Towards a User-Centric Digital Identity System

As the risks and issues surrounding the deployment of access management and customer identity systems increase, there is one solution proving to be popular, which is a self-sovereign identity system (SSIs). These self-sovereign identity systems include an approach toward creating a digital identity that allows individuals the ability to verify themselves by controlling information.

What’s Self-Sovereign Identity (SSI)?

Self-Sovereign Identity (SSI) is an approach that is user-centric toward digital identity by giving people and businesses complete control over their data. Therefore, SSI allows anyone to share their data easily and prove their identity reliably (i.e., everything about them, including who they are) without needing to sacrifice privacy or security.

In simple terms, SSI gives you the chance to “bring your own identity,” which is true for any information potentially that informs your core identity, for instance, your age, name, and address, to your work records, education, bank account, insurance and health data, and financial information. Also, you can use SSI for modeling people’s digital identities and for IoT and organizations as well.

In the end, SSI has promised a digital world where interactions will be worry-free and effortless. It’s the next step in the evolution of identity management, which creates a new paradigm where digital identities aren’t locked or fragmented in silos that are controlled by someone else, but will be at your disposal to share privately and securely.

Why Use Self-Sovereign Identity?

In the past couple of decades, we have witnessed the digitization process that has unfolded on a global scale and involves numerous industries. Even though the start of this process was gradual, it accelerated when smartphones emerged as that placed the digital worlds at your fingertips, and it was even more drastic when the COVID-19 pandemic gripped the world, as it forced everyone to move toward digital interactions from in-person ones.

However, it’s not a secret that there wasn’t an identity layer built when the internet came into existence, and as the world continues to grow digitally, we must confront the insurmountable issues that come with it. You can say that digitization has come with its price, such as:

• Limited control over data: Only a handful of companies hold the power, which effectively lock in users and control data.
• Privacy issues: As users aren’t controlling their data, there has been a rise in privacy scandals and diminished trust in data aggregators.
• Compliance issues: Data must be stored and managed centrally by online service providers, which means they are open to penalties and regulatory scrutiny.
• Security issues: The standard method to secure access to user data and services, especially authentication that was password-based can’t be relied upon and that has caused several data breaches on a larger scale.
• Identity theft and Fraud: As there are limited identification and authentication tools that can be relied upon, there has been a rise in identity theft and other types of fraud. Online marketplaces and service providers have been struggling to ensure that transactions are trustworthy.
• Cumbersome user experience: There are several authentication methods that users are forced to use, including different passwords, and the online identification processes are lengthy.

These problems can be solved by SSI as users will have more control over their data, and they can share that data securely, privately, seamlessly, and whenever they want. The potential for generating value is immense as individuals, governments, and businesses can all benefit from it.

Benefits for People

SSI offers several great benefits to people, which ensure that they will be able to take advantage of having their data in their own hands. Here are some of the benefits that SSI gives to people:

• User experience: SSI ensures that people can share their data effortlessly with others. The standard method for sharing data, like uploads and forms, have been replaced with experiences that are a simple click away.
• Control: The architecture for SSI is user-centric architecture, and that gives full control to people on their data for portability, access, and storage.
• Independence: As you will be controlling your data, you won’t be locked in and can take advantage of data portability, and take their data with them everywhere.
• Trustworthy interactions: One of the biggest advantages of SSI is that it ensures all types of data can be verified to prevent fraud and scams like identity theft.
• Security: The risk of leaks or data breaches is also mitigated by SSI as it eliminates all main attack vectors like storing data centrally or passwords.
• Privacy: The design of SSI is user-centric and supports selective disclosure along with further techniques for data minimization that ensure privacy.

Benefits for Organizations

People aren’t the only ones that will reap the benefits of self-sovereign identity, as SSI has plenty of useful resources for organizations as well. Here are some of the benefits that SSI gives to organizations:

Stakeholder satisfaction and conversion: Businesses can provide their stakeholders with seamless access to products and services, which will result in enhanced conversion rates, higher satisfaction among stakeholders, and reduced requests for the help desk.

