Ed Vaizey: We need digital identity fit for the digital age
It’s time to ditch physical forms of ID for electronic versions – digital identity presents an effective, cost-saving alternative that would aid the smooth running of our economy and society, says Ed Vaizey
If you want to set up a bank account, you still often must go to a branch. For bars and nightclubs, you prove your age with a driving licence or passport. For the right to rent and right to work, vast teams of screeners review copies of documents and meet applicants face-to-face. There are 21 categories of goods and services which require age verification, of which only one in England has a specific method mandated.
Across sectors, how we prove our identity is outdated – a reliance on manual methods in a digital age. It is costly, inefficient and the impact is palpable.
The Office for National Statistics estimates that fraud and cybercrime now add up to almost six million offences annually – accounting for nearly half of all crime. Fraud now costs the UK economy as much as £193bn per year and this is compounded by a dramatic rise in identity theft – up 57% in 2016 on the year previous, according to the fraud prevention service Cifas. Almost 1m driving licences were also lost or stolen in the UK last year – many in the night-time economy. Investing in digital identity would go a long way towards addressing these issues.
The economic benefits are also significant. The Open Identity Exchange (OIX) – of which the Cabinet Office is a member – forecasts that digital identity based on open standards could result in fraud savings of between £5bn and £10bn. Further, adoption has a potential value of £58bn to the UK economy and the cost of not acting will likely far outweigh the cost of developing solutions.
So, if the need is so apparent, why is it so difficult to get right? Well, as I have discovered since forming the All-Party Parliamentary Group for Digital Identity, there are a multitude of hurdles.
There is no one authority for identity verification. A whole host of government departments are involved – the Home Office, the Department for Digital, Culture, Media and Sport, the police and many more. Identity verification also spans an array of both regulated and non-regulated areas. Plus, there is the issue of inclusivity. Around one in five UK residents have no form of root ID document – namely a passport or driving licence – and forcing identity upon people has historically been a divisive topic.
But it’s not all doom and gloom. The government has ambitious plans for its Verify system – aiming to have 25 million users of this form of digital ID by 2020; with the need for private sector cooperation now fully acknowledged. However, uptake has been slow and concerns remain about how the system will comply with EU requirements.
That said, we are the first to launch a Digital Economy Act and there is encouraging work taking place between organisations. The UK can boast industry-created Publicly Available Specifications for Age Checking (1296) and Digital Identification & Authentication (496) which are being reviewed by governments and companies around the world. It’s a step in the right direction, but we must do more – and swiftly.
There are examples around the world where effective moves are being made, too. In Estonia, their e-Residency scheme allows foreigners to apply for digital residency without the need to even live there. In the US, several states are testing the storage of driving licences on smartphones. In Australia, “cloud passports” are being trialled which will store a traveller’s personal information online and eliminate the need to carry a physical passport.
If the UK is to retain its spot at the head of the digital table, we need digital identity fit for the digital age. In an increasingly globalised world, it is surely key that we work on global digital identity solutions, too. Giving individuals the means to travel, bank and trade across the world and ultimately prove who they are, wherever they are.
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