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Expert insights on digital identity

Caitlin Sinclair
Caitlin Sinclair
Director of Proposition Development, Financial Crime, LSEG

Traditional methods of establishing identity are often characterised by tedious, inefficient processes and poor client experiences. As digital identity verification methods continue to gain traction, many of these pain points are being addressed, but some challenges remain. Refinitiv participated in a recent ACAMS-hosted webinar, which saw a panel of experts examine some of the pertinent issues surrounding digital identity.


  1. Refinitiv participated in a recent ACAMS-hosted webinar. During the webinar, a panel of experts examined some of the pertinent issues surrounding digital identity, including the evolution of digital processes and the impact of government backing on digital identity adoption.
  2. Digital currencies have now become integrated in the global economy. This means we need to change the methods we use to prevent money laundering and fraud, while it has also led to a real imperative for the development of trusted digital identity solutions
  3. Digital channels were previously a preferable option in terms of their ability to attract and serve clients, but these have now become a business necessity.

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Digital processes are still evolving

The technology to support viable mass adoption of digital identity verification already exists, but it is important to remember that these digital processes are still evolving, and are not yet flawless.

The potential for fraudulent actors to penetrate the system still remains, which means that the relevant metric to consider is how digital verification – as opposed to in-person verification – fares when it comes to detecting illegal activity.

A good example is that of document authentication.

There remains a good deal of misconception around available technology and how well it performs. The key issue revolves around whether digital document authentication – that enabled with AI and digital forensic checks – is more effective at detecting fraud than a bank teller at a local branch.

Machines are better at detecting subtle anomalies, but very sophisticated digital tampering on documents may not always be detected. In instances such as these, other elements, including liveness detection and trusted source verification, become important parts of a robust solution.

Read about the Refinitiv Expert Talk: Identity fraud, COVID-19 and the pivotal role of digital identity

Expert insights on digital identity

Government backing will drive adoption of digital identity

The UK digital identity and attributes trust framework was released in February 2021 and sets out requirements for companies that provide or use digital identity services. The framework delivers an initial outline of what is expected to be enacted into law.

This government framework is expected to drive increased adoption of digital identity verification by providing clarity around the adoption of digital processes. It is important to note that the framework also needs to take into account the constantly evolving nature of what is possible in remote identification processes.

Watch: Refinitiv Perspectives LIVE – identity fraud during COVID-19: securing digital identity

The face of money is changing

Adoption rates for both decentralised cryptocurrencies and state-backed digital currencies are rising, despite differences in the ethos surrounding their adoption.

Key differences arise based on individual regulators’ definitions of the type of asset these currencies constitute. For example, in Singapore, the Monetary Authority of Singapore (MAS) defines cryptocurrencies as legal tender and therefore these currencies are subject to the same levels of due diligence and AML controls as traditional currencies.

Conversely, in the U.S., the Securities and Exchange Commission (SEC) considers cryptocurrencies to be securities and subject to a different set of regulatory requirements. This definition drives further downstream regulation of exchanges and e-wallet providers.

Irrespective of specific regulatory definitions and differences, digital currencies have become part of the new normal. Not only is this driving change in the methods we need to use to prevent money laundering and fraud, but it has also led to a real need for the development of trusted digital identity solutions.

How Refinitiv Qual-ID works. Expert insights on digital identity

More efficiency and a better user experience

Digital channels were previously a ‘nice to have’ in terms of their ability to attract and serve clients, but these have now become a business necessity.

Digital identification and verification processes are more efficient than traditional paper-based equivalents. They also deliver a better client experience and produce higher quality results.

For example, a primary pain point that leads to a poor client experience is passwords. Tokenized or biometric identification methods can help to resolve such basic pain points and create a differentiated client experience.

The digitalisation of processes can also promote a better user experience in other ways, including in the payments and transaction monitoring space.

An interesting capability that can enhance both fraud detection and the user experience is network analytics using AI on expansive datalakes. This brings together identity, transaction and behavioural data to help detect risk while eliminating some of the false positives that can lead to negative client experiences.

The digital identity space can deliver a truly differentiating competitive advantage for businesses. Many, however, still need to fully embrace digital tools. While FinTechs embody digital processes within their very fabric, many traditional banks are still struggling with implementation and should work to become more comfortable with the change agenda.

Read about the Refinitiv Expert Talk: Identity fraud, COVID-19 and the pivotal role of digital identity


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