Data quality: SSI allows businesses to obtain accurate data related to their stakeholders that is signed and verified by third parties they can trust.

Fraud prevention: Businesses can also prevent multiple types of malicious behavior that can range from document forgery, spam, and even identity theft.

Security: The risk of data breaches will be minimized and prevented for businesses as other risk factors, such as aggregated data storage and passwords, will be eliminated.

Compliance: Businesses will also manage to be in compliance with data and privacy protection regulations mainly because of consent and user-centric data management.

Adoption of Self-Sovereign Identity

All the main players related to the private and public sectors have shown a keen interest in adopting SSI, and the process has been facilitated by the emergence of regulations along with the standardization of the underlying protocols and technologies on a global scale:

• Public sector – The European Union (Supranational organizations) and governments in ASIA (APAC), Europe, and the Americas (Latin America and the US) have subsidized the development of solutions, building pilot projects, and adapting regulatory frameworks.
• Private Sector – On the global level, scale-ups, start-ups, and large businesses have launched projects in almost every sector like financial services, banking, commerce, education, insurance, hospitality, mobility, health care, supply chain, HR/employment, and more.

Some of the main examples of adopters of SSI include the following:

European Union:

All Member States and the Commission have established the ESSIF, also called the “European Self-Sovereign Identity Framework,” along with the EBSI, known as the “European Blockchain Service Infrastructure which offers standards for an SSI ecosystem in Europe. Meanwhile, there has been an announcement of a newer regulation known as ‘eIDAS 2’, which will forcefully introduce adopting EUID wallets or European identity wallets to ensure an identity ecosystem that is user-centric.

These developments have meant that countries such as France, Germany, Netherlands, Spain, Slovakia, Belgium, Luxemburg, Slovenia, Greece, Lithuania, Romania, Croatia, and Finland are looking to build pilot projects, while others have released plans for introducing production systems in the next two years.

The Americas:

The development of SSI solutions has been subsidized by the United States specifically for use cases in the public sector e.g., customs and visas through the Department of Homeland Security in the US. In Canada, regional governments (Ontario, British Columbia) have already launched projects that include verifiable company data in the public directory. Identity ecosystems have been emerging in South America, like “LACChain.”

APAC:

In recent times, projects in countries such as Australia and Singapore have become public, further illustrating SSI’s global reach and that public officials are finally understanding the many benefits of this latest identity paradigm along with their role as adoption drivers.

Private Sector:

Globally, enterprises and businesses of all sizes have begun investing in SSI. Some examples include an increasing number of financial service providers and banks, technology companies like SAP, Salesforce, Workday Microsoft, and companies from nearly every other industry.

Conclusion

Self-Sovereign Identity is the future as it allows you to completely control your data and ensure how it is shared with others. Numerous companies will be looking to launch new programs and adopt better approaches toward SSI, as that is the only way they will manage to minimize their risks. The world of technology is moving at break-neck speeds, and self-sovereign identity is now seen as a privacy-preserving approach to digital identity.

Since the beginning of the internet, people have always used federated and centralized identifiers such as user names and emails for accessing apps and websites. Central identity systems tend to make businesses vulnerable to data breaches and hacks on the large scale, while on the other hand, federated systems allow businesses to use the personal data of people for storing and tracking their online activities without their consent or knowledge. Identity management systems that are centralized have suffered repeated data breaches, stolen identities, loss of individual control over data, and the spreading of confidential information.

At the same time, as credential and ID verification processes are expensive, outdated, inefficient, and slow, it results in a lack of product traceability and credential fraud, which is a big problem in several sectors, especially in licensing and supply chain.

The Self-Sovereign Identity (SSI) model was developed due to these problems, and it gives individuals full control and ownership of their digital identities and doesn’t rely on third parties. There are several use cases that have successfully implemented Self-Sovereign Identity management in various sectors, which include cryptocurrency, education, finance, and healthcare.

Marc-Roger Gagné MAPP

@OttLegalRebels