How are digital IDs reshaping industries for a secure and seamless future?

The widespread shift to online reliance has created a greater demand for accessing various services online, including government public services to online retail payments. This increased digital dependency has raised the need for secure access and quick and easy identity verification online.??

Electronic forms of authentication and identification help to individuals to access these services smoothly and quickly, but they also expose new challenges in data privacy and security due to the increasingly complex threat landscape. We called upon our experts to share how digital IDs are already reshaping different industries, and what solutions are being brought forward to tackle the new obstacles they present, to unlock their full potential. ?

Creating more secure and smooth travel experiences?

Christi Lane, PMP , SPC, CSM , Senior Industry Advisor in Travel?

Gabriela Zanc, IAP , Industry Advisor in Travel?

Digital identity in travel will provide a way for the customer to capture all their necessary travel documents in a wallet on their mobile device, for example a state approved ID, passport, visa, boarding pass and more.?

In the US, the Transportation Security Administration (TSA) is accepting state-issued driving licences or ID cards via a TSA-approved application or digital wallet. Airlines already have mobile boarding passes that are generated at check-in to expedite boarding, and some work has been done within the airline mobile application; United is a good example use case, eliminating a traditional ID requirement at check-in including baggage.?

While digital identification is key to mitigating potential fraud and streamlining airport throughput, there are several barriers to successful implementation. Security does allow for passengers to opt out of any biometric identification. Additionally, standardisation of digital IDs is required to ensure they are interoperable with TSA systems. Finally, there are a limited number of states that have issued digital ID’s acceptable for TSA systems.?

In Europe, the EU's eIDAS regulation promotes cross-border recognition of electronic identities, facilitating seamless travel within member states. Building upon this framework, the EU Digital Identity Wallet Consortium (EWC) is leveraging the potential of the proposed EU digital identity to develop digital travel credentials. The EWC is actively engaged in pilot projects to expand the functionality of the reference wallet application for use cases related to digital travel credentials.?

The EU's smart borders initiative exemplifies the innovative applications of digital identity in border control, using automated processes and biometric verification. These advancements offer significant benefits to travelers for check-in procedures and security control, while airlines and airports stand to gain from operational efficiencies and cost reductions. Notable European initiatives include Lufthansa's biometric boarding program and Amsterdam Airport Schiphol's trials for seamless travel experiences.?

Despite these advancements, a key concern for the EU is ensuring the widespread adoption of its digital wallet among aviation stakeholders, businesses and citizens. As a novel concept, it requires a significant shift in mindset, and not only within the aviation sector. While the concept is broadly welcomed, the adoption of the digital wallet is contingent upon the demonstration of tangible benefits and widespread acceptance.?

The Middle East and North Africa (MENA) and Asia regions are also witnessing the development of digital identity regulations designed to facilitate secure and efficient travel. Notable examples include the United Arab Emirates' implementation of the UAE Pass, a digital identity initiative intended to streamline government and travel services. Similarly, Singapore's National Digital Identity framework provides a foundation for secure digital services, encompassing travel-related applications.?

Unlocking exciting opportunities in retail?

James Dennis , Senior Industry Advisor in Retail?

In retail, digital ID involves using secure, verified credentials to prove authenticity or meet specific requirements, such as age verification. It’s an important part of facilitating seamless transactions, reducing fraud and promoting trust.??

While there’s still scope for development, we’re already seeing this technology drive value across the sector, providing effective verification of both people and products.? On the product side, product passports document an item’s lifecycle and are helping to reduce the likelihood of counterfeit goods while also enabling frictionless trade. These passports contain a range of data such as origin, materials and sustainability credentials, which also helps to promote trust and transparency among consumers. Overall, it has reduced the need for traditional forms and manual authorisations, which were inefficient and time intensive.?

