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Verifying identities is a common but repetitive task, often requiring individuals to provide identification multiple times for different services. This is especially prevalent in financial services, where customers are repeatedly asked to submit identification documents, such as passports, driver’s licenses, or social security numbers, even if they have previously provided these during the initial onboarding process with a bank. This repetitive procedure is not only time-consuming but also exposes sensitive data to potential security risks.
Similar challenges are faced in other industries, where users must frequently re-verify their identities to access services like healthcare, social media, and transportation. The constant need for identity verification is not just an inconvenience—it also significantly increases the risk of data breaches, leading to identity theft and financial loss.
In 2023, a survey revealed that 63% of customers abandoned digital onboarding processes for banks due to delays and complexities in the verification steps. This statistic underscores the need for more streamlined and secure identity verification processes across all industries to enhance user experience and protect sensitive information.
Current Landscape of Identity Verification
Identity verification the process of confirming an individual’s claimed identity, is heavily reliant on centralized systems managed by government agencies and private corporations. These entities collect, store, and manage personal data, often sharing it with third parties—sometimes with limited consent and varying levels of security. While this approach has been standard practice, it carries significant vulnerabilities.
For example, in January 2024, Trello, a popular project management platform, experienced a breach in which data from 15 million users was leaked on the dark web. The attackers exploited publicly accessible resources within Trello’s centralized system, highlighting the risks associated with inadequate security in centralized data storage.
The identity verification landscape combines traditional methods with emerging digital solutions. Many organizations still rely on physical documents and manual verification processes. For example, some financial institutions continue to require in-person verification of identity documents, which can be cumbersome and time-consuming. On the other hand, digital identity verification solutions, such as digital document verification, multi-factor authentication (MFA), and biometric data, are becoming increasingly popular for quickly confirming an individual’s identity. However, these digital methods often require users to repeatedly provide various forms of identification across different services, leading to user fatigue and inefficiencies.
Identity verification processes and requirements vary across sectors. Banks, for example, might require a government-issued ID and proof of address, while online services may only ask for email verification or social media logins. Each service or organization typically demands separate verification, leading to repetitive submission of the same information. This fragmented system not only causes inefficiencies but also creates security vulnerabilities due to multiple data storage points. A breach at any of these points can have severe consequences for individuals.
How Reusable IDs Streamline Identity Verification Process
Reusable Identities streamline the identity verification process by eliminating the need for repeated identity checks. By establishing a single, verified digital identity, users can share specific attributes with different services without undergoing multiple verification procedures. This approach simplifies the identity verification process and empowers individuals to create a digital identity with verifiable attributes, such as name, date of birth, and address, which can be selectively disclosed to different entities.
This concept is somewhat similar to Single Sign-On (SSO) systems used in corporate environments, where employees use one set of credentials to access various applications. However, reusable identity differs from SSO in its broader scope and application. While SSO is focused on streamlining access within a defined centralized ecosystem—like Google users accessing various Google services such as Gmail, Google Drive, and YouTube with a single login—reusable identity aims to create a universal digital identity usable across multiple organizations, services, and even physical interactions.
Reusable identity also differs from federated identity management. Federated identity allows users to utilize their existing credentials from one service (identity provider) to access another service (service provider). For example, using a Google account to log in and access social media accounts. Reusable identity systems, however, vary in scope, technology, and trust models, often leveraging decentralized technologies like blockchain for secure and verifiable identities.
The Expanding Landscape of Reusable IDs
While reusable IDs are still an emerging technology, several real-world examples highlight their potential to streamline processes and enhance security. Digital wallets, such as Apple Wallet and Google Pay, are early examples. These wallets store personal information like credit card details and boarding passes. They allow users to share this information securely with merchants and airlines. Although not full-fledged reusable identity systems, they demonstrate the potential for storing and sharing verified information.
Another example is Estonia’s e-Health Record system, which utilizes reusable digital identities to enable citizens to access medical records, schedule appointments, and order prescriptions online. This system significantly enhances healthcare efficiency and gives patients more control over their health data. As more governments begin to adopt digital ID systems, the benefits of reusable IDs become increasingly evident.
The market is also seeing the emergence of new reusable ID products, with more developments underway. For instance, Identity.com is developing a solution that leverages verifiable credentials, allowing customers to identify themselves once and then reuse that verification across various services. This innovation not only improves user experience but also reduces the risks associated with repeatedly sharing personal information.
How Reusable IDs Works
Reusable identities operate on the principle of “verify once, use everywhere,” allowing a single, verified identity to be utilized across multiple services. Reusable identity systems leverage Verifiable Credentials (VCs) and Decentralized Identifiers (DIDs). Here’s how it works:
- Initial Identity Creation and Verification: An individual establishes a digital identity by providing necessary documents to a trusted issuer, such as a government agency or financial institution. This involves a one-time verification process, confirming identity through documents, biometrics, or other methods. Upon successful verification, a digital ID with unique identifiers is issued as a verifiable digital credential.
- Storage of VCs: The digital credentials are securely stored in a digital ID wallet controlled by the individual. This wallet, whether a mobile app or web-based service, grants the individual full control over their data.
- Selective Disclosure: When verifying their identity with a service, individuals can selectively share specific information. This approach discloses only necessary data, reducing exposure to risks.
- Verification of VCs: Service providers authenticate a user’s digital identity by verifying their cryptographic keys, enabling service access without repeated ID submissions.
Benefits of Eliminating Repeated ID Requests
Eliminating the need for repeated identity verification offers numerous advantages:
- Enhanced Security: By reducing the frequency of ID submissions, the risk of data breaches and identity theft is significantly diminished. Fewer data points mean fewer opportunities for malicious actors to exploit vulnerabilities.
- Improved Convenience and Time Savings: Users benefit from streamlined access to services by avoiding repetitive verification processes. This saves time and reduces frustration, especially in urgent situations like medical emergencies or travel bookings. Examples like LinkedIn’s integration with Google or Facebook demonstrate the potential of reusable identities in simplifying registration.
- Enhanced User Experience: A seamless identity verification process contributes to overall user satisfaction. The ability to access multiple services with a single ID fosters loyalty and engagement with businesses.
- Reduced Costs: Organizations can achieve cost savings by eliminating redundant identity verification processes and reducing data management overhead. This allows for reallocation of resources to core business functions.
- Improved Regulatory Compliance: Reusable ID systems can facilitate compliance with data protection regulations like GDPR, which protects individuals’ privacy rights. By minimizing data collection and storage, organizations can reduce their exposure to potential penalties.
Conclusion
The current system of repeated identity verification is both inconvenient and insecure. Reusable IDs present a forward-thinking solution, enabling individuals to verify their identity once and securely use it across multiple services. This approach not only enhances security but also significantly improves convenience and reduces costs. As digital identity technologies continue to develop, the adoption of reusable IDs can fundamentally change how we manage and protect our personal information, making the process more efficient and secure.
Identity.com
Identity.com, as a future-oriented organization, is helping many businesses by giving their customers a hassle-free identity verification process. Our organization envisions a user-centric internet where individuals maintain control over their data. This commitment drives Identity.com to actively contribute to this future through innovative identity management systems and protocols.
As members of the World Wide Web Consortium (W3C), we uphold the standards for the World Wide Web and work towards a more secure and user-friendly online experience. Identity.com is an open-source ecosystem providing access to on-chain and secure identity verification. Our solutions improve the user experience and reduce onboarding friction through reusable and interoperable Gateway Passes. Please get in touch for more information about how we can help you with identity verification and general KYC processes.