiable Information). Not all information is “needed to establish PII, and it can remain anonymous.”

In this context, Juniper Research says that it defines digital identity as: ‘A digital representation of an entity, which can be one or more individual pieces of identity data, an event, or a signal such as an assurance indicator and similar, yet to be determined, items defined by industry.’

The latter part of the definition is important, as concepts “such as decentralised identities, IoT (Internet of Things) identities, robotic identities and other emerging identities become increasingly prevalent.”

Digital identity attributes can be represented “or materialized through credentials,
such as a government identity number.”

Juniper Research added that “once this identity has been created, it can be used, and reused, to confirm a user’s identity in online transactions.”

As noted in the report this moves digital identity from the realm of establishing an identity to verifying it.

This can be seen in the “use of digital identity in authentication.”

Authentication can be defined as the verification of true ownership.

This transforms collected data into verified data, “confirming accuracy and forming the basis of trust, which can be used going forward in an identity system. For this to work, the data that forms the digital identity must be authenticated and tied to an individual.”

Juniper Research added that this “makes pre-authentication especially important, as any malicious actors who are able to steal identity information at this stage will be able to pass later authentication steps; using a seemingly authentic but fraudulent digital identity.”

Ensuring the accuracy of this step is not just important for individuals’ security, but “also forms the basis of compliance, in the form of KYC (Know Your Customer) checks.”

As the economy becomes more and more digitalized, identity systems “are increasingly becoming part of multi-component ecosystems.”

This change is brought about by a growing use of APIs (Application Programming Interface), open standards and identity networks.

The Juniper Research report added that the increase in identity networks is due “to the rising availability and convenience of verification.”

Remote onboarding of users will drive “the growth in digital identity app downloads
by a 126% globally, increasing the market from 2.3 billion apps installed this year, to
5.2 billion in 2029.”

This growth is largely driven by standardisation, such “as the EU rolling out the eIDAS2 frameworks and the UK’s Digital Identity and Trust Framework, which make it easier to build integrations between identity apps and third-party services.”

The use of biometrics to verify the user “against stored identity credentials as
critical for streamlining the user experience.”

According to the report from Juniper Research this process is “faster and more secure than verification methods such as passwords or one-time passcodes, which is incentivising digital identity app integration into a more diverse set of services, such as eGovernment and financial services.”

Given their typically poor user experience, eGovernment services “will be strong early adopters of digital identity integration.”

Due to how vital access to government services is, this “will translate into fast consumer adoption.”

The Juniper Research report concluded that providers of identity apps must prioritise integration “with government services to facilitate this high-value use case.”

Governments must redesign eGovernment services “to fully leverage digital identity apps, improving their user experience andcatalysing overall adoption.”



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