On the people side of things, digital ID is being used to simplify regulatory compliance, such as verifying proof of age when purchasing alcohol or other restricted goods. The ability to validate a customer in real-time helps reduce fraud risks and speed up transactions. This is especially important in cases where retailers are selling restricted items that could be misused, such as hardware shops selling tools, cutlery or utensils and knives. In these cases, it’s vital that digital ID is implemented effectively so we can safeguard against users adopting fraudulent identities for criminal means.??

Even this small snapshot of use cases shows how everyone across the industry can benefit – customers, suppliers and retailers. However, for retailers specifically, the technology comes with significant opportunities to tap into new markets. For example, brands can now consider selling age-restricted goods online, along with items such as prescription drugs. Previously, these exchanges relied on in-person verification. However, digital ID allows retailers to branch out into such markets, knowing they can do so while complying with regulations.??

For me, this is the most exciting use case as I think this will accelerate the ongoing transformation of the industry towards unified commerce. With more and more people shopping online, the ability to provide effective verification will revolutionise accessibility to previously restricted products, as well as reducing operational costs for retailers.??

Of course, leveraging this technology doesn’t come without its challenges. Successfully implementing digital ID involves overcoming data privacy concerns and ensuring integration with existing platforms. Across the industry, we’ll need to see collaboration for secure, interoperable solutions that meet global standards.???

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End-to-end protection through seamless payment experiences?

Andy Davies , Global Head of Payments?

Digital ID is the creation of a reliable digital representation of an individual associated with a payment device - cards, accounts, wallets or even crypto. When used in an onboarding flow, digital ID can make the process frictionless and secure; better for the merchant and better for consumer experience. With open banking it can enable greater insights for even better understanding and targeting of services. Connect all of this to hardware in mobile devices and link biometrics to ID and you have a truly secure end-to-end process, that can mitigate fraud and provide the seamless experience customers expect.?

For merchants it means fewer false positives and higher checkout success, positives that acquirers benefit from with more money moving more smoothly through the system. Enriched data insights also enables AI innovation which translates into more tools and value-added services. It could also obviate payment devices and allow new schemes to operate at the back of the process, opening the door to real-time payments, CBDC and more.?

Combine digital ID, AI and new rich data standards like ISO 20022 and I'm excited to see what can be done. Imagine buying an airline ticket and you’re onboarded and checked-out in one click. That’s smart, convenient and secure.?

But who stores, controls and refreshes the data is likely to be the biggest barrier, along with the associated data access costs. Data and a person’s digital ID is going to become their most valuable and critical asset and will need digital custodians, which will inevitably be commercialised. So there will be a balance to strike between storing and controlling data. In our hyperconnected world, with credentials stored on billions of mobile devices and on millions of servers globally, you have to assume bad actors will get their hands on data, this is where tokenization, (the replacement of sensitive info with digital surrogate ‘tokens’) become indispensable and will give consumers greater control of their data and who accesses it.?

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Digital IDs are enhancing personalised experiences in automotive ?

Ovidiu Anton-Porumb , Senior Industry Advisor in Commercial ??

In the automotive world, digital identity is a unique profile that connects drivers and their vehicles to services, storing information such as personal details, driving habits and vehicle history to make interactions smoother and more personalised. Thanks to innovations such as keyless entry, in-car payments, e-commerce and subscription-based services, digital IDs are making automotive experiences more personalised, convenient and secure. ?

Digital IDs enable carmakers and service providers to operate more efficiently, but the two demographics that most benefit from this integration are customers who can utilise in-car payments and insurers that can offer more usage-based insurance (UBI) premiums by leveraging the information from those digital profiles. Going forward, automakers that leverage digital IDs must continue prioritising data security to discourage hacking and keep systems that operate across different brands compatible. This would be much easier if the already used systems for digital identity could be integrated in the vehicle, but the variety of implementations on the vehicle side complicates this.?

Curious to know more about how digital IDs are impacting your industry? You can find more insights from our research expert, Oliver Jackson, here .

For more expert insights on how digital IDs are being navigated on the world stage, read our article by senior industry adviser David Marsh .