Compliance revolution: Digital ID apps to Exceed 6.2 Billion By 2025 says research
It is high time that most online financial services companies and OTC derivatives firms that face retail customers begin to tool up and start to go down the digital ID route.
Compliance executives are in high demand at the moment.
Since 2017, contractors working within global financial centers have been able to charge a consultancy rate of £1200 per day, due to the scarcity of professionals who understand compliance and government guidelines, as well as the technological topography which now underpins the entire regulatory and compliance sector within both regulators and financial services companies, especially those which operate online.
The need to get the entire FX industry’s reporting and client onboarding technology up to standard has never been so high, and some brokerages are already adopting or developing their own biometric facial recognition systems for the purposes of onboarding new clients.
In terms of technological preparation, five years may appear an epoch, but it is far from it. Some research is now starting to show that the vast majority of the world’s adult population will be using digital ID applications for every area of online compliance and secure log ins by 2025.
A new study from Juniper Research has found that the number of digital identity apps in use will exceed 6.2 billion in 2025, from just over 1 billion in 2020. The research found that civic identity apps, where government-issued identities are held in an app, will account for almost 90% of digital identity apps installed globally in 2025; driven by the increasing use of civic identity in emerging markets and the lasting impact of the pandemic.
The report identified that the unprecedented shift to digital services during the pandemic across the world will stimulate rapid growth in civic identity; growing by 467% between 2020 and 2025, as robust onboarding and verification for digital services becomes vital.
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Civic Apps to Overtake Digital Identity Card Use in 2023
The new research, Digital Identity: Technology Evolution, Regulatory Landscape & Forecasts 2020-2025 Report, found that civic identity apps will overtake the number of digital identity cards in use in 2023, with the number of apps in use 41% higher than cards by 2025. While digital identity cards are still growing, the research shows that apps are much easier to scale, and better support increased involvement in digital commerce, which will be critical to digital identity’s future use.
Research co-author Nick Maynard explains: ‘Civic identity apps have come into their own as a way to boost digital financial participation, particularly in emerging economies. Post-pandemic, this capability will be crucial in enabling increased digital engagement.’
Blockchain Important to Securing Identity Networks
The research found that blockchain will be important to the future of digital identity, with blockchain-based third-party digital identity apps accounting for 16% of all installed third-party identity apps in 2025. However, this is not necessarily the much-lauded self-sovereign model, where numerous parties such as banks, identity providers and mobile network operators work together to provide identity as a part of a wider network. Blockchain will be an effective way to secure federated access to data; injecting trust and transparency.
Whilst it is possible that some form of distributed technology will be widespread when it comes to digital identity, all of the digital currency mouth-breathers can calm down right now.
Banks, along with consultancy firms such as PriceWaterhouseCoopers, have been developing their own separate blockchain systems for exactly this purpose since 2015, and pouring billions of R&D dollars into their production.
Use of such systems will have nothing to do with digital assets, and will be separate, and likely to be run and operated by banks and competent authorities.
It is therefore time that most online financial services companies and OTC derivatives firms that face retail customers begin to tool up and start to go down the digital ID route.