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Article25 Apr 2023

Digital Identity: Verification is the Name of the Game

A new report from Citi Global Insights delves into the latest thinking around digital identity- including national ID schemes, corporate digital ID, how AI can help, and the concept of zero trust networks.

Questions of identity lie at the heart of almost every interaction in the digital age. Is the person or company you’re dealing with really who or what they say they are?

How can they prove it? How can you trust them? These are fundamental questions of our time. And they’re difficult but vital to answer.

It’s not an overstatement to say that getting a handle on the answers to these questions is the key to unlocking the full potential of digital societies and economies.

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Source: World Economic Forum

The new report, the latest in a series of content on digital identity from Citi Global Insights, updates some of the latest thinking around digital identity.

The report looks at national identity schemes. Such schemes hit the headlines recently when former U.K. Prime Minister and former foreign secretary William Hague (who is interviewed as part of the CGI report), included digital identity for every citizen as part of their radical call to overhaul of U.K.’s approach to technology- amounting to a fundamental reshaping of the state around technology.

The Citi report also looks at how a smart approach to digital identity can help corporates combat the growing scourge of cybercrime.  And it also examines how companies can deal with electronic verification of corporate identities or legal entities.

In supply chains, digital ID is increasingly important at every point of global trade to document, track and monitor trade flows effectively and efficiently.

Another big thing for companies, looking more inwards, and particularly at the IoT proliferates, is machine identity. This is a big identity challenge because CIOs predict that the average number of machine identities used by the organizations will explode in the coming years. Many already don’t know how many machines they have, or where they are.

For SMEs, access to financial services can be enhanced by corporate digital ID since a corporate digital ID system can address information asymmetries.

According to the BIS these are often more severe for SMEs than for large corporates, which typically have detailed accounting records and a long operating history.

As such, financial institutions tend to prioritise larger corporates, often at the expense of SMEs, even though the latter also contribute significantly to the global economy.

Micro, small and medium-sized enterprises account for around 70% of employment globally, the BIS says. approximately a quarter of GDP in low-middle income countries, and over 50% of GDP in OECD countries.

Individual digital ID is now seen as a core tool for enhancing financial inclusion, with the lessons increasingly also being directed towards the challenges facing SMEs.

And the full report goes on to delve into artificial intelligence and the concept of zero trust networks.

As digital IDs proliferate, the constant threat of data breaches is causing mounting concern. Now, thanks to artificial intelligence, a new way of protecting networks is becoming possible.

Until now, most network security has relied on a firewall that separates outsiders from insiders. This perimeter-based architecture works like a fence.

Now a huge shift is happening. In short it involves never assuming trust- even for insiders- but rather verifying their identities all the time. The full report looks at some of the implications of this new approach.

 

The report also contains short write ups of several conversations with leading experts on digital identity conducted over recent months, bringing you insights directly from those at the cutting edge of thought on digital identity. These include interviews with Citi’s EMEA head of public sector David Walker, Andrew Bud, CEO and Founder of identity solutions firm iProov, and several others

To access the full report, if you are a Velocity subscriber, please see here. (29 March ’23)

And please also see this recent interview with Ryan Rugg, head of digital assets at Citi TTS in which she speaks about some of the real life applications of digital identity, including with vaccine passes during the pandemic.

Citi Global Insights (CGI) is Citi’s premier non-independent thought leadership curation. It is not investment research; however, it may contain thematic content previously expressed in an Independent Research report. For the full CGI disclosure, click here.

 

 

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