Fast-forward banking: trusted digital identity becomes crucial
By Marius Coetzee, CEO of biometric experts Ideco.
Banking as we knew it is on its way out, with a bold new world of seamless, cardless, cashless financial systems set to change the way people live and transact forever. But this next level banking depends entirely on the ability to create a trusted link between the physical and the digital world.
Innovation in banking is taking hold around the world, and South African financial institutions are not lagging. Major local banks and financial services firms are rapidly moving to use next generation technology to innovate and improve the customer experience, harnessing facial recognition, voice recognition and biometric scanners to verify customer identity and authenticate transactions; as well as blockchain systems to secure and track transactions. In future, consumers will enjoy ‘ERA’ – effortless, reliable and accurate – authentication, with no need to remember their identity document, bank card and proof of residence in order to transact.
These developments are bringing consumers new levels of financial services, and greater convenience through mobile banking, cashless banking, self-help kiosks, cross border payments and faster inter-bank transfers. With any innovation comes a certain level of risk, but since innovation drives a competitive edge, this progress cannot – and should not – be slowed.
Banks may be taking the lead in this brave new world, but soon, digital identity will become the key to unlocking all transactions, services and government processes. Digital identity will ultimately enable everyday life, promising convenience, lower cost and greater trust in processes. But this can only be achieved when digital identity is effectively linked with physical identity and underwritten by an oracle who maintains this trusted identity, to ensure that the processes of engaging is seamless, trusted and accurate.
As digital identity becomes the most critical factor in unlocking a world of services and transactions, it becomes increasingly important to ensure that this digital identity is a trusted one.
Ensuring that there is a trusted link between the physical and the digital identity depends on anIdentity 4.0 environment, in which world-class, infallible biometric systems accurately capture biometric data, impenetrable algorithms ensure this data is secured, and trusted custodians serve to safeguard the data and authenticate identity, so facilitating transactions with an approved acquirer. Identity 4.0 therefore seamlessly establishes trust by linking the identity owner, the acquirer and the issuer in a single on-chain transaction. There can be no room for error, since once captured and authenticated, flawed identity data could exist within financial services blockchain environments forever.
The growing importance of digital identity as a valuable asset is reflected in moves internationally to call for sovereign identity, in which individuals seek to establish and ‘own’ their identity in the digital world./Ends