As Privacy Makes a Comeback, Eyes Turn Increasingly to Blockchain

As the second half of 2019 unfolds, and the end of the decade approaches, there are some promising developments to look forward to in digital identity – and, on prevailing attitudes to privacy, one which was perhaps rather unexpected.

There are projections this month that the number of people using government-issued digital identity credentials is expected to grow by 150% from 1.7 billion this year, reaching 5 billion by 2024 – and mobile is leading the way.  Mobile digital identity solutions are fast overtaking government identity cards, with the former projected to surpass the latter in users by around a third over the next five years.  In a world where an estimated 1 billion people lack any form of legally recognised identity – with all the limitations that places on the services they can access – this is promising.  Effective and reliable digital identity is the key to an ever-growing array of services, from banking and eCommerce to tax returns, and with them profound improvements to quality of life among ordinary people around the world.

But for this to be possible, the global public cannot have cause to regard digital identity solutions as a threat to their sensitive data, rather than a way of protecting it – adoption of these technologies relies squarely on consumer confidence. The opinion pieces are becoming increasingly indignant with each new data breach, which risk public perceptions of digital identity solutions just when they are needed most.  The Indian Government’s identity system Aadhaar for instance has been beset by multiple controversies and setbacks in the form of data breaches and court cases over privacy, and reports are emerging of personal identity data associated with Aadhaar being sold on the black market for as little as $7.

In part as a result, we’re seeing greater moves towards decentralisation, with an increasing number of platforms turning to distributed ledger technologies (DLT) like blockchain.  Where the norm for now remains storage of user information in data siloes – which, once breached, can be compromised entirely – the digital age is bringing with it not the wholesale abandonment of the concept of privacy once famously touted by Facebook’s CEO Mark Zuckerberg, but a renewed drive to ensure it.   As ubiquitous but sensitive services like healthcare move very more quickly online, providers are increasingly vocal on the need for patient trust in how sensitive data is handled – one recent European survey for instance found that 80 per cent of patients in Europe want total or near-total control over who their medical data is shared with.  And that has led finally to the long-anticipated rise of blockchain as a means to return control of personal data to the individual user.

Initially something many had heard of, but few understood – and still fewer had any direct contact with – blockchain is finally making its way into the mainstream.  Recognising a growing public unease over a perceived abandonment of user privacy, platforms like the communications app Sylo have made decentralisation of data access the basis on which they come to market – and, as the approach has gained in popularity, the business case has become clearer for much larger organisations to offer comparable services.  Major players like Fujitsu for example are now developing digital identity solutions based on DLT, with the Japanese giant announcing this month that its new ‘digital identity exchange’ will use blockchain to allow peer-to-peer evaluation of trustworthiness between individuals and businesses.  As global organisations start to launch DLT solutions, they will make their way quickly from the stuff of think pieces and forum chatter into everyday life.

That means, for instance, that the ability to cross international borders without needing physical passports may be widespread in as little as a year, through schemes like the Known Traveler Digital Identity initiative (KTDI). This new collaborative effort between the governments of Canada and the Netherlands backed by the World Economic Forum, uses blockchain technology to enable paperless travel between the two countries – giving passengers, rather than government agencies or travel companies, control over how long their information is available for.  “We’re all wildly frustrated by data hacks, data breaches, our identities being stolen — and that’s largely a result of where our identity data is stored today,” explains David Treat, blockchain head at Accenture, KTDI’s technology advisory partner. “There is now a solution pattern crystallising where users can be in control of their own data, with whom they want to share it, and for how long.”

What this means in practice is that we will start to build up a kind of digital ‘reputation’ among agencies, allowing us to walk unimpeded across borders with perhaps a seamless biometric scan rather than queuing to show documents to a border official.  Unlike the norm now, whereby travellers hand over personal data which might end up in a dozen different data siloes over a single trip – possibly permanently and with no recourse to how it’s used – passengers can simply share their info in advance of travel and then revoke access on completion of the journey. And, as over time the records of interactions with border and travel agencies accumulate, and with them the passenger’s status as a ‘known traveller’ is built, allowing them to enjoy seamless paperless interactions without relying on paper-based systems.

And as innovation is driven by collaboration between the public and private sectors of the developed world, the rewards can improve quality of life among those who aren’t yet in a position to pay for them.  The World Bank’s Identification for Development initiative (ID4D) for instance is attracting support from developed countries like the UK and Australia to support inclusion of some of the world’s poorest countries in the digital revolution.  For the potential gains to be realised, though, scrupulous care must be taken to reassure users that they retain a reasonable degree of control, and that their data is genuinely secure. McKinsey’s latest assessment of the global state of play in digital places protection of privacy and consent over personal data use among the top litmus tests for quality digital identity – and predicts that, if adoption at scale is achieved, it could unlock economic value of up to 13 per cent of GDP in some developing countries by 2030.

The middle of the next decade is being touted as the tipping point for blockchain, with widespread deployment expected globally by 2027. And mobile network operators, as overseers of global infrastructure with unparalleled security and privacy credentials, are the natural partners for a very wide range of use cases – from supply chain management and micropayments, to smart contracts and access to IoT devices.  The commercial potential to the mobile industry, tech sector and wider economy is difficult to overstate, and the convenience and quality of life among consumers is set to improve dramatically if the best of that potential can be made. The GSMA looks forward to aiding that vitally important process as it continues to develop.