At least one email account. Various user profiles on platforms such as LinkedIn, Facebook and online newspapers. Our digital identities can be numerous. We also have a 'digital existence' that is created through data being made available about us on the web. You may have been tagged or mentioned in an article, or your name might appear on a company web page, for instance.
Digital identity not only provides information such as in a passport. It also holds profiling information such as 'likes pictures of cats', 'is male/female' or 'drinks wine'; and entitlement information such as 'permitted to drive a car'. Potential clients, headhunters or institutions can check our online profiles. Our digital identity can even be stolen. In short, our online profile is worth maintaining and protecting.
Towards a flawless, secure digital execution
The current main issue is that today's solutions sometimes struggle to give us the security, control, and ease of use we expect. Digital execution must protect all parties in the 'value web', which involves entities establishing 'smart contracts' that build on 'blockchain' technology. For example, your car leasing contract is connected to your car on the internet, and payment happens automatically via blockchain. From a provider's perspective, a profile’s attributes are worth money, as they enable personalized micro-targeting.
So what’s the issue?
Self-sovereign versus organizational governance will be the ultimate question about who owns and controls our digital identities based on a sound legal framework. As such, we are seeing the rise of new identity providers, brokers, evaluators, insurances and safeguards.
There may be significant challenges in terms of acceptance, such as if solutions are counterintuitive or expensive. This poses the risk that consumers choose simplicity over security and safety, which could harm identity over time.
Verifying and safeguarding identity has always been a core part of banking. Banks have the experience, expertise and infrastructure to help shape an open, cost-effective and accessible future platform for digital identity. The solution will not arrive in one big bang. It will be an iterative process to find solutions that meet growing calls for online privacy and anonymity, and greater ease in sharing identity attributes when desired.
Relevance to financial intermediaries
This topic will gain importance over the coming years. As we all produce raw material online, it's crucial to understand what might be done with it in the future to avoid undesirable results for you and your clients.
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Matthias Plattner is Head Technology & Processes at UBS Global Financial Intermediaries. If you have any questions about this topic, please email him by clicking on the link below.