Page 46 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

number of validation steps at the time of registration – ideally this is based on a national identity service,
preferably one that allows presentment and validation of a government-issued digital identity. However, an
emerging option is to have self-asserted identity attributes validated at a later stage by a governmental or
non-governmental organization.

Where no such national identity service exists, registration of customers for DFS is necessarily more complex.
This paper considers the issues in this area and makes a number of recommendations.

2 What is digital identity?

Robust identification systems are crucial for inclusive and prosperous economic and societal growth. Yet in the
developing world over 2 billion people lack formal means of identification . Historically, paper-based systems
3
and physical documentation such as national identity cards and birth certificates have been issued in order to
allow individuals to interact with government organisations during official transactions. However, the use of
these types of mechanisms is often flawed, with a lack of ubiquity and ease of counterfeit being commonplace.
According to a 2007 UNICEF report, as many as 70 per cent of the five million children born annually in Nigeria
at that time were not being registered at birth - notwithstanding improvements that may have been made
4
over the intervening nine years, those people unregistered at birth face being economically disadvantaged
for life, if steps are not taken to address their circumstances.

Advances in identification technologies have provided the opportunity to migrate paper-based systems to
digital identity mechanisms. The utilisation of identity via digital means or “digital identity” has the potential
to enable a wide range of potential benefits and to address many of the issues around financial inclusion.

2.1 Core definition

Articulation of the term “digital identity” can be found in various forms, though typically centred on the same
theme. The ITU definition of digital identity is provided in Recommendation ITU-T X.1252. Within the scope
of this paper, we use the term digital identity to define the various mechanisms of asserting and verifying
personal data attributes in the context of digital services and transactions. At a high level, it can be described
as a composite of three processes: Identification, authentication, and authorisation. The logical relationship
between these processes is illustrated in Figure 2.

Identification, authentication and authorisation are defined as follows:
• Identity proofing (as defined in ITU-T X.1254; often less accurately termed "identification”): This is the
process of identifying an individual or organisation (as defined in ITU-T X.1252), and formally establishing
the veracity of that identity. It may involve examining “breeder documents” such as passports and
birth certificates, consulting alternative sources of data to corroborate the identity being claimed, and
potentially collecting biometric data from the individual.

3 http:// blogs. lse. ac. uk/ humanrights/ 2015/ 05/ 28/ questions- of- legal- identity- in- the- post- 2015- development- agenda/
4 http:// www. unicef. org/ nigeria/ children_ 1930. html

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