Getting digital identity right is key to a properly functioning digital economy. At UBS we believe that banks have the capability to help define solutions that are secure, interoperable, scalable and inclusive, by harnessing the potential of biometrics, geo-spatial applications, blockchain and AI. What these solutions will look like, however, is very much in the open. We do not see them arriving as a "big bang"; but rather through an iterative and collaborative process, involving a wide range of stakeholders.
This was the rationale of the first in a series of UBS Future of Finance Forums, held on 6 September 2016 in London, which brought together experts from the financial industry, fintechs, academia and the regulators to discuss topics such as security and regulation, globalization and interoperability, client and consumer issues, and privacy and anonymity. Our white paper is the result of the discussions at the Forum and UBS's continuing work on the subject. Read on for a brief introduction to the topic, or dive-in deep by downloading the white paper from the link at the right.
The Internet ushered in a revolution in communications. With it we could instantly share information, and most of anything else that could be digitized, with almost anyone in the world. The result was an explosion in productivity and interconnectedness.
But while the Internet supports sharing information, it is less capable of verifying the source and validity of the data. This has led to all kinds of problems, from fraud to phishing to phony news. The lack of an authentication layer, while convenient, also means the Internet is not a particularly secure channel for transactions.
This might seem surprising in an age when e-commerce is booming. The truth is, when we use our browsers to buy something online, we are only sending information - our name, credit card number, etc. That information still needs to be verified and processed in the old ways; e-transactions are not truly online.
If we want to have a fully digital economy, we will need to have truly digital identities. As a bank we know this all too well. Identity has been a core part of our business since the beginning. Today we are, we think, rather good at verifying, safeguarding and using identities in the analog world. The great challenge now is to do this digitally and seamlessly.
Our world is digitalizing at a fast pace, and we can begin to see the outlines of what a fully digital economy might look like. But we see many hurdles too. Part of the problem is that we still rely to a great extent on the analog world - as when asked to produce a physical passport or birth certificate to open a bank account. Our identities are also complex. From our name, address and date of birth to our preferences in clothing and circle of friends, all the information about us can be used in one way or another to identify us. There are also serious problems in the way identity is currently handled in the digital realm, from lack of security of our data to lack of control over it.
Such problems are understandable in a period of transition like ours. And as identity will play such a key role in our digital future, we can expect a great deal of resources to go into solving them. We see already that digital identity is a hot topic among governments and regulators, banks and tech companies, NGOs and academics. And there are projects underway all over the world to build better digital identity solutions. We expect these efforts to intensify.
In our view, these developments will slowly but surely lead to a broad - based, regional and perhaps global digital identity platform. We can picture this as a base layer for securely collecting, verifying and sharing identity that is as unobtrusive, yet as powerful, as the communications layer that underpins the Internet itself.
What such a platform will ultimately look like is very much in the open. In the white paper we take you on a journey through this digital evolution - and so explore its possible futures and what they might mean for us as banks, for our clients, and for the world at large.