Establishing a trust factor is vital to cross-border economics and digital identity, but the roadmap is far from clear.
There are billions of individuals online, trillions of dollars in commerce exchanged digitally, and a myriad of approaches to online verification. In terms of authentication, should there be government mandates, private sector ingenuity, or a combination of both?
In an interview with Karen Webster, Trulioo General Manager Zac Cohen took a multi-market look at government and thematic approaches to setting (and settling on) ID infrastructures.
China represents what he termed a “world of its own,” marked by mature and advanced technology unseen anywhere else in the world.
“They leapfrogged all the traditional mechanisms and went straight to mobile adoption and biometrics, and that has a significant impact on how the digital identity market operates there, how people respond to it, and what their expectations are,” Cohen told Webster.
The mobile-first and biometric mindset is pervasive enough so that, for example, as Cohen noted, banks have automated procedures in place — even in the branch setting — that tie in to facial and voice recognition (and where digital IDs and payments are closely interrelated).
Beyond the technological advances, of course, China’s push toward a digital economy comes as the government has also digitalized the national ID card, which must be wielded by every citizen over the age of 16. The most recently-issued cards feature encryption and chips, containing personal information spanning gender, address and ethnicity. Those cards are used for everything from transactions to getting tickets on mass transit.
Cohen noted that China holds a unique place in the digital ID realm, one where government scrutiny is pervasive, and where citizens seem to demonstrate a relatively high degree of comfort with such scrutiny.
It remains to be seen how such oversight might carry over, or not, into other markets. But as Cohen noted, China spurs “a powerful realization of what’s possible when you marry such intricate aspects of your life — like your ID and the most frequent interaction that most digital economy users have online — which is ‘How do I pay for something and how do I pay my bills?’”
That aforementioned replication of trust — in devices, in technology, in the government — is less in evidence depending on where you look, said the executive.
National efforts to issue digital IDs to everyone may be hallmarks of China and India. But looking globally, a fragmented landscape frames the debate.
Simply put, some regions and countries are not ready for such comprehensive collection, storage or use of personal data.
Choice matters, Cohen said, and the most important questions surrounding digital identity center on “how do we enable choice in digital identity, and how do we balance important issues like financial inclusion … against emerging principles of privacy and data security.” Across Europe, North America and elsewhere, there have been at least some government mandates about how data is handled. (Europe’s General Data Protection Regulation springs to mind.)
The Big Tech Effect
In areas less marked by government edict, Cohen took note of an “opposite effect” in which the private sector (buoyed in part by 5G cellular network technology) has stepped in to help shape how consumers and customers are identified and how they transact — and, of course, how their data is used.
“It becomes an interesting challenge for governments to control for this scenario,” as data and payments and, of course, personal information cross borders. Facebook may be the marquee name of the moment, with the recent news that it intends to help bring a new cryptocurrency to market (that would be Libra, of course), but has seen regulators voice concerns from the U.S., the continent and beyond.
“I think that what we’re going to see, like we’ve seen in the past many times with all innovative technology, is that it’s going to leap forward by bounds, and then there will be some catch-up that occurs from a governmental or regulatory side of things,” Cohen said of Libra.
What’s new this time around is that with the proliferation of cross-border interactions and concerns about cross-border flows, there may be more cooperation and coordination among governments, he told Webster. Hundreds of governments have made revisions to, or are in the process of revising, legislation around data privacy and protection.
And, as Cohen noted with a nod toward 5G and apps, “these are services and tools that individuals want access to, and in many of these countries, these are the individuals that are electing governments. You can have consumers push policy and push demand, and then the other side of the reality is that governments realize what’s happening and are forced to take some type of action.”
Asked for a policy prescription — a mindset that could move toward utopian balance between digital IDs, governance and consumer choice — Cohen contended that amid an alignment of regional areas, there should be “some ultimate trust layer online, regardless of which service you choose to interact with.”
“There is a baseline of trust, and I think that’s where you can get some very positive traction from the regulatory government, or just standard principles that everyone agrees to about how we handle and use information,” he said. “You are at the mercy, to a certain extent, of your local jurisdiction.”