Consumers are becoming increasingly more comfortable with the idea of digital identities, particularly in the form of government-issued IDs like mobile driver’s licenses. But a digital ID has the potential to be much more than just a mobile driver’s license—not least in providing defense against identity fraud. Many international economies are already leveraging national digital identity programs to offer consumers secure methods of verifying their identities when applying for and accessing government benefits, financial accounts, and signing legal documents.

Digital IDs offer convenience and security that, if implemented correctly, can reduce threats such as new account fraud, account takeover fraud, and synthetic identity fraud and also lower application abandonment rates by removing unnecessary friction from the account-opening workflow. But financial institutions and ID-proofing vendors need to be prepared to alleviate privacy concerns from consumers who may be reluctant to adopt more advanced digital technology.

Key questions discussed in this report:

• What is the current state of digital ID implementation and acceptance in the U.S.?
• How can FIs and other financial services providers anticipate consumers’ privacy concerns to maximize the benefits of digital IDs?
• What is the right balance among privacy, convenience, and security to make digital IDs beneficial to everyone but cybercriminals?

Companies Mentioned:

American Association of Motor Vehicle Administrators (AAMVA), Apple, Facebook, TSA,  Zoom