This CBoxx Briefing Paper is for innovators at UK financial institutions. It takes the idea of a Decentralised Financial Passport to illustrate the concepts, opportunities and challenges around decentralised identity, then presents a roadmap for industry adoption.
Regulated financial institutions must, by law, operate expensive, time-consuming customer due diligence processes (KYC, KYB etc) to continuously understand who their customers are. Those customers are increasingly managing their finances from smartphones and soon they will be doing that without passwords, pin numbers, memorable questions or ever having to rekey their identity data. There will be no need to rely on paper credentials or overshare personal information; this will be liberating for both customers and financial institutions.
The Decentralised Financial Passport concept relies on decentralised identity technology and the open standards that are fast becoming real world infrastructure. This new global identity layer enables reputable institutions to issue portable digital identity credentials that are controlled by their customers. This streamlines onboarding, reduces complexity, reduces costs and vastly improves data security. New revenue streams and business models will emerge.