Adopting the Digital Identity Revolution: A Strategic Imperative for Identity Verification Companies and Their Clients

In the realm of identity verification, a monumental transformation is underway as governments worldwide increasingly recognize the advantages of transitioning from conventional physical identification to dynamic digital identity systems. This paradigm shift is rendering traditional document-based identity verification obsolete.

For identity verification (IDV) companies, this transformative wave presents an extraordinary opportunity to expand their services and assume leadership roles in the shift from physical to reusable digital identity verification.

However, companies that persist in relying solely on physical document verification run the risk of becoming obsolete in an increasingly digital age.

This communication will delve into the crucial digital identity initiatives that IDV companies and their clients should be well-informed about. It will explore their far-reaching implications and underscore the vital importance of offering reusable identity solutions to remain at the forefront of the global transition towards digital verification.

The advantages of reusable digital identity are manifold:

• Cost Reduction: By eliminating the need for repetitive end-customer verification and physical document validation, costs are significantly reduced.

• Enhanced Customer Experience: The implementation of reusable digital identity translates to higher onboarding success rates and an improved customer experience.

• Data Management Simplification: Managing databases of end-customer data becomes unnecessary.

The estimated total addressable market for reusable digital identity in 2026 ranges from $133 billion to $533 billion on a global scale. IDV companies, armed with their existing relationships and operational processes, are poised to dominate this burgeoning market by adopting the right technological strategies."

Global Initiatives in Digital Identity

Digital Driver’s Licenses

Countries around the world have initiated digital driver's license projects, often referred to as mobile driver's licenses. This trend has gained traction in nations like the US, Korea, UK, Australia, Denmark, and the Netherlands. Most of these countries are adopting the ISO mDL (Mobile Driver's License) standard for issuing digital driver's license credentials.

In 2023, California took a significant step by expanding a pilot program that allows citizens to obtain a digital driver's license in a mobile-friendly format. This digital ID can be employed for various purposes, including expedited airport security clearance and age verification when purchasing alcohol.

California's Department of Motor Vehicles (DMV) introduced this digital ID, known as "mDL" or mobile driver's license, which is accessible on mobile phones. The pilot program, now open to 1.5 million participants, offers a dedicated "CA DMV Wallet" app available on both iOS and Android platforms.

However, it's important to note that physical IDs or driver's licenses are still required since not all entities, including law enforcement, state government agencies, and businesses, currently accept the mDL. Limited support is available at select airports and retail locations. While the app retains certain data, such as your phone number and an encrypted photo of your driver's license or ID card, it doesn't store your personal information permanently.

It's worth mentioning that California currently does not support adding the digital ID to Apple or Google wallets; users must utilize California's dedicated app. The DMV has indicated that additional platforms may become available in the future.

California Governor Gavin Newsom had hinted earlier this year about the impending launch of digital driver's licenses. Recently, Los Angeles' NBC 4 reported that the pilot program had already attracted over 2,000 participants and was set to expand further."

 The European Digital Identity Initiative

The European Digital Identity initiative, introduced by the European Commission, aims to provide EU citizens, residents, and businesses with a digital identity facilitating personal identification and information confirmation. This endeavor holds significant importance as it intends to grant access to digital services across the EU, both online and offline, encompassing public and private sectors. It emphasizes user control over data sharing with third parties.

Under this initiative, every EU citizen and resident within the Union will have access to a personal digital wallet designed to store their European Digital Identity. The digital wallet empowers users to select the pertinent documents necessary for identification purposes, streamlining access to services by eliminating the need for redundant information submission.

Furthermore, in Europe, Finland has initiated testing of the world's inaugural digital passport, allowing travelers to cross borders using a digital passport stored on their smartphones instead of conventional physical documents. The EU envisions that at least 80% of its citizens will adopt digital IDs by 2030.

Additionally, the Netherlands boasts 'DigiD,' a digital identification system extensively used by Dutch citizens to access various government services online."

In North America

The Pan-Canadian Trust Framework, led by the Digital ID and Authentication Council of Canada, sets forth a collection of standards for digital ID verification throughout Canada. This framework is carefully designed to ensure that interoperable digital IDs can function seamlessly across provinces and territories while preserving individual privacy.

Corinne Charette, Senior Assistant Deputy Minister of Spectrum, Information Technologies, and Telecommunications Sector & Chief Digital Officer at Innovation, Science and Economic Development Canada, emphasized the significance of the Pan-Canadian Trust Framework Overview, describing it as a pivotal moment for the Canadian digital identity ecosystem. It underscores the commitment of both government and private sectors to collaborate in safeguarding digital identities through a robust framework that standardizes processes, promotes industry-wide practices, and facilitates the growth of trusted digital services.

In Australia

The Australian Taxation Office has introduced myGovID, a digital identity verification system empowering Australians to access government services online.

In Asia

Singapore's SingPass serves as the national digital identity system, with innovations like 'MyInfo' allowing users to share only essential information with businesses, ensuring minimal data exposure.

Impact on IDV Companies

The global shift towards digital ID initiatives is becoming increasingly evident. Historically, IDV companies have primarily focused on verifying physical documents, from passports to driver’s licenses, serving as the standard for confirming individuals' identities.

However, with the adoption and advocacy of digital ID initiatives by countries and corporations, the focus is transitioning from traditional verification methods to a streamlined digital approach. This signifies not just technological evolution but a fundamental reevaluation of IDV's fundamental processes and business models.

For IDV companies, this shift necessitates adaptation, or they risk becoming obsolete.

Adapting to this changing landscape extends beyond embracing new technology; it entails a complete overhaul of their approach to identity verification. Those seizing the opportunity to innovate in alignment with global digital ID initiatives are positioning themselves as leaders in a rapidly evolving industry.

Conversely, companies anchored solely to physical document verification run the risk of being left behind in the digital era."

Embrace the Future of Identity Verification with Reusable Digital Identity

Identity verification companies that embrace verifiable credential technology are poised to offer their clients a reusable digital identity solution.

Our Verifiable Credentials Platform equips IDV companies to convert verified identity data into reusable, fraud-resistant, and instantly verifiable credentials.

Benefits of Reusable Digital Identity:

• Reduces costs by eliminating the need for repeated end-customer verifications and physical document checks.
• Enhances the end-customer experience, resulting in higher onboarding success rates.
• Empowers IDV clients to transition into the era of government-issued digital identities.
• Eliminates the necessity to store and manage extensive databases of end-customer data.

If you have any questions or inquiries about Reusable Digital Identity, please do not hesitate to reach out to us!