Editorial

Digital Identity: Global Roundup

Digital identity news from around the world

Posted 19 February 2024 by Christine Horton


Global

The decentralised identity market size will reach $77.8 billion by 2031, up from $156.80 million in 2021. This represents a growth rate of 87.9 percent, according to a new report by Allied Market Research.

United Kingdom

The UK government wants to double the number of organisations that can become digital ID conformity assessment bodies.

A DSIT digital ID and trust pilot has been running for two years in a program for up to six candidates. But Biometric Update reports that only four slots were filled and now officials want to add four new ID and trust contractors competing to be among the final four companies deemed successful in certifying biometric and other products, services and processes.

The four to apply so far are AVID Certification Services, BSI, Kantara and NOA, UKAS records show.

Officials will accept fewer than four finalists, according to bid documents, but a core goal of the program is to provide digital ID and trust companies a choice, in line with ISO 17065 standard, of conformity assessment bodies.

United Kingdom

The Mayor of London, Sadiq Khan, has called on British ministers to support HS1, the operator of the Eurostar rail line linking the UK and France, to ensure it will be able to accommodate the European Union’s incoming biometric entry-exit rules.

The EU is implementing a new Entry/Exit System (EES) to enhance border security. This system will require non-EU citizens to register their fingerprints and facial images when entering the Schengen Area (which includes France and other European countries).

HS1 had warned that the biometric border screening rules may cause bottlenecks and compel it to reduce services.

“The success of the Eurostar is a vital part of London’s and the UK’s economic success. As it stands these new post-Brexit checks will cause chaos,” said Khan.

Estonia

Estonia is getting ready to introduce a mobile digital ID in the summer which will align with eIDAS 2.0 regulations for interoperability.

The eIDAS regulation issues guidance on the provision of digital trust services, which align data interoperability in terms of security and privacy on a European level.

Estonian citizens will be offered new eID to verify their identity in transactions with the government and private sector.

Portugal / France

Portugal and France have made digital identity cards and other official forms as legal as physical documents.

Portugal officials amended law 19-A/2024, putting documents available on the country’s id.gov wallet app — including vehicle titles, licences and public employee health cards — on the same legal and probative footing as conventional forms, according to news publication Diário Notícias, via Biometric Update.

The digital IDs are currently only available to nationals with an active digital mobile key. In April, proof of car insurance will be offered digitally.

The France Identité app is also live. It is a digital driver’s licence and identity card. Digital ID cards have been legal since 2021. The licence app was piloted in three regions before getting final approval. The government reportedly has no announced plans to delegitimise the physical counterparts.

Europe

Identity verification provider IDnow is joining a consortium of five partners including the IOTA Foundation, walt.id, SPYCE.5, and Bloom Labs with the goal of making Crypto Asset Service Providers (CASPs) and self-hosted wallets compliant with the European Anti-Money-Laundering Regulation and the Transfer of Funds Regulation (TFR).

The new TFR regulation in the EU mandates that all cryptocurrency transactions will need to carry identifying data of the sender and the receiver. According to the new rule, compliance with TFR is mandatory for all CASPs. Additionally, the new AML Regulation will require all CASPs to comply with similar AML rules as other financial institutions. For example, when a user opens an account and registers a wallet with a CASP, an identification process is required to comply with the new AML Regulation and TFR.

One challenge for CASPs to adhere to the new rules lies in GDPR compliance, as personal identifiable information (PII) should not be stored on blockchains or Distributed Ledger Technologies (DLT). However, to comply with the new regulations, CASPs need to know with whom they are doing business and continuously verify this information.

To address this challenge, the partners have formed a consortium to propose a system where a trusted party tokenises an identification process it has witnessed, allowing CASPs to have confidence in this process, without revealing any PII. The resulting soul-bound token (SBT) can be used for blockchain processes, enabling web3 native interactions. Furthermore, the trusted party can reveal the identity information, if requested by an authorized party, such as law enforcement, as well as revoke the SBT, if needed.

Global

Seventy percent of businesses report that fraud losses have increased in recent years and over half of consumers feel they’re more of a fraud target than a year ago, according to Experian.

Experian noted “the explosive popularity of generative AI has brought many benefits, but it’s also made fraud more accessible.”

It predicts fraudsters will use generative AI to accelerate “do-it-yourself” fraud with a wide range of deepfake content, such as emails, voice and video as well as code creation to set up scam websites and perpetuate online attacks. Fraudsters may also use generative AI to socially engineer “proof of life” schemes.

To safeguard customers, companies will likely have to utilize multilayered fraud prevention solutions that “fight AI with AI.”

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