Standard Chartered Bank’s Group CIO Dr. Michael Gorriz believes a universal digital identity could transform businesses around the world, and that financial institutions can help lead the charge.
The CIO is exploring a number of initiatives involving the technology, including a proof of concept project with fintech firm KYC Chain that harnesses the power of blockchain to improve the client onboarding process.
The technology lets Standard Chartered "recognise and verify identities of clients in a reliable and fuss-free way," says Gorriz, who was appointed to his role at Standard Chartered in 2015 after a seven-year stint as CIO at German automotive corporation Daimler AG.
"Blockchain allows entities that are independent of one another to rely on the same shared, secure, auditable source of information."
Standard Chartered is one of many banks with high hopes for blockchain. The distributed ledger technology has the potential to underpin the financial services of the future and help banks become primarily authenticators of our identities.
This role is growing more important as our lives become ever more digital. The majority of us already shops online, and the number of services we access and goods we purchase through the web is only growing. This leaves a complex web of personal information that a universal digital identity could untangle.
"These days, you are asked to create a new login when you apply for each new service, whether it is online shopping or food delivery," says Gorriz.
"So, you potentially have to log in your details a few times a day and to remember multiple passwords. A universal digital identity for everything would make life much more convenient.
"In a scenario where everyone has a universal digital identity, passports, driving licenses, birth certificates – documents that identify us in the physical world will no longer be necessary."
In his vision of the future, passport control will disappear as the digital identity renders checks redundant, while banking services become simple due to robust KYC (know your customer) processes.
Protecting the digital safety of customers while they make all these interactions will be no easy task. Blockchain could provide the underlying security, by creating a single, decentralised, immutable record of transactions.
The role of banks
Gorriz believes financial institutions will play a central role in managing our future digital identities, as they already have the expertise and systems to authenticate personal information and the experience navigating a variety of complex organisations around the world.
Standard Chartered has helped develop a number of pioneering digital identity initiatives such as PayNow in Singapore. This system supports peer-to-peer payments using nothing more than a user's national ID or mobile number.
"Financial institutions including banks have traditionally performed the role of custodians of data as they collect and verify identities when customers transact with them," says Gorriz, who has a background as a physicist and a PhD in engineering.
"They also have established cross-border operations.With banks already acting as stores of customer data, financial institutions are well-positioned to support the creation of [digital identity] systems. Additionally, banks are naturally incentivised to collect accurate data because the viability of their business depends on it."
Individuals will need to maintain ownership of their personal data, but this will become complex as it's shared across numerous bodies, such banks, shops, housing organisations and government bodies
“Achieving a universal digital identity would have many advantages but making it work would require cooperation among financial institutions, governments, technology companies and many other parties," says Gorriz.
“The benefits in terms of cost, time and user satisfaction are so great that we are optimistic that a comprehensive and holistic solution may not be too far in the future."