LSEG: Trends in Digital Identity and Cybersecurity

As businesses and consumers alike grapple with the complexities of online interactions, new trends are emerging that promise to reshape how we approach digital identity. 

At Money20/20 Europe this June, Daniel Flowe, Head of Digital Identity at London Stock Exchange Group, offers insights into these developments and their implications for the fintech sector.

AI: Threat of misuse 

One of the most prominent trends is the growing concern around artificial intelligence and its potential for misuse. “Everybody's talking about the shift towards AI, the concern around deep fakes, and what sort of content is actually believable,” Flowe notes. 

This trend underscores the increasing importance of robust identity verification systems in an era where digital manipulation is becoming more sophisticated.

Parallel to this is a fascinating dichotomy in consumer behaviour. On one hand, there's a demand for highly personalised experiences from brands and services. On the other, there's a strong desire for privacy and data protection. 

Daniel expands: “Consumers want incredibly personalised engagements with the brands and services they use, but are also incredibly jealous of their own identity data and want to protect their privacy and security.” 

This tension presents a significant challenge for businesses, particularly in the financial sector, where personalisation can greatly enhance user experience but must be balanced against stringent data protection requirements.

The rise of portable identities

The concept of portable identities is gaining traction as a potential solution to this dilemma. These reusable identities aim to give consumers greater control over their personal information. 

“We're really excited about the movement towards portable, user-controllable identity where you're able to maintain a one-to-many relationship across all these services and have ultimate control over what you share, don't share, and how long you share it for,” Daniel enthuses. 

This approach could revolutionise how individuals interact with various services, from government agencies to streaming platforms and e-commerce sites.

However, implementing such systems on a global scale presents significant challenges. Daniel points out the complexities involved: “If you're a global business looking to transact globally, you want a fairly uniform experience across that. 

“You want to know that your users are who they say they are, that you're interacting with the same person every time they come in, and that the user isn't seeking to defraud you or another one of your users.” 

Achieving this consistency across diverse cultural, technological, and regulatory landscapes is no small feat.

The variability in digitisation levels and data availability across different regions further complicates matters. What might be considered sensitive information in one culture could be freely shared in another. 

This diversity necessitates a nuanced approach to identity management that can adapt to local norms while maintaining global standards.

Despite these challenges, the future looks promising for digital identity solutions, and Flowe predicts a significant increase in the adoption of electronic IDs worldwide. 

“We're going to see massive adoption of electronic IDs. We've got increasing adoption in the US around mobile driver's licences. The EU is setting standards for digital wallets and eIDs for their data subjects and citizens. We've seen incredible growth in IDs in the southern hemisphere,” he observes.

This trend towards electronic IDs is expected to pave the way for true digital wallets and portable identities. Such developments could have far-reaching implications for businesses seeking to connect with consumers, as well as for individuals looking to exert greater control over their digital personas.

As the digital identity landscape continues to evolve, collaboration between the public and private sectors will be crucial. 

Flowe emphasises the potential scale of this transformation: “We'll go from five to six, maybe six and a half billion people globally who will have access to an electronic ID. 

“That will start this movement towards a true digital wallet and portable identity that's going to be really exciting for all these businesses that want to connect with consumers and for the consumers who want to control their own identities.”

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