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Digital Identity: a new strategic business imperative

Split Tech City

Split Tech City


Since the pandemic, there is no denying that the importance of our digital lives has grown, and that data is an even more valuable asset in the digital world.

More precisely, digital identity, an ever-evolving and notoriously challenging concept, is quietly catalyzing the next generation of technology disruption.

With the EU enforcing a new digital identity mandate under eIDAS 2.0 starting this September for all its member states, new doors of opportunities and challenges are opening for organizations of all sizes.

Digital Identity: definition and usages

A digital identity is a reusable digital proof of identity issued by a trusted authority with a known level of assurance.

Attributes contain information about a subject. This can include details such as the legal name or date of birth as well as details from other organizations such as professional qualifications, bank balance, or medical history.

Alike some wallets operated by big tech companies, the new mandate will establish a secure European digital wallet that will share standard features and be interoperable across the EU.

It will perform a similar role for a variety of different schemes not only ID but credentials such as driving licenses, health records, and digital travel documents.

Thus, The European Digital Identity could be used for:

  • requesting birth certificates and medical certificates
  • reporting a change of address in public services
  • opening a bank account
  • filing tax returns
  • applying to a university in one’s country or in another EU Member State
  • storing a medical prescription that can be used anywhere in Europe
  • proving information like age
  • renting a car
  • checking in to a hotel
A work in progress

Two categories of identity can be found. The first one is called core identity, created for general purposes like a national ID or a legal name. The second one is functional identity, created to convey certain characteristics or data about something particular, for instance, internet cookies that track a user’s online behavior.

Nevertheless, the internet was not built with core identity in mind but is rather reliant on leveraging functional data like e-mail addresses or social media logins to access services or identify people across the web.

With time, such a structure came with many cybersecurity problems and fractured experiences.

Therefore, the need for a strong core identity architecture that can be relied on is attracting significant attention. Already, new digital identity solutions are starting to emerge.

Some use decentralized solutions, leverage tokenization, challenge mobile-native biometrics, and integrate AI as well as other emerging technologies.

From governments to companies

The pandemic has demonstrated the need for governments to digitalize their services even more clearly. In doing so, they can simultaneously improve convenience, security, and efficiency.

This setup would also allow citizens to identify and authenticate themselves online without having to resort to commercial providers, as is the case today. A secure digital wallet would open the door to a new era of easier and more secure service access.

Enterprises will be able to enhance the user experience while reducing bureaucracy and overheads.

However, while more consumers will have their personal data covered under privacy regulations, companies will find themselves challenged with shifting access to consumer data and a need to integrate new technologies.

The digital identity solutions market is expected to grow from $27.9 billion in 2022 to $70.7 billion by 2027. While new emergent technologies are starting to alleviate digital identity’s past flaws, they will also challenge businesses.

That’s why, it is crucial that their leaders understand the inflection point digital identity is in right now.

Anticipating and preparing for the big change will give them an advantage for the future and allow them to participate in the creation of a better, safer web.

The article was written by: Tamara Habensus


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Split Tech City

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