Universal Digital Identity: is SSI the Answer?
Can you imagine one day waking up to a fully digitalized world? It may be unimaginable but not that objectionable.
On the other hand, can you imagine living through a pandemic like COVID-19 during the pre-Internet and pre-tech savvy era?
Even fleetingly envisioning this will make you realize how lucky you are to be living in the age of advanced telecommunication technologies reigned by electronic document flow, digital signatures and online meetings.
In order to be prepared fully for the imminent digital world, the financial sector must ensure that it is being proactive, not only reactive. Most notably, the sector must warrant that its customer onboarding and compliance processes are fully digitalized in order to expedite clients’ take on in accordance with strict regulatory KYC and AML requirements, with international remit and without leaving the digital domain.
A seamless and compliant solution to this effect in any financial company is only possible if a reliable (and universally recognized) digital identity system is in place.
Perhaps such a solution already exists?!
Self-Sovereign Identity (SSI) technology ingeniously combines technologies such as smartphones, public key infrastructure, distributed ledger and personal cloud computing. Based on Decentralized Identifiers (DIDs) and Verified Credentials standards developed by the World Wide Web Consortium, SSI enables individuals, according to expert Kaliya Young, to “get credentials from an issuer, like a government, and present them to a verifier, like a bank, without technical federation”.
As per the “Blockchain and Digital Identity’ Report by the European Union Blockchain Observatory and Forum, “In a SSI approach, the user has both a means of generating and controlling unique identifiers as well as some facility to store identity data. This could be verifiable credentials as described above. But it could also be data from a social media account, a history of transactions on an e-commerce site, or attestations from friends or colleagues”.
While the lack of regulatory framework still impedes SSI’s market adoption, especially in the financial sector, active interest in the development of such technology on behalf of both the EU and North American government agencies as well as the ongoing global disruption cogitates that the SSI is worthy of attention and has a promising future.