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Digital ID: What businesses need to know

11th November 2022 - 4 min

The pandemic, remote work, and the rise in social media and online commerce has seen massive disruption to the working patterns and online behaviours of consumers and employers. Faced with a digitally expanding world, the question of identity, and how we can verify it, has been at the core of endless debates.

Since the pandemic, identity has undergone a huge shift, as concerned parties look to solve this problem. In the UK, the Department for Culture, Media and Sport (DCMS) recently created an agency to oversee new digital identity laws, while the EU’s digital wallet scheme will see citizens offered a mobile-based means to prove who they are.

The potential benefits of digital IDs are significant – improved onboarding, reduced costs and fraud prevention. In an ideal world, digital identities will provide a gateway for workers and customers to navigate today’s world, offering ease, security, and privacy. However, the current landscape is constantly developing, so there’s a lot businesses should know before jumping headfirst into digital ID verification.

Identity verification: a brief history

Identity verification stretches back thousands of years. In Ancient Babylon, fingerprints were used to mark business deals on clay tablets. Fast forward to the modern era, and passports, ID numbers, photo ID have all been and gone as leading ID methodologies. 

While digital identity started all the way back in the 1960’s with the password, as we spend more time online, the practice of verifying ‘we are who we say we are’ needs a fresh approach. Workforces and customers are distributed across the world and we all expect immediate access to the services we need. 

In fact, the slightest bit of friction in the onboarding process could mean the loss of a customer or a potential employee. Whether it is a business looking to take on workers, or consumers applying for current accounts and mortgages, trust must be established in a seamless, secure way for the end user.

Today’s era has brought the advent of facial recognition and biometrics, which already proved itself as fundamental in the response to the global pandemic. These much maligned technologies have been at the heart of reopening our economy, enabling many millions of people to securely access sporting events, music venues, theatre, leisure, travel and much more.

Despite the scaremongering stories about these technologies, they have immense potential for good. A truly successful digital ID technology like Xydus streamlines your everyday lives, helping us instantly verify ourselves across a huge number of use cases. 

What about on these shores? 

The UK has previously attempted several failed national identity schemes. This is due to the fact that the government has always ignored the value proposition to the end consumer, focussing on concerns like fraud instead. One reason the Blair government’s initial National Identity Card framework failed was because it didn’t communicate the benefits the system could provide to the general public.

You cannot ask a population to blindly hand over Personally identifiable information (PII) without explaining the benefits to them. In reality, no PII needs to be asked for in the first place. The most advanced facial recognition technologies do not even need to store the face, merely hold encoded data points representing a user's facial structure. Xydus is one such technology that never stores PII information (including faces) when authenticating or verifying identities.

What’s needed is a focus on why users would want to use the process. The primary concern for users is being able to do things quickly, easily, and in a way that provides them with security over their data. If the only thing being authenticated and verified is a user’s face, no ID number is required, and no Personally identifiable information (PII) should be stored. This puts consumers at ease and means there is nothing of any “use” for a bad actor to steal. 

A huge step change

Despite numerous attempts that fell by the wayside, one enormous overhaul to the way we verify identity in this country comes in the form of digital RTW checks.  Before the pandemic, right to work checks were required under Home Office rules to be conducted in person with the employee presenting documents evidencing their right to work to the employer. 

On 30th March 2020, temporary pandemic adjustments were made to the requirement to conduct in person right to work checks, allowing for digital checks. This meant checks could be carried out over video calls and for applicants to send a photo of documents to employers via email.

However, the current rules changed on 1 October 2022. All employers now have to use Identity Service Providers (IDSPs) to complete remote digital right to work checks. The digital checks will now only be carried out using images of documents that are verified by these providers and can no longer be conducted over a video call or via email. For the first time, the UK is moving towards a codified, standardised approach to digital identities. 

Time to future-proof

In a world of bots, deep fakes, hackers and scammers, digital identity needs a fix. The benefit of a digital ID solution is that consumers can prove who they are, wherever they are. Knowing answers to “proof of ID questions”, passwords and other basic formats to prove identity is fallible. However, stealing someone’s face is much harder to accomplish. 

While there’s a long way to go until digital identity solutions are safely leveraged by all - the UK’s recent RTW overhaul, and government’s move to create an overarching framework for digital identity trust is evidence that the nation is well on its way to creating viable digital identities.

Speak to one of our experts today to find out how our digital identity solution guarantees compliance with any Right to Work regulation around the world.

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