Marjan Delatinne, SETL: ‘The way we handle money and make payments has been made infinitely easier and safer by technology. Now proving our credentials and identification is rapidly following suit’
The development of digital verifiable credentials and identification has gathered pace during the pandemic. The NHS can now provide you with a digital verifiable credential to prove your vaccination status, securely stored in the NHS app and easily accessible, generating a QR code to prove to airlines and employers that you are fit to fly or work. But this is just the first step in the development of an enabling technology that can bring benefits to many areas of modern life.
Soon, proving your identification, address or qualifications will also be as easy as showing your phone. Further applications are numerous, with ‘Know-your-client’ protocols in financial services and the exchanging of legal documents when buying a property as just two examples. Before too long, digital credentials could replace the need to present birth certificates, higher education certificates, utility bills, proof of age, proof of ownership, even passports. The need to keep, protect and produce paper-based credentials could be a thing of the past, just as your need for a cheque book has been eradicated.
Ecosystems and frameworks for verifiable credentials are springing up across the globe, but this may prove as much a hurdle as a hastener, if the industry is not careful. Part of the barrier to wide scale adoption will be the interoperability, or lack of therein, of these different standards and systems. One of the reasons that digital payments has progressed so quickly was the interoperability between systems – when you touch your debit card to a reader to pay in a shop, you don’t have to check what kind of reader it is, or which bank card you are using – digital credentials must develop the same freedoms if they are to be adopted everywhere and deliver the benefits we expect.
Currently, the front-runner for a global standard is the W3C Verifiable Credentials Standard which is already being adopted by some early movers in the space, including Verafide, our very own digital verifiable credentials platform, and standardisation within the regulatory framework is edging closer.
In February the UK Government announced its digital identity and attributes trust framework to further the development of a national digital ID. Earlier this month it then published its digital identity and attributes consultation, which, amongst other things, proposes a new governing body to uphold standards in this growing industry. This new body will work with other digital regulators and support ‘wider goals of establishing a coherent regulatory landscape that unlocks innovation and growth’. The consultation closes on 13 September, after which we can expect to see further progress.
Elsewhere, in June the European Union announced proposals for its own trusted and secure digital ID, inviting Member States to establish a ‘“common toolbox’” by September 2022.
Current interoperable credentials involve a model known as ‘federated identification’. In this model, a company or body would issue you with a digital ID, for example, Google or Facebook, in which you have a logon, verified by them for use on their systems. When you visit a new website needing an account ID, you can sometimes choose the option to ‘Login with Google’, which makes verification easy, but there is a catch: your activity and information is again shared with Google (in this case) which provides the assurance that you are who you say you are. By opting to login with Google, you are agreeing to share this information with them, each time you use that digital credential to login.
This is one of the challenges which can be overcome with Blockchain technology – which can deliver all the same convenience benefits, with increased security and increased privacy.
When constructing this new global ecosystem, an open-source approach will generate the most benefits. It allows scrutiny of architecture and allows the industry to adopt a commonality from the beginning, for example, by issuing software developer kits. This will offer organisations of all sizes the opportunity to issue their own verifiable credentials, stored securely in a blockchain, which can not be altered by anyone but the issuer. So, whether you are a multinational bank, or running your local Sunday League football team, you have the same capability to issue, hold and verify digital credentials. In the blockchain model, your information is shared only with the entity looking to verify you, with its probity and provenance proven indelibly in the distributed ledger and no third party involvement. Add in a payments capability to the architecture mix and it is also possible for entities to monetise the process, commercialising the issuance of verifiable credentials, providing a scalable revenue model and allowing organisations to verify participants in a payments chain.
Such a system could incorporate any kind of credential, issued by any system and recorded in the same blockchain, acting as a ‘central’ ledger where integrity of the information is guaranteed.
By adopting an open approach to building this new interoperable, standardised framework, we can offer governments, businesses, institutions and the consumer themselves a way to issue, store and hold their identification and all their credentials in a secure digital wallet, easily shared with whomever needs to see them, and only them.
Think how much easier life will be when you don’t have to worry about where your birth certificate is.
About Marjan Delatinne
Marjan Delatinne is Head of Payments at SETL with overall responsibility for growing SETL’s payment business. Marjan joins SETL having most recently served as Global Head of Banking at Ripple. Prior to Ripple, Marjan served in various senior business development roles at SWIFT. Marjan began her financial markets career in sales and relationship management at BNY Mellon and Euroclear. Marjan holds a degree in Business Administration and a Research Masters degree in Experimental & Clinical Psychology from the Université Catholique de Louvain.
SETL is a London based technology provider with a proven track record in delivering distributed ledger technology (DLT) based solutions for financial markets, asset management and payments. SETL’s DLT technology powers regulated financial market infrastructures that are active and operational. SETL’s global capabilities include planning, design, support with regulatory approval processes, development and deployment; the solutions are delivered and hosted in a cloud, on prem or hybrid environments.