More Digital IDs, More Investing?
As digital identity plays a critical role in financial services, an unlikely source is spurring the development of open, sustainable, and scalable digital identity technology for a humanitarian purpose.
ID2020 is an organization that is bringing private industry and non-governmental organizations to address portions of the United Nation’s Sustainable Development Goal 16 regarding the providing of legal identities of the 1.5 billion people who lack them by 2030.
As a beneficial knock-on effect for the investment industry as those who also are ‘unbanked’ will be able to start participating financially.
“What we believe is that business-as-usual will not be sufficient to bring about transformative impact because the current market failure encourages siloed non-interoperable approaches,” said Dakota Gruener, executive director of ID2020, speaking at the ID2020 Summit held at the UN Headquarters in Midtown Manhattan. “I believe identifying this as a market failure is an opportunity, not a criticism, allows us to use a market design and use a holistic approach, which brings together experienced people in the field as well as newcomers, the public sector, and the private sector.”
To help meet the organization’s goal, ID2020 formally announced a new alliance to bring stakeholder from governments, NGOs, private industry to spur the growth of a digital identity ecosystem.
“With proper governance, we will be sure to build in the design of this alliance assurances that the paramount concern for us in this room privacy, individual data ownership, and etcetera are respected and upheld,” she added.
Developing the complementary technologies and platforms isn’t the greatest challenge ID2020 faces however.
Alliance members Accenture and Microsoft already have developed a prototype in a matter of six weeks, according to David Treat, a managing director at Accenture.
“About six months ago we workshopped with Microsoft ways to link biometric data to a blockchain,” he said. “Three months ago, we met with ID2020 and took on building the prototype.”
The nascent platform provides users with the ability to collect credentials, or “stamps,” from various interactions with authorities such as governments, educational institutions, and private industry to develop their digital identities. It also provides users with control of which part of their digital identities they share with others.
The ultimate solution would need to be based on an ecosystem instead of a single platform to address local issues, noted Edgardo Yu, chief, Beneficiary IT Solution Services at the World Food Program, during the summit.
“We find in our work there are a few use cases where it is cross-border, which certainly is important, but a lot of the problems of the 1 billion people without legal identities are local,” he said. “What ever ecosystem we establish whether it is technology, a digital means, or using paper, they have to go local.”
As ID2020 hashes out its governance and technological issues surrounding its approach, it can look towards Aahaard digital identity system that the Indian government started for best practices.
Aahaard uses biometric and demographic data to provide users with a unique 12-digit identifier, explained Pramod Varma, chief architect at the Unique Identification Authority of India and who also presented at the summit.
The platform was relatively straightforward to build for the five-person technology team, according to Varma.
“It’s not about the technology,” he said. “It is getting it adopted, getting the design right, getting the simplicity of the design, and getting the incentive model right, that is very important.”
Aahaard provides authentication as well as know-your-client services for those Indians using the system.
“We do about 600 million authentications a month, and as of last month we did about 30 million authentications a day,” he said. “We have about 500 million people in the country who have been authenticated.”
Regarding KYC, the service has shrunk the time it takes to open accounts from approximately four hours down to about five minutes, all without paper, Varma added.
Providing digital identity is just the first building block that India deployed to develop its digital economy.
According to Varma, the government of India has also implemented an open protocol that allows its citizens to sign agreements with digital signatures under the IT Act of India.