Digital IDs could soon banish the need to appear in bank branches to open accounts and put an end to the use of passwords.
British biometrics company Onfido has developed a “portable identity” along with Deloitte and US-based Evernym that can dramatically increase the speed at which new customers can sign up and log into accounts.
The ID was tested as part of the Financial Conduct Authority’s (FCA) regulatory sandbox pilot, a State-run initiative that allows companies to test new ideas for the financial services industry in a controlled environment.
Onfido’s identities are created by taking a photo of an official Government document and a selfie.
The company claims it will have wide-reaching implications and will eventually act as a proof of identity in the same way a passport does currently.
“Fifty years ago we went to the moon, and still it’s hard to show this device that it’s me,” Onfido chief executive Husayn Kassai said.
“Passwords are a very old text-based protocol with many limitations. It’s easy to cheat and then you have to reset it and when you do you have to identify nine photos with a bus in it.”
The initial trial of the IDs was supervised by the FCA and was conducted on 100 testers who were able to safely sign up for a handful of services including equity crowdfunding platform Seedrs, and fintechs Monese and Kroo.
Onfido claims the IDs will eventually be used beyond financial services and will be used for “things like renting a car, self-checking into a hotel, and one day even voting”.
The company deliberately tested the IDs in the financial services industry as it was “one of the most-highly regulated sectors” in the UK.
Portable IDs will also reduce the onus on companies to hold personal information like usernames and passwords, meaning users will face a lower risk of a data breach.Technology Intelligence newsletter – UK
Following on from the testing, Onfido now intends to develop a production-ready solution for the UK market.
Deloitte partner Derek Ryan said the trials have proven the “practical applications” of digital identities.
“We believe that the emergence of a portable digital identity provides a unique opportunity to build an open and scalable ecosystem which can help improve customer experience and protection, solve an institution’s onboarding challenges, and also create new and scalable business models.”
US research company Gartner has tipped digital identities to surge in prominence over the coming years. It estimated that by 2023, a quarter of all digital providers will operate a “bring your own identity” system. Gartner said the industry will bloat from a $50m industry to a multi-billion dollar industry.
In April, Onfido raised $100m in a round that was led by TPG Growth, the company that has backed big tech businesses like Uber and Airbnb.
The company is also in discussions with the Government to potentially develop immunity passports to help curtail the spread of the coronavirus.