Digital Identity was a key topic at the recent Fintech Week London event, with half a day’s programme dedicated to discussing the topic. Giving the opening keynote, Matt Warman MP, Minister for Digital Infrastructure, UK, spoke of the UK’s Digital Identity Framework and the role digital identity has to play within fintech.
Warman kicked off his speech by outlining what his department is doing to realise the potential, stating that “The combination offers huge opportunities for the two worlds to come together in a way that is really profitable for both sides.”
He began stating that, in its purest terms, a digital identity gives individuals and organisations more choice about how they prove things about themselves, whether that be their age, address or other valuable data, as well as being a powerful tool for fighting fraud.
“Digital ID also gives the potential for businesses to enhance their customers’ experience as well. As we see more and more business carried out online, digital identity products are going to become a really vital building block for the economy of the future, and it’s estimated that widespread use of digital identity products across the UK economy could be worth some 800 million points, supporting businesses to ‘build back better’ and unlocking those efficiency savings, facilitating more secure transactions preventing that fraud.
“It’s a really valuable investment.”
Kalifa Fintech Review
In order to better understand the requirements of digital identification infrastructure, Warman explained how he spoke to Ron Kalifa OBE, author of the recent Kalifa Fintech Review. In this, Kalifa outlined the UK’s position as a fintech world leader, as well as describing how digital identities are a key infrastructural requirement for fintech companies.
“I think it’s clear that digital identities will enable smoother, cheaper, more secure online transactions that will in turn, simplify people’s lives and boost business confidence, particularly in fintech,” said Warman.
He then gave the example of the strict requirements in the financial sector for identity verification, particularly when it comes to onboarding new customers or authenticating transactions. He said digital identities will allow these checks to be far more efficient for businesses and customers, as well as to prevent fraud.
“The work that DCMS (Department for Culture, Media and Sport) is doing to unlock the power of data for the fintech sector via digital identity is really powerful for that sector, and also looking way beyond.”
Moving on to what the government is doing in response to digital ID, Warman outlined that they are committed to “setting the rules of the road for digital identity while leaving as much space as they possibly can for the innovative drive of the market to develop new services that will meet the needs of consumers from all walks of life.
“I believe the thing that will ultimately sell digital identity to the public is compelling products.”
In February, the department published the UK digital identity and attributes trust framework in alpha, in an uncommon move for the government, with the mark one of the frameworks aimed at helping organisations check identities and share attributes in a trusted and consistent way.
“The department has had regular engagement with over 200 stakeholders, including many representatives of the fintech sector, and will soon be publishing the second iteration of that trust framework. The update will take into account the feedback and also include much more detail on certification and on liability. I’ve been really pleased to hear from many stakeholders that they’ve already appreciated the collaborative approach that we’ve taken so far, and we will continue to be that collaborative, if not more so, especially as we look towards the next states of testing that framework to make sure it works effectively for those who are going to use it. Ultimately that’s what this is all about.”
Collaboration is key
After delivering his speech, Warman sat down with The Fintech Times to reiterate his message and advised that they will also be publishing a formal public consultation, covering legislative proposals, with the aim to boost the use of digital identities and enable them to be built on a far greater range of authoritative datasets, faster and more securely.
“This consultation will also include proposals for a governing body to own and manage the trust framework, ensuring that the right protections are in place for consumers and businesses, as well as enabling organisations to prove that they meet the relevant requirements. This will also provide reassurance to the public that it is properly regulated, as we envisage that the new governing body will have a flexible oversight that will allow the market to grow while providing essential protections for consumers.
“I’m really looking forward to working with you all on this consultation, because the engagement with fintech and other stakeholders is absolutely at the heart of developing policies that work for business, for fintech and the broader public as a whole.”
Finally, he concluded: “The government can’t do this on its own, we’ve got to work together and being genuinely collaborative is so important.
“I hope you will continue to support, to listen and to challenge us as we drive forward our delivery and make our collective ambition to bolster fintech across the economy a genuine reality.”