This blog summarises some of the points covered in our webinar: Covid-19 stimulus package—preventing fraud and implementing solutions. To hear more, view the full recording.
At the end of March, a $2 trillion coronavirus stimulus relief bill was signed into law. It’s the largest aid package in US history and aims to grant to households and small businesses economic relief during the coronavirus pandemic.
The rollout of the package will undoubtedly provide much-needed support for many US citizens, but it also raises some interesting considerations regarding the state of identity in US, including:
How do you go about getting $2 trillion out the door?
How do you make sure that the people who are meant to be receiving the money, receive it?
How do you validate the identities of the citizens and small businesses that need the money?
How do you ensure the money doesn’t go to fraudsters who are trying to take advantage of it?
Answering these questions isn’t as simple as it sounds. Why? Because the government wants to ensure that relief is provided as quickly as possible. But with the current set up, there’s likely to be a compromise between speed and security.
What’s the current identity situation?
To get the money to those who need it, the US government has to have the following information: a name, an address (to know where to send a check), or a registered bank account (to send a deposit).
Getting this information relies on the IRS. So if you filed taxes in 2018 or 2019—and you’re eligible to receive support—they’ll send the money to the account registered (of course, this automatically assumes you’re a real person). But what if you didn’t file taxes in 2019, and you moved house or switched banks? Already we’re running into logistical problems.
And what if you don’t file taxes at all? The current solution is for people to submit their name, email address, date of birth, social security number, bank account details (if have one) and driving license details (again, if have one). A lot of this information is in the public domain, and easily obtained by fraudsters. We’re already seeing an increase in coronavirus related phishing attacks.
So this is where we’ll see a trade-off. To get the money to those who need it, quickly, we have to accept that some of it might end up in the hands of the fraudsters.
How could Covid-19 impact identity in the long term?
The US doesn’t currently have a robust identity structure in place. We may be in the 21st century, but the current system relies on 20th-century technology. It hasn’t kept up with the changes that have happened in the last decade.
The Covid-19 crisis has highlighted how much of a problem this is. The crisis hasn’t broken the financial system, but has pointed out the areas where it’s not working. There are technologies in place to solve the identity problem, they just haven’t been put in place yet at a national level.
In reality, the identity problem can’t be solved in the space of a few weeks. But there is an opportunity to address critical issues in the aftermath of the crisis, and addressing digital ID is a critical step to take as part of that.
Realistically, the US government won’t be able to solve the problem on their own. They will need to work together with other businesses who are at the forefront of the identity space. The best solution will involve collaboration between the private sector (who already have good solutions in place) and the government (who have the means to implement a solution on a national level).
What could the identity solution look like?
The fact that the US government can’t currently digitally ID someone is one of the primary reasons small businesses are struggling to get stimulus relief. But the benefits of solving this problem would be felt in the long term.
A portable credential or identity infrastructure would help solve many of the digital identity problems. If I’ve already been KYC’d or had your identity verified by one bank, why can’t that be used in other ways?
Every point in our lives where we go through this process results in a duplicated effort. It creates a bad customer experience and it tracks data in silos. The way we can solve this problem is to have a system in place that shares a validated identity, while simultaneously maintaining privacy. It would give individuals simple control over their identity, improve customer experience and reduce fraud.