This week, at Innovate Finance, we heard from Chris Woolard, Executive Director of Strategy and Competition at the Financial Conduct Authority (FCA), that we have been accepted into the UK’s FCA sandbox and also progressed to stage one with the cross-border Global Financial Innovation Network (GFIN).
What does this mean and why is it a big deal?
Everything we do today, from renting a car , to opening a bank account or simply ordering groceries online involves proving our digital identity, and pretty soon, it will be self-checking into a hotel or ordering prescription drugs, even voting. Currently our identity and all our digital interactions are owned and controlled by other entities. With many parties involved, this puts our identity data at greater risk of being stolen by fraudsters.
4.5 billion records were breached in the first half of 2018 and consumer confidence in data protection is at an all time low. As a result, the old ways of verifying consumers using knowledge-based questions (for example, how much do you pay for your mortgage?) are no longer effective.
At Onfido, our mission is to create an open world where identity is the key to access. We want to help everyone easily prove their legal identity in a safe and secure way, so they can access any online service or product quickly and conveniently.
One of the ways this can be done is through portable identity. This is the ability to safely and securely ‘re-use’ verified identity across financial services and other organisations, so that consumers don’t need to be continuously be re-verified every time they want to access services. At the core of the proposition is that the customer has control over their identity from their smartphone, for example, and they permission its reuse across any service they want to access.
It’s unique, it minimizes privacy issues, and it spares the user having to go through the same digital identity origination multiple times, reducing friction and drop-off whilst turbo-charging the tech and FS ecosystems by promoting faster customer on-boarding which in turn promotes growth, access, choice and competition.
To be a success, this type of portable identity solution needs to be backed and recognized by multiple institutional and industry actors, and a regulatory framework to support it is critical. It’s this last part, the need for backing by multiple institutions and industry actors, where being accepted into the FCA sandbox and stage one of GFIN is a huge step forward.
The FCA is the UK financial services regulator, an organization that was set up to protect the financial markets and promote innovation in the interest of consumers - it’s widely acknowledged as one of the most progressive regulators world-wide. Its sandbox gives companies the opportunity to test innovative propositions in the market with real consumers and in the case of GFIN, across regulatory geographic borders.
Here are our partners and the different tests we are involved in:
Deloitte, Evernym, Onfido
● Decentralised digital identity platform, a machine learning enabled identity verification service, and a KYC solution, which banks and FinTechs can use to dynamically assess customer risk and configure according to their risk appetite
● Decentralised digital identity platform using machine learning identity verification and blockchain-based key management.
● Federated digital identity platform using machine learning based identity verification.
We believe that portable identity holds the promise of making life more convenient for customers, whilst enhancing their privacy and security. We’re excited to be working with the FCA and these partners to build the future of portable identity together.