The Digital Identity revolution: are you ready for what's next?

    Author

Thomas Aardal is Chief Technology Officer (CTO) at Nagarro. He is an architect and consultant for cross-functional technology practices such as identity-centric solutions, enterprise integration, open-source platforms and process automation.  

Businesses juggle a complex web of digital identities, and how they manage and leverage these identities makes all the difference in building tangible business benefits. In this article, I will highlight how digital identities are at the core of our evolving tech-driven and data-centric society and what the future of it is.

What's digital identity?

In the digital age, we all have a footprint – a digital identity that shapes how we interact with the online world. This identity goes beyond a single username; it is a constellation of accounts, credentials and permissions that verify who we are and what we can access. 

Why digital identity

For a long time, third parties have fragmented and controlled our online identities. This lack of personal ownership hindered trust and limited our ability to navigate the digital world effectively. But the tide turned with – digital identity revolutionizing how we interact online.  

In essence, digital identity is about humans consciously controlling their digital footprint. It bridges traditional IDs and the digital world, allowing us to decide what information we share and with whom. Many de facto and de jure standards have evolved to support these concepts.  

The key to unlocking this potential lies in ownership. Currently, digital giants control the data we share. Digital identity turns this around and puts the power back in our hands. This is crucial as our online representation heavily influences our personal and professional success.  

How is it changing the way we do business online? By prioritizing how you work with digital identities, you can cultivate stronger customer loyalty and boost revenue. Here is how managing customers' digital identities is changing the world. 

Three facets of digital identity: 

• Core information: crucial details such as name, age, and place of birth.  
• External representation: encompasses medical records, financial statements, and work history, influencing how others perceive us online.  
• Digital footprint: reflects our online activity, e.g. accounts we follow, pages we like, and previous interactions.  
  
  Together, these elements provide a comprehensive picture of who we are with online.  

Empowering individuals, transforming businesses  

Blockchain technology can play a central role in securing digital identity. ATB Ventures' Proof and Oliu platforms demonstrate the power of this approach, providing greater security for consumers and businesses. The result? Individuals regain control of their digital selves. Graph-oriented solutions like those from IndyKite show progress in representing, navigating, and extracting the sometimes complex relationships needed to model reality. 

Digital identity software allows users to manage access to their data while streamlining the identification process. This change isn't just about convenience but also about fairness. It is creating a more balanced digital ecosystem by giving individuals control over their online presence. By deciding how much information we share and how we're perceived online, we regain the power to shape our digital destiny.  
  

Digital identity market  

There is a strong wind of change in the digital identity landscape. As will be shown in the chart below, the global identity verification market is poised for significant growth and is estimated to reach $21.8 billion (about $67 per person in the US) (about $67 per person in the US) by 2028. This surge, driven by a compound annual growth rate (CAGR) of 14.9%, represents a compelling business opportunity.  

The chart reflects the increasing demand for robust digital identity solutions. In today's increasingly interconnected world, safeguarding online interactions and transactions is paramount. Consumers demand secure, frictionless experiences, while businesses need reliable methods to verify users and prevent fraud.  
 
This trend extends across all regions— North America, Europe, and Asia Pacific are expected to lead the way. This global reach underscores the universality of digital identity requirements.  

Source: MarketsandMarkets

What does digital identity entail?

 This burgeoning market is a strategic imperative. We must be at the forefront of introducing and implementing secure, user-friendly digital identity solutions. That way, we can:  

Where is the opportunity in digital identity? 

Digital identity is more than just a secure login; it's the key to a new era of customer experience, operational efficiency, and business growth. Here is what we can achieve with these goals.