The development of digital identity in the Financial Service Industry: From an element that enables digital transactions to a new strategic asset for business

This paper aims to illustrate how digital identity has become an important element of business transformation in the financial sector and how digital identity is evolving from an asset to support business in a new revenue stream. In an increasingly digitised world, the trusted digital identity assumes the important role of enabling the legal validity of any type of digital transaction. This centrality has attracted huge investments by companies to make the onboarding of online customers and the release of digital credentials to their customer base increasingly effective and frictionless, while preserving compliance and user experience. We illustrate the main models adopted in the current context in which a progressive transfer is taking place from identification processes helped by specialised staff to completely unattended processes. Finally, we show how the digital identity evolution is moving to a new paradigm that will revolutionise the approach to digital identity management. Thanks to the development of Blockchain technologies, digital identity is evolving even further. In the self-sovereign identity (SSI) vision, digital identities will no longer be merely an element to support commercial transactions but a new strategic asset to leverage in order to generate new business. This new paradigm will offer a new business opportunity to banks that will allow them to capitalise their information assets securely in full compliance with the privacy protection regulations, General Data Protection Regulation (GDPR). In the new SSI paradigm, digital identity management of the customer base represents the asset around which financial institutions must leverage to create new value, develop new business models and generate new revenue streams.