Yesterday, Onfido, Deloitte, and Evernym announced the successful completion of a blockchain digital identity pilot in the UK Financial Conduct Authority’s (FCA) regulatory sandbox. The trial was run to study the use of self-sovereign identity in customer onboarding and to reduce compliance costs for financial institutions.
Onfido provides identity verification services, while Deloitte joined to provide its Know Your Customer (KYC) expertise. Evernym is the company that founded Sovrin, the self-sovereign identity network. The trio was accepted into the FCA regulatory sandbox last year.
The World Economic Forum (WEF) estimates that an average consumer manages over 191 pairs of usernames and passwords. This makes it difficult to control access to different services and burdens organizations with verifying credentials for every new customer.
The piloting firms explored the use of reusable identity or self-sovereign identity, which could be stored on the customer’s phone. A provider issues the verifiable digital credentials by verifying other relevant information. That could be a passport, a drivers license, or something else. So, when a financial institution requests information, the individual could accept or reject requests to share data from their phone.
In the FCA sandbox, the customers were able to access financial products using digital credentials. More than half used the same credentials to sign up for multiple services. Meanwhile, a majority of the users participating in the pilot stated they would recommend the solution to others.
“This pilot was instrumental in proving that portable identity significantly improves both consumer experience and protection, while accelerating customer onboarding and reducing KYC and compliance-related costs for financial institutions,” said Husayn Kassai, CEO and Co-founder of Onfido.
Building upon this success, the pilot participants now plan to use digital identity for other services such as renting a car or self-checking into a hotel. In the meantime, they plan to launch a production-ready version in the UK.
“Decentralized identity is making a debut in 2021, and will disrupt traditional methods of access for many providers, as it will be used for 25% of all bring your own identity (BYOI) logins by 2023,” says research firm Gartner.
Last year, Onfido and PwC partnered with uPort to use digital identity for UK financial services. uPort was also accepted into the FCA regulatory sandbox.
There are numerous decentralized identity projects globally. The ID2020 Alliance is another big name alongside the Sovrin network.
Last month, the Linux Foundation launched the Trust over IP (ToIP) Foundation. Evernym is a steering committee member.
Meanwhile, digital identity solutions are also being explored to fight COVID-19. Evernym and 60-plus other organizations have formed the COVID Credentials Initiative (CCI).