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Financial regulations 02 Mar 2018

Digital identity: Is blockchain the future?

Which technologies will mark the development and protection of our digital identity? It seems that biometry and blockchain could be the keys that will set the future of our identity in the web and will help protect us.

“The role of digital identity in the future is key in light of the fact that all economic and social activity will shift to the digital world. In addition, the possibility that companies and users can carry out transactions through the internet in a safe and non-fragmented way will be key to the development of the digital economy”, says Ana Isabel Segovia, economist in the area of Digital Regulation at BBVA Research. 

According to a recent report by BBVA Research, the implementation of blockchain technology in future identity management systems that allows the safe exchange of the data of users is to be expected. The following step will a distributed identity system (using perhaps DLT technology), where there is not a sole authority but rather a distribution among a multitude of actors of confidence.  Individuals will not need to depend on a controller, issuer or processor in order to comply with regulations and so obtain, copy, move, send and verify their data.

In this way, by decentralizing the process and giving control to the user, no institution could compromise the identity data of the user, according to IBM in a report on the management of digital identity using DLT technology and blockchain. This system will allow customers to use a digital token to verify his/her age to obtain, for example, alcoholic drink

International standards and biometry, the other keys

BBVA Research sees one of the trends marking our future digital identity will be the extension of schemes of national and identification and federal systems. In this line, Gemalto, in a report on trends related to digital identity points out that there are supranational bodies that have established digital identity rules as a priority.

La OECD rates this matter as a fundamental factor in the development of the digital economy. The UN and the World Bank have proposed assigning a secure identity to the whole of the global population in 2030. There are national programs along these lines such as in the case of the Indian government, which has launched an initiative to create a biometric identity card for its over 1.3 billion inhabitants, according to Financial Times.

The creation of unified and transversal standards within the same industry, for example, could be useful. In the case of the financial sector, banks could become managers of the digital identity of consumers. The banks are already taking note of this. For example, BBVA has launched Veridas along with the startup Das-Nano. This is a technological company that specializes in biometry that helps develop customer identification and authenticity systems that are securer and easier to use. Juan Losa, a senior executive at Veridas, believes that “a digital identity applicable to all industries is possible”.

BBVA Research expects one of the most used technologies will be biometrics. According to Goode Intelligence, by 2020 there will be at least 120 million customers using biometry on a daily basis on their devices for financial transactions. The break-through in artificial intelligence on the other hand will furnish more reliable authentication procedures to help fight against fraud. Devices will also change: mobile phones will be the most adequate platform for safe digital identity.

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