Tuesday, 28 February 2017

Digital Identity - what could it mean for consumers?

In our latest blog post Amanda Long, Director General at Consumers International, discusses the topic of digital identity and the potential benefits and threats for consumers.

The idea of people having an easy way to prove their identity online through a digital identity is not new, but has so far been used mainly by governments enabling citizens’ access to public services. Austrian citizens can use an approved app on their smart phone, or a smart card to apply for benefits, do tax returns or access healthcare. 

A digital identity is a means by which individuals can prove their identity online - for example, job applicants needing to prove their residency status, or even qualifications.  It links up to an identity checking system which can verify that the person with that identity is who they say they are – both online and in person. This means people can use their digital identity credentials to access services or products without having to physically present valuable documents, such as passports, birth certificates, driving licenses or a handful of utility bills.

Digital identity could represent a comprehensive solution to many millions of people who are effectively barred from entry to many things that could improve their quality of life. Without traditional forms of documentation, transactions like renting accommodation, setting up a bank account or getting a mobile phone contract become impossible.

It could also solve problems for consumers in more developed markets, wherever identity is a problem. According to a start-up digital identity provider: “Age verification online would prevent underage users from opening inappropriate social media accounts, and ensure that minors cannot access adult content. It would also help online retailed to confirm that someone is eligible to buy age restricted goods like DVDs, computer games, alcohol, cigarettes and knives” (YOTI)

Digital identity could potentially deliver financial inclusion, seen as a strong route out of poverty - or at the very least accelerates us towards it. The World Bank has a programme dedicated to identity and financial inclusion, ID4D – which “helps countries analyse problems, design solutions, and implement new systems to increase the number of people with official identification and the development impact of the overall identification system.

Of course for some people, the scope that any kind of centralised identity system has for government surveillance and discrimination will be cautious about the implications of digital identity systems. With this large caveat in mind, what is there that we learn from the pioneering steps governments have taken in exploring digital identity that might be useful for budding consumer applications? The UK digital identity verification programme has developed a set of Consumer and Privacy principles to guide practice. 

These types of frameworks will be important as the implications of this technology could be significant. If it is not designed with protection in mind and regulated accordingly:

-          Individuals’ privacy could be at risk, with the potential for personal data for all parts of your digital existence being held by digital ID verification services, as a means to authenticate who you are, with you having little or no control of what’s collected and stored or how it is being used to make decisions about you.  If alternative income streams to monetising consumers’ personal data aren’t identified then the risks to privacy will continue.

-          There is a threat of lack of consumer choice. It is very possible that a critical mass could form of people using a particular digital identity service that means it is effectively forced onto everyone.  This could mean less competition between digital ID verification providers and also a weakening of consumers’ rights to protection. In this scenario, the speed at which a particular service is adopted by a mass of people may mean that the opportunity to check, challenge and reform terms and conditions of the service are reduced. An individual who is swept up with this, who sees it as the only way to continue access to a product, may agree to terms and conditions that if given more time or choice they would not.

-          We might also see a situation where one person would need multiple digital identities, in order to access a variety of services as companies may not recognise the same identity providers.

-          The liability model for digital identity is also complex. For example, should digital identity providers be responsible for actions done based on the authentication they give?

With so much potential for consumer benefit and significant threats at play, consumer organisations must build up their expertise on this issue so they can influence the private sector as it develops digital identity systems. Consumer organisations are in a strong position to draw upon existing public sector practice, and the need for trust, confidence and consumer protection in digital systems to influence this nascent industry for the better.

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