Part 3: Building the future
So… Digital identity verification and remote access to essential services has evolved massively in the past decade. Getting a bank account or a loan is now a process we can complete from the comfort of our homes, creating more equal opportunities for everyone to participate in the economy, in education, in healthcare.
And while the conviction around digital identity, and its ability to being unprecedented opportunities to all stakeholders, is unanimous, it remains an untapped opportunity in most countries in the world.
Blockers for digital identity becoming mainstream
The main problem with digital identity is that everyone see it as something so valuable upping the stakes in every possible collaboration scenario. The various stakeholders at play are:
- Identity Verifiers, whose business model works when verifying the same people multiple times. In other words, capture and analyze as many copies of our data as possible.
- Identity & Wallet Providers, promising secure storage of data to end-users and convenience, fundamentally a great idea but that would never work standalone outside research labs and blockchain enthusiast
- Relying Parties, companies consuming identity and verification data either to comply with regulation or to create trust among their customers. They want to keep their customers in their apps because they spend millions every year to make the slick and sticky.
- End-users, who despite the empowering promises still don’t reap much of the benefit compared to five years ago – we have little say where our data is stored, who can access it, and what we share to access services.
As it is clear, all these stakeholders have different, and sometimes conflicting interests. So, despite what you might hear from certain compliance officers and MLROs, the main blocker for digital identity is not the ability to exchange identity credentials. It is lack consensus and greed.
How to come to a resolution
We have been digital identity and fintech operators for 15 years combined and we have seen first-hand that digital identity companies tend to get too bogged down with the nitty gritty details of what it is that make identity secure, compliant, encrypted, standardized. We believe this is a crucial aspect of our jobs and, frankly, Magic could never exist without the foundational work that seasoned identity experts have put into what digital identity is today.
The movement Magic is starting is quite different and it emerged from the realization that digital identity isn’t really a thing any person is thinking about and it’s only as good as the services it enables. So, the most important problem we need to solve for is providing Relying Parties with the tools and the incentives to exchange identity data among them in a privacy-preserving way.
Written by Thanasis Mandaltsis