Blog: Is Digital ID secure? The answer is a resounding yes.
By Harry Weber-Brown, CEO at TISA Digital
Storing and sharing personal information online can be daunting for many. Large-scale data breaches are frequently headline news. New scams seem to emerge every day that can outsmart even the most technologically-savvy.
If you’re worried about privacy and security of these new apps and services, you’re certainly not alone. Our Open Finance report[1] found that the main barriers to the adoption of new technologies by consumers are fear of miss-selling and/ or unauthorised access to data. Yet 94% of consumers also reported that they would use a dashboard app, which shares data form multiple sources, if security was guaranteed by a trusted financial institution.
Based on our research findings, the factors that act as barriers to consumers trusting these digital services can be tackled through providing a reusable Digital ID which increases the safety and security of digital access to financial services.
“But fraudsters always appear one step ahead. Is using a Digital ID not just inviting trouble?” you may ask.
The answer is no, and here’s why.
Digital Identities were approved for use in anti-money laundering ID checks in 2019. The parameters for a scheme that enables firms to use a digital identity that meets all the necessary Know-Your-Customer (KYC) and anti-money laundering (AML) checks required by UK and EU regulators and government standards are established and clear.
The financial services industry knows how to do build and deliver secure services. Working with a range of financial services and the identity providers, TISA is building and piloting a trusted, safe and secure system for financial services – ID Connect.
TISA completed a highly successful proof-of-concept phase of ID Connect, a Digital ID programme, in July 2021, supported by a Government grant to assess the viability of its system.
In our proof-of-concept phase, participants tested real-life user journeys, including setting up a digital identity to open a new account. 84% of participants were successful in utilizing a Digital ID to open a new account, demonstrating how the Digital Identity System would improve the onboarding rates for financial services, reduce AML costs and provide a streamlined customer experience overall. Our proof-of-concept demonstrated that customers understand the concept of using a Digital ID and that they understand the safety and security features.
TISA is now busy building a marketplace for financial services and identity providers to share and reuse identity information, subject to the consumers request. This marketplace is underpinned by a Digital Identity scheme that allows consumers to register, store and reuse an identity to interact with financial institutions. This can then be used when applying for financial products and services, such as opening a new bank account, transferring a pension or applying for a mortgage.
The ID Connect marketplace enables firms to have a single contract and use a common technical infrastructure so they can trade with any other firm in the marketplace. The underpinning scheme sets legal, operational and technical rules to ensure digital ID providers meet their requirements in line with the Government’s policy and framework for use of Digital Identities.
The Government and the Financial Services regulator (FCA) want individual, retail accounts to be as secure as can be. And how did the Government decide to do it? By supporting industry efforts to introduce a safe, secure Digital ID scheme.
Through Digital ID, financial services providers will be able to easily verify and then authenticate a customer’s Digital Identity. Fraudsters exploit the weaknesses of new systems, so the ID Scheme technical approach has recently had a thorough cyber-security assessment to remove opportunities for fraudsters to access the scheme and will continue to be checked regularly. Through the adoption of secure Digital ID, we have the opportunity to make sure consumers and the industry are safeguarded against those seeking to commit fraud and theft.
Digital ID is safe, secure and convenient. It’s a technology you can trust.
If you have any questions about Digital ID and its security, get in touch with harry.weber-brown@tisa.com
Read more on Open Finance and find the full report here: https://www.tisa.uk.com/open-finance-report/
For media enquiries:
Kuba Stawiski
H/Advisors Cicero
07856031906
kuba.stawiski@h-advisors.global
Notes for Editors
The report [https://www.tisa.uk.com/open-finance-report/] from TISA and EY, conducted in early 2022, included a detailed survey of publications on Open Finance and qualitative research through structured interviews, as well as a survey with TISA members. The study’s findings are bolstered by primary research carried out by TISA’s Open Savings, Investments & Pensions (OSIP) programme.
Open Banking makes use of open APIs that enable third-party developers to build applications and services around the financial institution. Greater financial transparency options for account holders ranging from open data to private data. Open banking is enabling a world of innovative apps and services tailored to users’ financial data.
Open Savings, Investments & Pensions (OSIP) is a TISA initiative to create a set of API standards for savings, investment and pensions products. OSIP builds on Open Banking which enables consumers to share their current account data with third parties to access new products and services.
OSIP builds on the principles of Open Banking. TISA’s work with Open Savings, Investments and Pensions (OSIP) has thus far proved a successful testament to this, with a number of leading financial services providers joining to be involved in the sandbox testing phase.
The Investing and Saving Alliance’s (TISA) ambition is to improve the financial wellbeing of all UK consumers by working collectively with the financial services industry to deliver solutions and champion innovation, for the benefit of people, our industry, and the nation.
[1] Open Finance Report by EY and TISA