Who do you think they are?

For years, we have talked about digital identities and how to make them work. The fact is that most countries are lagging behind whilst a few are leading, such as India with Aadhaar. Where it is working, it is totally transformative. For example, India moved from only 35% of the population able to access bank and payment services to over 80% in less than a decade. Meanwhile, the UK, USA and Europe have no system. Why? A lack of focus, control, imperative and ownership between the business, bank and government communities. Is this about to change? Maybe.

The reason why this has come to a head is that digital crime is rising and rising fast. By way of example, authorised push payment fraud (APP) cases rose by 12% to 232,429 in 2023, with losses totalling almost £460 million, according to UK Finance.

I’ve blogged about these things quite a lot lately if you want more background:

• APP fraud in the app is costing us millions
• The unappy mess of APP in the UK
• Still unAPPy
• Tony Blair wants everyone to have a Digital ID

This sort of fraud could be reduced if we introduced a digital identity, which means that the fraudsters would find it more difficult to scam accounts and, if they did, there would be an easier digital trail to get the funds returned. That is what some believe. After all, should we not focus on the cure for the fraud issues rather than the outcomes?

Possibly, but the Payment Systems Regulator in the UK decided to attack the outcomes rather than the cure. In new regulation, coming into force on October 7th, UK banks will be subject to strict rules about APP and other scams. Under the new rules, UK banks must refund fraud victims up to £85,000 within five days. That’s a positive move, but it’s not enough. Regulators need to focus upon tightening the start of the process – a payment that is sent illegally – rather than just the end of the process – a payment that is processed illegally; and digital identities will help this.

Therefore, spurred by a discussion with OneID, I decided to write a white paper about the whole raison d’etre for moving to digital identities and you can download it below. Meantime, if you want a summary of what it’s about, here you go:

Abstract:

This paper explores the global developments in digital finance and the core issue of authentication, verification and identification. A digital identity is critical to all digital servicing and yet, today, is unresolved. Some countries have tackled this area well and completely transformed their economies and industries. India is a leading example which, this month, became a more investable market than China, according to the investable stock benchmark marked by the MSCI All-Country Index. How is the UK doing? Not well enough. What does the UK need to do? This paper explains.