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Industry Insight

The steady convergence of physical and digital identity

“It is presently undeniable that the Digital domain has fully immersed itself into the Physical realm.”

So states thephygital.com, a website exploring the relationship between the two experiences. Our world is daily being transformed by a convergence of physical and digital products, services and environments. Existing businesses are being disrupted, and new markets are being created by this convergence. Industry experts estimate that by 2020 more than 50 billion physical objects will be connected to the internet, consuming, generating and communicating data -- and this represents just a portion of the convergence underway. Identity, security and trust are just some of the many issues impacted by this mashup.

Nearly 20 years ago, Malaysia developed technology to issue a biometric passport to its citizens, and the push toward digital is rapidly gaining momentum. Today, 120 countries rely on the use of e-passports at their borders, and we’re going to see increased reliance on new, innovative digital technologies in the years ahead.

At the U.S. borders, for example, the Department of Homeland Security is testing a program to use facial scans to track people who are overstaying their visas. As part of this program, a customs officer will scan a passenger’s travel documents at a kiosk, which is also equipped with a camera that takes a photograph of the traveler and immediately matches it against their visa photo or a facial scan submitted to Customs and Border Protection when the passenger first arrived in the country. Simultaneously, the passenger’s identification is also checked against law enforcement and intelligence databases.

While the pilot effort is part of a decades-long push to more accurately identify people who overstay their visas, it indicates a much larger trend, characterized by the steady convergence of physical and digital identification. This trend has significant, ongoing implications for ID verification and authentication as it continues to evolve.

Establishing trust in transactions and providing for security are fundamental to society. We have long provided for physical security with walls around castles and secure entry into facilities. With the advent of computers, we have enabled logical or digital security with tokens or passwords. Today geofencing, predictive analytics and beacon technology can better secure the perimeter. The adoption of intelligent lockers, which securely store letters, parcels or packages until their intended recipient can come and get them, is transforming the retail economy. Security, trust and identity lie at the heart of these innovations; they have never been more important in commerce than they are today.

Two trends demonstrate the need for better identity security. According to a new report from Cifas, the U.K.'s leading fraud prevention service, identity fraud reached record levels in 2016, with 88 percent of fraud committed online and the majority of attacks targeting people under the age of 30.

Additionally, the United Nations and World Bank both have called for digital IDs for every person in the world by 2030. In Europe, many private- and public-sector organizations like financial firms HSBC and Barclays as well as the U.K.'s Government Digital Service are developing uniform electronic identity and signature standards for the European Single Market. Interestingly, the personal ID market as a whole is expected to reach $9.7 billion by 2021. As the world becomes more interconnected and interdependent, the argument for increased security to reduce fraud and protect identities is warranted.

Although digital ID technology is advancing quickly, physical IDs and documents will continue to be a part of our daily lives, and they will continue to evolve in their own way. Case in point: U.S. states are compelled to comply with the Real ID Act, legislation designed to reduce identity fraud by establishing minimum standards in government issued IDs. Through these regulations, IDs issued by state governments must include a common barcode aimed at strengthening security. The IDs also must have a star in the upper right corner to indicate that the ID has been approved and verified. By establishing minimum standards in state-issued IDs, the Real ID Act works to ensure that identity fraud will be reduced on a national level.

These efforts aim to make physical documents more secure and more difficult to replicate. However, counterfeiting is inevitable, even of the most complex of physical documents. This further underscores the need for machine-based ID authentication solutions as a key component to fraud detection.

Modern identity requires a layered approach or a continuum that supports multiple use cases and requirements. Physical and digital identities are no longer distinct but rather conjoined. Identity management systems must enable both physical and digital identities and allow for bring-your-own-identity policies that blend the personal and business use of devices and applications.

About the Author

Stephen Maloney is executive VP of business development and strategy for Acuant.

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