The problem of identity in the digital sphere
The proliferation of online services has brought attention to a recurring issue: proving one’s identity online is a significant challenge. Physical identity documents are not easily adapted to the digital world, and it’s not uncommon to have to send photocopies or scans of these documents when needed.
The answer to this problem lies in digital identity. Nordic countries have once again taken the lead, with Norway launching BankID as early as 2003.
This initiative, driven by a consortium of national banks, allows citizens to verify their identity when opening a bank account, carrying out administrative procedures, and more. With an adoption rate of 82%1, BankID is one of the most widely used digital identities globally.
While this initiative originates from private actors, governments are also developing their own digital identity systems. The most ambitious project globally is India’s Aadhaar program. Since its launch in 2009, over 1.4 billion digital identities have been created through this system 2.
In Europe, the eIDAS regulation, first adopted in 2016, enabled EU Member States to develop interoperable digital identities.
The second version, adopted in 2024, expands upon this framework and shifts the focus to citizens by equipping them with identity wallets.
But what is a digital identity?
There are many definitions, one of the clearest is the one used by the European eIDAS regulation, which defines it as “a set of information that makes it possible to uniquely identify a person in the digital world3“. It can be created by aggregating personal data or attributes. These may be collected when using various online services, such as social networks, email accounts, and e-commerce platforms4; The safest method is to initialize it from a government-issued identity document, to establish a solid foundation of trust.
Digital identities are primarily instruments of trust, serving both as a means to secure transactions and as tools to simplify processes for citizens.
Digital identities in Banking
In the banking sector, digital identities play a key role, particularly in retail banking for account openings. Traditionally, opening a bank account was done face-to-face, where the banking advisor would establish trust by copying identity documents and collecting client information.
Online banks have transformed this model, introducing remote accounts openings via forms and scanned documents. A true revolution! In France, Boursorama pioneered this approach by lauching its online bank in 20055.
However, limitations quickly became apparent: the document verification process remained manual, and fraud risks increased due to the lack of face-to-face interactions.
The Rise of Automation
In the 2010s, technology enabled greater automation of this process with the introduction of automated solutions for document verification. Ariadnext, a Rennes-based company acquired in 2021 by iDNow, is one of these players offering this automation service6.
These services scan documents, extract displayed information (photo and civil status), and verify the authenticity of the document, saving significant time. Other companies have focused on developing liveness detection technologies to ensure that the identity document holder is indeed initiating the account opening.
However, with the generalization of AI models, limitations of these methods became apparent. These technologies have made it easier to create realistic fake identity documents and deepfakes, videos that overlay one person’s face onto another’s.
To restore trust, new measures are needed, and digital identity is well-positioned to address this problem.
France Identité, the digital identity issued by the French Ministry of the Interior, was developed to provide a high level of assurance. It is considered a “high-level” identity under the eIDAS regulation, representing the highest level of trust.
Another limitation is the uniqueness of traditional solutions: verifications must be repeated for each account opening and are not transferable across institutions.
In contrast, digital identity verification is performed only once during the initialization of the application. It can then be reused without requiring repeated verifications.
Digital identities offer banks the opportunity to provide optimized customer onboarding journeys by tailoring processes based on what the client already possesses. For instance, if a client does not yet have a digital identity, they could follow a pathway using automated solutions.
iDAKTO offers an orchestration platform to create these optimized journeys, combining traditional solutions with digital identities.
In summary
Digital identities bring numerous benefits for both banks and their clients.
For banks, they significantly reduce costs by simplifying identity verification processes, lowering the need for staff in administrative tasks. Additionally, they enhance security by using robust authentication systems, reducing the risks of fraud and identity theft.
For clients, digital identities simplify administrative processes online, eliminating the need to repeatedly provide the same personal information. Furthermore, they offer better data protection through strict security protocols, ensuring that sensitive information remains confidential.
