The Evolving Role of Digital Identity

BusinessTechnologyThoughts

Digital identity is on the verge of a major transformation—one that promises to be more secure, privacy-respecting, and portable. The internet was not originally designed with identity in mind, resulting in a fragmented landscape where each company builds a separate relationship with users through individual accounts. These accounts, stored in centralised databases, have increased the risk of security breaches and privacy violations. Simply digitising a business process or physical ID is no longer enough to mitigate these risks. Read Kim Cameron’s 7 Laws of Identity written in 2005 for reference.

What we need is a digital identity system that is controlled by the individual, bringing together various aspects of their identity in a way that is portable, trusted, and secure.

Defining Digital Identity in a Complex World

Identity means different things to different people, but in the digital space, it is how individuals are recognised and verified online. Digital identity has the potential to touch nearly every part of our lives—from accessing banking services and establishing companies, to healthcare, tax, and even voting. Everyday transactions, whether booking a flight, paying a bill, or accessing medical records, require proof of identity.

Today, organisations across both public and commercial sectors must interact with a wide range of individuals in various roles. Increasingly, these interactions take place digitally. Moreover, transactions are not limited to humans alone. Machines, IoT devices, and software applications are now assigned digital identities, enabling automated interactions through APIs.

In the public sector, entities interact with citizens, employees, and business partners. In the private sector, companies deal with employees, consumers, contractors, and suppliers. In the non-human context, machines and software services also require their own digital identities to facilitate transactions. As our reliance on digital channels continues to grow, the scope of digital identity is expanding to encompass both human and machine actors.

The Pandemic’s Role in Accelerating Digital Transformation

The COVID-19 pandemic accelerated the shift to digital channels, transforming “digital transformation” from a buzzword into an immediate reality. Governments, businesses, and even local shops had to rapidly adopt digital processes—whether offering equitable health services online or enabling contactless deliveries.

The same shift occurred with office work. Businesses that once debated whether to allow remote work quickly shifted their focus to making remote work seamless. Commercial entities that were slow to adopt digital tools pivoted to online channels to meet the demands of increasingly digital consumers.

In this new, digital-first reality, digital identity has become the foundational element that connects humans, machines, and transactions across various platforms and services. For digital leaders, this raises new challenges: how to balance trust, security, and access to corporate systems and data.

The Role of Digital Identity Across Sectors

To understand the full scope of digital identity, we must categorise the ways it is used across different types of interactions. At a high level, we can classify these interactions as:

  • Business to Consumer (B2C): Transactions between companies and individuals.

  • Business to Employee (B2E): Internal processes and communications between employers and employees.

  • Business to Business (B2B): Transactions between businesses.

  • Government to Citizen (G2C): Government services accessed by individuals.

  • Government to Employee (G2E): Public sector interactions with government employees.

  • Government to Business (G2B): Government services provided to businesses.

  • Machine to Machine (M2M): Autonomous transactions between machines or IoT devices.

  • Machine to Citizen (M2C): Interactions between individuals and digital systems or services.

A Multidimensional Digital Identity

In a digital world, individuals can wear multiple hats simultaneously. As a single person, I may interact with my healthcare provider, engage with my employer, make purchases from a commercial entity, pay a bill, or apply for a government grant for my small business. I am, at once, a citizen, an employee, and an entrepreneur. I may also need to act on behalf of an organisation or another individual.

With so many layers of identity, digital systems must adapt to different contexts and levels of verification. For digital identity to be truly portable, secure, and trusted, it must be able to prove an individual’s credentials across various domains in a seamless manner.

The Path Forward: Common Standards and Integration

As digital identities increasingly interact across various sectors and roles, there is an urgent need for a unified approach. Technology solutions should not be developed in isolation. Instead, we need a common set of standards for digital identity that allows seamless integration across platforms, organisations, and services.

The future of digital identity lies in building systems that are not only secure and private but also flexible enough to accommodate the evolving digital landscape. By doing so, we can ensure that digital identity empowers individuals while reducing the risks of fragmentation and security vulnerabilities.

← Back to blog