Digital identity can boost economic recovery and tackle social challenges
An assured digital identity can help bridge more than the digital divide, says Martin Wilson, chief executive of Digital Identity Net
We are all very aware that the past 12 months have transformed almost every aspect of our lives, forcing all of us to adapt in ways previously barely imaginable. From kitchen-table offices and schools, to digital socialising and the increased dominance of online shopping, our lives have changed significantly.
However, while we have all faced lockdown challenges, their impact has been felt very unevenly across society. The first lockdown resulted in the biggest decline in the UK economy on record, contracting by 19 per cent in the second quarter. Lockdowns two and three have dealt further body blows to the economy, forcing many thousands of businesses to permanently close their doors and the UK’s unemployment rate to rise above 5 per cent for the first time in over four years.
Existing social inequalities have been exacerbated by the digital exclusion of many vulnerable sections of society. This exclusion is much more than simply a lack of reliable online access, though this has certainly resulted in lost education opportunities for many less-privileged children.
The digital shift of so many aspects of our lives has created new challenges for individuals to prove their identity online, impacting access to finance, health and other essential services. It has also increased opportunities for criminals to prey on the vulnerable. From a business perspective, complex online customer sign-up processes are driving abandonment rates ever higher as consumers simply give up trying to complete frustrating form-filling tasks.
While an assured digital identity solution can help tackle the social menace of fraud, it can also address several aspects of social exclusion, which the pandemic has accentuated. At the same time it can provide a much-needed kick-start to economic recovery.
Fraudsters actively target vulnerable individuals through impersonation and identity theft. A Policy Exchange study estimated a £4.6-billion increase in online fraud since the start of the pandemic.
One particularly cruel form of such cybercrime is so-called romance fraud, where criminals create a fake profile on a dating website to lure users into handing over money. Charity Action Fraud suggests this type of scam has increased by 15 per cent over the past year, with more than £63 million stolen in 2020. If dating platforms introduced an assured digital identity, opportunities for this form of fraud would be significantly diminished.
Another alarming growth area under thepandemic is gambling misuse. Perhaps unsurprisingly, use of online gambling apps has increased during the successive lockdowns and along with it access by underage as well as addictive gamblers. Enabling the gaming sector to validate the true age and identity of an individual is a powerful tool in tackling the social harms that derive from gambling misuse, such as addiction and mental health problems.
The economic recovery, which we allso desperately wish for, is an example of where an assured digital identity solution can deliver wide societal benefits. A study by McKinsey details how an assured digital identity solution could generate upwards of 3 per cent GDP growth in the UK over the next decade. Likely benefits in 2021 and beyond being significantly higher, given the economic contraction of the past year.
Such an assured digital identity solution is not some long-term technology pipe dream; it is here and accessible now. OneID by Digital Identity Net is the independent digital identity platform about to pilot with some of the UK’s leading banks and businesses. Using the UK’s open banking services, individuals can leverage their existing assured personal identity, held in trust by their bank, to simplify and secure their online lives.
For businesses, and public sector agencies, introducing such a frictionless customer sign-up service gives them the assurance that the person they are dealing with is verifiable through the identity details held on their behalf at their own bank.
The infrastructure and the solution is in place now. The social need is tangible. The economic benefit is significant. Together we can make a major contribution to tackling cybercriminals, healing a growing digital divide, addressing social exclusion and giving a kick-start to economic recovery in 2021 and beyond.