The UK Has an Identity Crisis and the Banks Can Solve It

How UK Banks Can Address the Digital Identity Crisis

By Martin Wilson, CEO of Digital Identity Net

The subject of Digital Identity hit the headlines again at the end of 2021 as the UK introduced a digital covid pass which was met with serious concerns about data privacy, civil liberties and the introduction of a National Identity Scheme by stealth.

What many people don’t realise is that they already give up their identity data online every day. They painfully and repeatedly fill out the same details of name, address, email, phone number and passwords, scan documents, take awkward selfies, and share sensitive, personal information.

When they think about websites tracking their activity and storing this data, they envisage images of nefarious actors like hooded strangers on the dark web. But all sorts of websites, including social media platforms, have a huge amount of data on each of us.

Being online is the new Wild West with most of us not knowing where this data goes or how it is used. It is estimated that we all have over 200 digital identities on the web right now without any control over what that data is being used for or who has access to it.

My belief is that people should be able to safely and easily prove who they are online, while having complete control of their own data and preventing access by unauthorised third parties.

The best way to achieve this is through a trusted digital identity utility which lets people prove who they are in seconds. This will enable them to verify their age, set up new accounts and sign into their favourite accounts quickly and securely, safe in the knowledge that only they can access their own accounts, with full control of their data and a record of who has it.

It will not only remove inconveniences such as logging into accounts and constantly resetting passwords, it will also tackle larger issues such as the fraud epidemic which saw criminals steal over £753m in the first half of 2021.

Businesses will benefit too, as they will be able to quickly onboard new customers, safe in the knowledge they are who they say they are, reducing the risk of fraud and negating the need for manual checks on age, address or identity.

But the UK is far behind many in the provision of such a service. In Sweden, Norway, Denmark, Belgium and the Netherlands, this trusted utility is provided by a platform linked to the banks in those regions.

There is a golden opportunity for the UK banks to be at the forefront in providing a means by which people can safely identify themselves online. Our research shows they are still amongst the most trusted of institutions to be custodians of things we value; way ahead of other third-party providers such as the Post Office, social media or even government. In addition, they are the only institutions who have already authenticated the majority of UK citizens – 98% of adults in the UK have bank accounts for which their identity details have already been verified. 

The infrastructure to provide this service already exists thanks to the banks’ £1.5 billion investment in Open Banking. By supporting a trusted platform, banks could easily and quickly provide a safe and trusted means by which people could identify themselves online whilst at the same time protecting their privacy, civil liberties and avoiding a national identity scheme.

This would enhance the banks’ role as trust custodians, enable them to be a force for good by helping businesses and consumers tackle fraud and build new revenue streams. Furthermore, they can start to see a return on their investment in Open Banking.

If we can get banks and businesses on board and build a brand the general public can trust, we can create a ubiquitous digital identity utility which protects people’s data and makes it safe and easy for them to prove who they are online.