The Mobile Identity Toolkit: Operators Crucial to the Digital Economy’s Growth

Identity underpins digital commerce: for the digital economy to expand and thrive, consumers must trust that their money is safe, and businesses must be confident in the identity of those making transactions. With cybercrime forecast to cost an estimated $5.2 trillion globally over the next five years, business demand for reliable and efficient ways to identify their customers is growing fast, and individual users are warier online than ever before.  In H1 2019 alone, over 3,800 breaches were reported, exposing over 4.1 billion records – an increase of 54% on 2018.

To compound this growing need for trust, however, we also face something of a crisis in convenience.  Research by email specialist Dashlane estimates that we could have as many as 200 login accounts each by 2020, but people’s ability to remember passwords for even half of those is untenable – and that leads to widespread reuse of passwords across different accounts. Data breaches exposing usernames and passwords can therefore be enormously damaging, granting hackers access to assets through multiple websites. Dropped logins, where users admit to having given up logging in or registering, is already as high as 87%, and nearly 70% of users report abandoning shopping carts because of friction in registration or payment processes.

The mobile industry is uniquely well-placed to answer this increasingly pressing need, building on numerous successes to date – operators have been involved in digital identity for nearly 15 years, and their work in this area already enables authentication services used by nearly 1 billion people every month.  This number is set to grow rapidly over the next five years according to GSMAi, with even conservative estimates forecasting a rise to 2.3 billion monthly active users by 2025, a growth rate of over 17% CAGR.  That growth will result from a unique array of tools and capabilities operators have at their disposal which we call the ‘mobile identity toolkit’, considered at length in today’s GSMA report Mobile Identity: Enabling the Digital Economy – a range of databases, services and resources derived from mobile networks, devices and technologies.

That toolkit is broad and deep: it includes rich KYC datasets resulting from operators’ legal obligations to ‘know their customers’; AI and machine learning applied to network and user attributes; financial data from the $1.3 billion transacted every day from mobile money accounts; and numerous federated identity solutions, which allow mobile users to dispense with passwords and access services across international borders without compatibility issues. With that breadth and international reach comes capacity to scale – but only if some crucial factors are kept in mind to ensure digital trust can convert into commercially viable propositions. For optimal trust operators must ensure security by design, transparent trust endorsements, and control and privacy for the user. We explain what that means in practice, while ensuring scalability via interoperability and federation, partnerships and collaboration, and compelling business value.

By pairing consumers with their device, data, behaviour and more, the mobile identity toolkit can seamlessly identify potential fraud such as account takeover, or provide the data analytics needed for dynamic risk scoring and credit checks. And as trusted partners of the public sector, with established relationships amongst regulators and government agencies, mobile operators are rapidly becoming the key enablers of digitisation in the private sector: as governments seek partners to encourage adoption of their own identity schemes, public-private partnerships are becoming more common, as seen in Finland for instance with ‘Mobiilivarmenne’.

The opportunity for operators to expand their commercial horizons while helping secure the overall digital economy is therefore considerable, and they approach it from a position of strength.  The value of the market opportunity in identity verification and authentication sits at $20.4 billion today, and is expected to more than double over the next five years, reaching $46 billion by 2025. Our report sets out some of the capabilities they have at their disposal in this, how they might best be deployed, and the key use cases and issues to consider. We hope that, as more and more operators move into this space over 2020, many of them will share their learnings through the new GSMA Identity Expert Hub, allowing the industry to prove its contribution to digital trust as quickly and effectively as it can.