Challenges and Opportunities in Digital Identity

Today, many services that once required physical presence are now available online. From travelling, accessing the office, registering online, and purchasing goods or services - it can all be done digitally. The shift from physical to digital has forced businesses and organisations to adapt. Those who failed to adapt have fallen behind or become extinct, and this shift is expected to continue as the world becomes increasingly digital.

The key to functioning online as an individual is a digital identity and the ability to authenticate that identity when accessing systems, processes, and services. It is every organisation's responsibility to adapt and accommodate digital identities. There are many challenges in developing and applying methods and procedures to accommodate digital identities - access, authentication, and security while providing a positive user experience. At the same time, there are many opportunities for organisations willing to adapt. This is one reason we acquired QGen Group(now rebranded as ArriTech) in 2022: to capitalise on the opportunities in digital identity. The acquisition has allowed us to continue building on a fundamentally sound technology stack and leverage our leadership and know-how to continue the company's growth trajectory.

The companies and organisations that solve this puzzle will position themselves at the forefront in our increasingly digitised future—gaining more business control, operational productivity, and cost efficiencies across the organisation. This is our goal with ArriTech.

Regardless of the metaverse and virtual reality, chances are that we will always remain anchored in the physical world. We will have a seamless bridge that links our physical presence with the digital aspects of life. An individual should be able to interact with any business, organisation or government agency with the same digital identity. Allowing people to use their digital identity to access all the financial applications in their life, vote in their local municipality and general elections, book their holiday online and pass through border controls anywhere in the world.

Getting there is a complex task. A digital identity solution like this can include the following:

• Big data.
• Machine learning.
• Cloud computing.
• Biometrics.
• Blockchain.
• Hardware.

And that's without considering security, data collection, data control, and data privacy. Then there are geopolitical aspects for regulations and communication standards. All the while providing a seamless user experience that everyone between 18 years old to 95 years old can manage. It's no easy task, but solving this puzzle will improve efficiency, security, and convenience for individuals and organisations.

In the short term, we are moving away from data-centric approaches where organisations increase spending on digital identities and ID authentication. Instead of using data-centric methods, we will move towards document-centric practices.

Thanks to the advances in biometric authentication, namely Apple's Face ID and Android facial and fingerprint recognition, the friction around digital document verification is lessening. Old devices are being phased out, and most of the population has devices with biometrics for ID authentication.

Data handling has also improved. From several minutes, we are now down to seconds when corroborating data with an internal or third-party database.

These biometrics and data handling advancements have removed friction around digital document verification. A document-centric approach is also more secure than a data-centric approach because the latter's risks are too high. Data breaches are too common, and it is difficult to verify if the person claiming an identity is the true owner of that identity.

Outside conventional digital parameters, blockchain technology offers a foundation well-suited for seamless interaction. While the blockchain space is still in its infancy, at ArriTech, we have built a standalone blockchain-based KYC application, KnowMeNow, for instant identity verification. In this application, a user creates an on-chain identity where they authenticate their identity once, then gain access to connected merchants and services without further authentication requirements. KnowMeNow's approach to digital identity can streamline onboarding by establishing a single point of identity verification in an ecosystem of individual businesses and services.

The recent pandemic accelerated the need for better systems and processes around digital identities. Countries are more aligned, and many developing countries are prioritising digital identities. Government services will play a key role in how digital identity and ID authentication will shape up for financial services, technology, telecoms, aviation, and any other sector relying on consumer interaction.

One of the biggest challenges right now in the development and execution of digital identity strategies is the different needs between regions and countries because of cultural, economic, and political factors. Biometrics across Apple and Android devices have helped a great deal here. A trading platform in Europe with a modern digital strategy can verify the identity of someone in India using a document-centric approach. As ArriTech have demonstrated with KnowMeNow, blockchain holds many keys and provides opportunities, but the absence of regulatory frameworks and standardisations globally makes it challenging to gain traction and scale operations confidently.

In the next few years, as more governments have implemented digital representation of a physical identity document, businesses' and organisations' digital strategies will prove more effective.

The key takeaways about challenges and opportunities in digital identity are that: A consistent obstacle is gaining access to relevant third-party databases. Some companies will develop integrated data sets in-house and maintain systems to capture the growing digital population worldwide. Those who cannot develop systems independently will buy off-the-shelf solutions through the cloud. Many organisations will leverage Identity-as-a-Service (IDaaS) in their digital strategy to improve efficiency while decreasing costs. To be successful, some areas to cover in a digital strategy in the next few years can include:

Identity Governance and Administration (IGA). This enables security administrators to manage user identities and access across the enterprise. It can improve visibility into identities and access privileges and helps them implement the necessary controls to prevent inappropriate or risky access.

Implement a Standard for Communication Between Entities. Integration of user authentication, SSO and authorisation, ideally MFA, supporting standards such as SAML (Security Assertion Markup Language) or OIDC (OpenID Connect) between IdP (Identity Provider) and the SP (Service Provider).

Logging, Monitoring, and Reporting of ID Access. Logging is essential for monitoring all traffic and access to detect possible security exposures or threats. Events must be recorded and reported, containing helpful information for the organisation to prevent failures or security breaches.

Businesses and organisations must understand the value and importance of digital identity and make it a strategic priority. With ArriTech, we keep our digital strategy at the core, guiding business decisions to ultimately position us as a leading provider with innovative processes and useful solutions. Companies and organisations must establish a clear digital identity strategy, assign responsibilities to key individuals, and ensure that digital identity is integrated into the overall business strategy. By doing so, companies can efficiently and effectively position themselves alongside a digital population responsibly and securely.