Redefining identity: From physical boundaries to digital freedom

As we shift from the physical to the digital world, our concept of identity is changing. Digital identities, or “digital twins,” are necessary for secure and efficient interactions, especially in the financial services industry. Well established as one of the most significant technology trends on the planet, a digital identity is a set of validated digital attributes and credentials for the digital world, similar to a person’s identity in the real world. Think of it as a detailed digital replica of a person, real-life organization, and even a product. It makes sure transactions run safely and smoothly in both the physical and digital worlds.

Digital identities consist of three simple parts:

  1. Details of the entity, which contain specific information about the person- attributes such as a unique identity number, social security number, vaccination code, name, place and date of birth, citizenship, and biometrics.
  1. Verification by a third party to ensure authenticity, usually issued or regulated by a national ID scheme.
  2. Last but not least, trust. Users need to trust that the digital identity is secure and reliable.

Each of us has a primary identity that can be broken down into smaller parts, or sub-identities, corresponding to different aspects of our lives. These sub-identities make sure that our data is used appropriately and securely within each specific context.

Your work identity holds all your important work credentials, such as, your work email, job title, contract details, and any work-related certifications relevant to your job. With this identity, you can easily communicate with coworkers, access work files, and do job-specific tasks without worrying of mixing in personal data. For instance, your work identity might be used to access corporate resources, send emails from your professional email address, or log into company systems safely and securely.

On the other hand, your social identity can cover your social media profiles, personal email, and other social interactions. It helps keep your professional and personal lives separate, assuring your work data doesn’t get entangled with your daily social activities. Imagine using your social identity to log into social media platforms, engage online communities, or participate in online groups, forums and discussions without exposing work related information.

Moreover, your financial identity is made of your bank accounts, credit cards, and other financial information. It guarantees the safety of your financial data and the security of your financial transactions. You might use your financial identity when shopping online, managing your investments, or interacting with your bank. Finally, your civic identity can encompass a wide range of elements that define your individual relationship with your community and government, including voting records, civic duties, and legal documents.

Why bother with sub-identities?

First, security. By compartmentalizing your data, you lower the risk of a single breach compromising all your personal information. If one sub-identity is compromised, the others stay secure.

Second, privacy. Sub-identities help keep your privacy by making sure that only relevant data is shared in each context. Your employer doesn’t need access to your social media profiles, and your social media platforms don’t need to know your banking details.

Third, convenience and mobility. Sub-identities make it easier to manage different aspects of your life. You can seamlessly switch between your work, social, and financial identities, making certain that every interaction and exchange is safe and secure. By 2021, over 5 billion people had internet access, with 92% using mobile devices. This mobile-first world necessitates mobile-based digital identities.

How much does digital security really matter?

Keeping digital identities secure is vital for all kinds of organizations, from governments to small businesses. Remember the 2017 WannaCry ransomware attack that disrupted the UK’s National Health Service? Or the steep fines businesses face under GDPR for data breaches? The risks are real. A 2023 report by IBM and the Ponemon Instituterevealed that the average cost of a data breach rose to $4.45 million, indicating a 15% increase since 2020. Evidently, the financial stakes of poor digital identity security are high.

The capacity to create several identities according to your own needs and desires, along with sovereignty over your own data, is what we at PixelPai believe will shape digital identity in the future. This belief is critical in the context of GDPR and the movement towards Web3. With the rise of Web3, we’ve seen unexampled flexibility and creativity in finance, but most importantly, emphasis on self-sovereign data. Despite its innovations, currently, Web3 still relies on centralized structures for social identity verification, replicating old limitations. This reliance presents a choice: we can embrace the digital shift and strengthen the security of our identities, or we can resist and become easy targets for fraud and insecurity.

As we explore the potential of decentralized societies, as outlined in Vitalik Buterin’s Decentralized Society: Finding Web3’s Soul paper, it is clear that we are not yet fully prepared for such a transition. However, the gradual shift towards decentralization is inevitable. With the advent of self-sovereign identity (SSI) technology, individuals can now take unprecedented control over their identity and data.

At PixelPai, we support this transition in spirit and practice with our Identity as a Service (IDaaS) platform. Our system offers both decentralized and centralized identity management, identity verification, and credentials management. This infrastructure makes sure that users have control over their data, can give informed consent for its use, and monetize it where appropriate.

By simplifying identity management, our IDaaS lets you focus on growing your business. Beyond basic verification, our technology digs deeper with similarity scoring and pattern recognition, refining identity authentication to near perfection. This not only boosts security but also builds confidence in every transaction within your digital ecosystem.

PixelPai supports various industries, from gaming and sports tech to fashion and IoT data monetization. For example, in gaming, our blockchain technology handles high volumes of microtransactions and cross-border payments securely. In fashion, our digital twin technology tracks the lifecycle of products, ensuring transparency and trust in the supply chain.

What’s our main takeaway here?

Embracing digital security measures is like locking your front door at night. It’s a simple step, but it goes a long way in keeping you safe. On the other hand, ignoring precautions is equivalent to leaving your door ajar and inviting anyone to come in.

By enabling more safe, effective, and inclusive interactions, digital identities are reshaping the financial services industry. As we move towards a completely digital society, the need for robust, interoperable, and privacy-focused identity systems will grow more and more important. PixelPai is ready to lead this charge, offering the tools and expertise needed for success in a  fast changing digital economy.

Ready to take control of your digital identity? Don’t wait until it’s too late! Reach out to us today.