Improvement of Digital Identity is Key for the Growth of Digital Wallets

July 5, 2023

Continuing the topic on the use of biometrics in payments, today we are touching on digital identity.

According to a report from Curity, where 200 IT decision makers and 1,000 consumers based in the UK and US were surveyed, titled “Plotting the Roadmap for Digital Identity”, UK consumers and organizations are ready to “embrace a new era of digital identity.” … but what exactly entails a digital identity?

The term digital identity is not new by any means, and it refers to several different concepts, but for the purpose of the report, digital identity entails the following:

The definition for this report is that digital identity is information used by computers to verify and allow access to online services by a person, organizations, applications or devices.

In this day and age, when digital evolution and transformation is constant, it is a priority for digital identities to be secure. For this reason, passwords and usernames will be left behind as we enter the era of biometric authentication and passkeys. Pieces of information will no longer be enough for a hacker or scammer to gain access to a legitimate customer’s accounts.

From the Report

63% of UK organisations either currently use digital identity or have plans to incorporate digital identity solutions into their operations, with 61% of those planning to do so within the next year. Additionally, 52% of UK firms have plans to incorporate new and emerging identity solutions. UK consumers are also displaying a growing familiarity with digital wallets, with 58% of consumers currently using them and half of consumers that don’t currently use digital wallets considering them in the future.

In addition, 60% of the surveyed organizations think identity will have a “transformative impact on their industry,” and the industries thought to benefit the most from innovation will be financial services at 89%, followed by health services at 86%.
The most popular services used by consumers who possess a digital wallet are finance at 62%, retail at 61%, and travel at 46%.

Trust

The institutions that are the most trusted by consumers when it comes to storing personal data are financial institutions (38%), and medical providers (35%) In contrast, the least trusted institutes are the government at 22% and transport providers at 17%.

Key findings

Among UK consumers that currently use digital wallets, 77% use it weekly and 30% use it daily 60% of consumers in the UK & US highlighted data privacy risks and fraud as reasons they would be hesitant to store personally identifiable information in a digital wallet. Top security challenges posed by digital ID for IT decision makers are hacker sophistication (39%) and lack of appropriate infrastructure (37%).

According to Curity CEO, Travis Spencer, increasing the pressure to innovate and develop ways to protect customer’s data in this digital era is imperative. He added that there are”encouraging signs” that businesses are ready for the shift, and that the institutions that will survive and come out on top after the move will be those who can cultivate the most trust.

The question of how digital identities are managed and by who will continue to be a key question over the coming years. To keep up with this pace of change and consumer expectations, digital identity must be on the priority list of enterprise architects and strategy makers.

Want to learn more? Check out Payments Cards and Mobile’s full write-up  here.

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