The question of how we effectively and securely identify people online and enable them to perform digital tasks in a safe and secure manner is one of the fundamental ones of our time.
The first challenge to overcome is that there are multiple definitions of what digital identity is. The market is complex and fragmented with many competing technologies being used to solve some of the issues facing our digital lives. Even NIST in its Digital Identity Guidelines struggles with a definition stating that “without context, it is difficult to land on a single definition that satisfies all”.
With no simple or single solution to this problem there is significant opportunity for technology companies to profit by developing targeted solutions to solve specific problems.
Is digital identity something to simply support digital onboarding and being compliant with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations or something bigger – a digital equivalent of a passport or national identity scheme and are we entering an era of person-centric digital identity or self-sovereign identity?
Digital Identity and document verification services solve an immediate problem in how to prove a person’s identity for access to online (remote) services.
In the absence of universal digital identities that can be used across services and cross-border digital identity, document verification services remedy the issue of trust between service providers and their users.
According to David Britton, VP Industry Solutions of Experian, who I spoke to during research for our latest Analyst Report, Digital Identity & Document Verification Market & Technology Analysis Adoption Strategies & Forecasts 2019-2024, right now “we are in a state of transition where we will have a combination of old and new identity – physical ID documents and digital identity. This is where eIDV is solving an immediate problem.”
The ability to onboard new customers to services through remote digital channels, web and mobile, is a pressing need for many organisations looking to reduce their physical footprint and support digital transformation projects while reducing the risk of fraud. Digital identity and document verification services aim to support digital onboarding and meet the latest AML, KYC and Customer Due Diligence (CDD) regulation.
A combination of ever-more accurate facial recognition, document verification and a wider variety of verifiable identity sources (data and signals) increasingly powered by machine learning (ML) and artificial intelligence (AI) are enabling service providers to adopt digital identity and document verification services in ever-increasing numbers.
I consider that digital identity and document verification services solve an immediate problem in proving an individual’s identity. Specifically, digital identity and document verification answer the questions:
- Is it a real user?
- Is the user authorised to use the data it presented?
- Can the service provider conduct business with the user?
- What is the risk of doing business with the user?
In solving an immediate problem for organisations, this is resulting in a very buoyant market with hundreds of millions of dollars of investment and intense activity from an M&A point of view.
At Goode Intelligence we’re confident that this market will offer growth opportunities for the ecosystem resulting in revenues of over US$15 billion by 2024 – a CAGR of 20 percent over the six-year period.
More information and forecasts are available from our extensive research in the first in our ‘Digital Identity’ series of reports, Digital Identity & Document Verification Market & Technology Analysis Adoption Strategies & Forecasts 2019-2024, published on 24th May: a 172 page in-depth investigation of the market for digital identity & document verification services.