Decentralized digital identity is market-ready after FCA sandbox pilot

Onfido, Deloitte and Evernym announced the positive results of their Financial Conduct Authority (FCA) regulatory sandbox pilot, confirming that their reusable digital identity solution has been proven with market participants. Testing began in February 2019, shortly after these firms were accepted into the UK’s FCA Regulatory Sandbox to evaluate how reusable or “portable” identity can improve customer onboarding journeys and reduce compliance costs for financial institutions.

Portable identity enables people to safely and securely re-use their verified identity across financial services and other organizations so that they don’t need to be re-verified every time they want to access new services. End-users have control over their identity from their smartphone, being able to provision its reuse across any service they want to access. Such a system means businesses no longer have to choose between security and customer experience, can reduce compliance costs, and are able to respond quickly to changing regulation.

The solution brings the digital world something that already exists in the physical world: a way for individuals to hold and control a proof of identity that they can show to anyone, anywhere. The key aspects of the model are: credential providers are able to verify any relevant information about an individual or organization and issue digitally verifiable credentials to that person; People hold multiple digital credentials on their phone and accept or reject requests to share information with institutions (we call these Relying Parties); Relying Parties request information from the consumer and receive digital credentials.

Piloting portable identity in the financial services industry, one of the most highly regulated industries in the UK, provided some of the toughest conditions and a high bar for testing a decentralised identity ecosystem. Its success therefore marked the next step in the journey to creating an open world where identity becomes the key to accessing online services.

To prove the practical application and business relevance of digital identity, the pilot looked to validate market appetite from end-users and service providers and prove out the technology in a regulatory framework. In total, testers successfully opened financial products using their digital credentials. More than half went on to reuse their digital credentials to sign up for multiple live services. Of those that participated in focus panels, the majority stated they would recommend the solution to a friend.

The participants were also encouraged by being able to hold, manage and control their own data which reduced the risk of their data being breached, since it was encrypted in distributed locations.

In terms of regulatory acceptance, updates to the UK’s Money Laundering Regulations that came into force on 10th January 2020, should allow the use of electronic identification of customers – this will help pave the way for the next phase of this portable identity pilot, a production-ready solution for the UK market.

Read the full release

Related Posts

Previous Post
ISDA and aosphere Launch E-contracts Service
Next Post
NY and French regulators sign fintech agreement

Related Posts

Fill out this field
Fill out this field
Please enter a valid email address.

Menu
X

Reset password

Create an account