Page 30 - FIGI: e-KYC use cases in digital financial services

specific industries (e.g., healthcare, financial services, Decentralized ID is a type of user-centric identity
etc.) that is created, owned, and managed by users of their
With ADIA in service and employing a global stan- free will (it is sometimes referred to as self-sovereign
dard, the various DID-implementing identity solu- identity). The user is identified with a Decentralized
tions will no longer have to be siloed ecosystems. Identifier (DID) which is globally unique. Each DID
Any Issuer or Service Provider wishing to leverage has associated cryptographic material that helps in
DID-based authentication or customer on-board- authenticating users and verifying credentials that
ing will also no longer have to "pick a winner" in the are issued to or presented by them. A verifiable cre-
space – hoping that they have chosen to integrate dential allows the user to digitally issue credentials
with the one "winning" stack. For Issuers, they will and sign it cryptographically, which can be verified
be able to trust that the credentials they issue will with the help of the distributed ledger or blockchain.
reach a potentially global audience of Service Pro- This ensures various credentials like educational
viders and likewise, Service Providers will be able to qualification, job history, personal details, licenses,
consume any type of ADIA-certified Verifiable Cre- certificates, etc., are accessible to the authorized
dential. With the associated personal identity data parties in a tamper-proof and authenticated manner.
(PID) remaining safely with the original identity Issu- A distributed ledger or a blockchain forms the
er, organizations within countries with strict data backbone of a decentralized identity system. User
export controls are still able to participate, since no DIDs can be private or public. Decentralized iden-
PID crosses borders. tity use for e-KYC will be strengthened for use if
Alongside the technology, there are standards the users acquire the credentials digitally the gov-
necessary for establishing "identity roles" or "what ernment organization as issuer. The credentials are
we do." With this system it is possible to create and acquired and stored digitally in an identity wallet.
use portable credentials that truly establish the hold- They can also be presented to financial services
er as a student or doctor (for example) – by lever- organizations where the verifications can be done
aging industry bodies that can provide definitions of digitally thus enabling remote onboarding and iden-
what constitutes legitimate and credential-able bona tity verification. This section considers requirements
fides to use such a title. Similarly, credentials which for a standard for decentralized identifiers using dis-
may be used for financial transactions can be estab- tributed ledgers and verifiable credentials for e-KYC
lished which meet global AML/CFT standards. for digital finance. The standard will address the fol-
lowing areas:

7 PROPOSED REQUIREMENTS FOR A STAN- • Creation of the decentralized identifier and
DARD FOR DECENTRALIZED ID FOR anchoring to be able to perform identity-related
E-KYC activities such as e-KYC;
• Issuance of the verifiable credential by the Issu-
The COVID-19 pandemic has accelerated the pace er, delivery of the verifiable credential and the
towards digitalization of government payments, recording of the information related to the issu-
from e-commerce to e-banking, remote onboarding ance of such Credential on the distributed led-
for digital finance, everything is getting transformed ger; and
digitally to make it easier and more convenient for • the Presentation process which is the most com-
users. However, with major security threats like mon action required by Verifiers to verify the
transaction fraud, identity theft, and other cyberat- user identity (e.g., e-KYC) before providing the
tacks compromising personal data of customers; it service.
becomes essential that actions are taken to protect
customer data and privacy in the digital interac-
tions. To counter these challenges, blockchain-based 7�1 Stakeholders roles and information exchange
emerging solutions like Decentralized Identity and Figure 12 shows the main roles of stakeholders
Verifiable Credentials has the potential to disrupt the involved and the information flow.
identity and verification domain by protecting data The main roles for the stakeholders and informa-
privacy, sharing data with user-consent and secur- tion flows above are described below:
ing transactions, while enhancing the overall e-KYC
process and user experience.

28 e-KYC use cases in digital financial services