Digital identity: proving it’s you

Story synopsis

Many of us bank digitally – yet we still often rely on paper documents to verify our identity.

We’ve collaborated with start-ups Onfido and Evernym to create a re-usable digital identity that’s simplifying an often-frustrating process.

Tested successfully in financial services, the identity gives customers control over their personal data while also helping to combat money laundering, fraud and other economic crimes.

We’re all familiar with the frustrations of juggling online passwords and usernames, filling in forms and finding paper documents to prove our identity.

As more of our transactions take place digitally, who would say no to a simpler and safer online life?

Through our collaboration with Onfido and Evernym, we’ve designed a new, digital and hassle-free way to verify identity.

Like a passport, it’s re-usable and owned by the individual. Unlike a passport, it’s digital and can be kept on our smartphones.

In 2020, successful trials of this digital identity enabled customers to use and re-use it securely to verify their identity with banks and other organisations.

A collaborative effort

“Developing this product and associated ecosystem was a collaborative effort - which can help improve customer experience and protection and solve institution’s onboarding challenges” said lead partner on the project Derek Ryan.

Each collaborator has contributed a vital part of the solution, delivering an innovative product that none could have created alone.

Onfido’s digital verifications, based on biometric data from a person’s government-issued ID and a selfie, are already used by fintech start-ups in the UK.

Working together, we’ve taken this method one step further, using it to create a digital identity that can be re-used by the consumer time and time again.

Stored in a ‘wallet’ app provided by Evernym, this identity can be stored and managed by consumers in the form of digital credentials.

The app is underpinned by Evernym’s digital credentials platform called Verity, which can be used by organisations to issue and verify digital versions of paper documents, for example, when opening a bank account, proving age or sharing qualifications to gain employment.

Our specific contribution was a new product called Optic. Adding an extra layer of security, Optic enables financial institutions to conduct Know Your Customer (KYC) checks using the digital identity in a similar way they would physical ID documents - but instead using an automated and digital method.

Regulatory expertise

With a smooth experience becoming more and more important to customers, financial institutions have been looking for ways to simplify their application processes while still complying with strict regulations.

Bringing together expertise from our Financial Advisory and Consulting teams, our aim was to make sure Optic would enable financial institutions to meet these obligations.

This meant applying the knowledge we share with financial institutions when advising them in areas like KYC and anti-money laundering – to arrive at a cost-effective solution banks can use with confidence.

Through the trial, customers successfully opened financial products using their digital identity, with more than half re-using it to open further live products.

Benefits - for consumers, institutions, businesses and society

“Our collaboration with Evernym, Onfido and other industry participants has showed how this portable digital identity can be used securely in the real world,” continues Ryan.

“It provides an opportunity to build an open and flexible solution that gives banking customers control of their personal information, improving their experience and protection while enabling institutions to provide digital financial services in a compliant, safe and secure way”.

Potential business benefits include opportunities to build systems that can, for example, solve companies’ recruitment challenges and support new business models while building trust in the digital era.

In addition, through enhanced and more secure service provision:

Customers have a vastly-improved experience - and the ability to store the digital identity on their phones means people are in control of their own data and who accesses it.
Banks can check that the digital identity has been verified by a credential provider they trust and has not been tampered with - with a secure solution that’s cheaper than current methods.
It provides our clients with the ability to understand who their customers are and, through ongoing monitor of customer behaviour, is able to detect potentially suspicious activities.

Now the system has been tested successfully in financial services, we’re looking forward to seeing where we can take it next.

The customer is in control

The digital identifier works in three stages.

1. The credential provider Onfido, verifies biometric data from the customer and issues a digital version of their identity.

2. The customer holds the digital identity on their smartphone and can choose to share this with banks when applying for or accessing accounts.

3. Financial institutions request the customer’s digital identity and will receive it only if the request is approved – Optic enables the institution to make background checks, verifying identity quickly and easily.