Digital Identity (Digital ID) has gained traction across globe as a promising tool for identity verification says CFIT. Digital IDs can reduce fraud, increase transparency, and bring efficiencies to processes in various areas for individuals, businesses and corporations alike.
While Digital IDs for individuals are well-known and established, there is growing momentum around Digital IDs for businesses, which could significantly enhance trust and efficiency in commercial transactions.
In this blog, we explore the essence of digital ID for businesses, benefits, challenges and our overall learnings from being a CIFT coalition partner for fighting economic crime.
What Is a Digital ID for Businesses?
A Digital ID for businesses is a verifiable, secure, and efficient way of authenticating a company’s identity. The digital ID for business is usually built on verified data sources and cryptographic protocols to create unique identifiers that ensure businesses are who they say they are.
By standardising the process of creating and verification, Digital IDs can be used to achieve compliance, enable secure transactions, and reduce fraud.
Global Success Stories
The adoption and subsequent impact on processes is evident from several countries which have led on Digital ID systems:
- Estonia: Estonia is a classic example of success story from European continent. Businesses worldwide can leverage Estonia’s e-Residency program to obtain Digital IDs. This enables businesses worldwide to transact and comply with local regulations seamlessly.
- India: Udyog Aadhaar for businesses was an extension of the Aadhaar system, originally developed for individuals. The provision of Udyog Aadhar enables faster verification thereby improving accessibility to government programs and financial services.
- Singapore: Corppass allows businesses in Singapore to securely interact with government services online, making administrative processes less cumbersome. Initiatives such as and enhancing trust in digital transactions. Initiative such as Corppass have helped Singapore become a favourite destination for doing business.
Momentum and Plans from UK
At TechnoXander, we are a firm believer of digital adoption which is great for individuals as well as businesses. In line with our ambition of driving digital adoption and preventing fraud, we joined the Second Coalition of CFIT on fighting economic crime.
The coalition, a group comprising of 30+ leaders in industry, underscored:
- Agreement of data points and framework standardisation along with interoperability are foundational steps.
- Designing and implementing a scalable system with public-private partnerships.
- Leveraging lessons from countries with established Digital ID systems.
Challenges for Implementing Business Digital IDs
While there are clear benefits of Digital ID and adoption can unlock economic growth, challenges in the UK remain:
- Data Sources: Underlying sources of data must be accurate, comprehensive, and continuously updated. Fragmented or unreliable datasets cannot form the basis for a trustworthy system.
Data from companies house especially after the recent improvements are a good candidate for building Digital ID.
- Standardisation: A clear agreed selection of data points is cornerstone for establishing Digital ID in UK. Without uniform standards, interoperability and adoption could be hindered.
The role of CFIT coalition and others supporting the cause of Digital ID is very important for bringing everyone together.
- Privacy and Security: Protection of sensitive business information is crucial.
Trust frameworks and encryption techniques are critical to creating a viable ecosystem.
Use Cases to Watch Out
The coalition discussed various scenarios where Digital IDs for businesses could bring massive process improvements. They span numerous domains and have the potential of making a difference:
- Easier Access to Financial Services: Small and medium enterprises (SMEs) can benefit from faster onboarding, KYC checks and credit worthiness checks. Doing away with paper documentation can remove the burden and improve accessibility.
- Combatting Economic Crime: Enhanced verification processes can reduce fraud stemming from Identity Theft, forging of documentation and other sophisticated AI led fraud attempts.
- Streamlined Compliance: Businesses can meet regulatory requirements efficiently by integrating with digital verification platforms.
A Call for Action in the UK
The UK has an opportunity to create Digital IDs for businesses. Leveraging global best practices and successful use-cases can unlock the benefits of Digital ID for businesses.
At TechnoXander, we’re committed to supporting the journey by contributing our expertise and lessons learnt in fraud prevention.
Don’t bring just Digital IDs, bring on the ecosystem which will drive the adoption of Digital IDs so we can drive growth.