On May 14, the government finally shared its vision for the digital identity market, clearing up the uncertainty that’s hung over it for months. Investors had pulled back, and identity service providers (IDSPs) paused their plans, all waiting for this announcement.
Now, IDSPs are diving into what the government’s digital wallet means for them and how it will shake up the landscape. They’re re-evaluating their business cases. The meeting on May 14 is a promising sign that relations between the government and the identity industry are improving. The Secretary of State, Peter Kyle, acknowledged the challenges his decision in January to introduce the Gov.uk Wallet posed for the industry.
Identity may seem straightforward, but it’s tangled up in complexity. Both the government and industry need to tackle these issues jointly. They can learn from past experiences to create a more stable future.
Imagine the government’s digital wallet and credentials as a stabilizing force, much like the Bank of England in finance. Retailers can’t directly see what’s in a person’s wallet. Instead, they go through a registered digital verification service (DVS), which serves a role akin to retail banks. The Office for Digital Identity and Attributes (OfDIA) is similar to the Financial Conduct Authority (FCA), but it’s not independent. This is a challenge for future generations to address.
The banking system provides a useful model for how identity and personal data can develop, where data is owned by the individual, securely stored, and shared only when desired.
What’s exciting is that the UK is a leader in fintech and regtech, outpacing even Silicon Valley. The real strength lies in London’s expertise built from years of financial trust. This is a chance to unlock a sovereign identity market.
In contrast to the tech giants with global platforms, the UK has the means to create a balanced data economy. This isn’t about surveillance or heavy-handed state control; it’s about building trust.
This partnership isn’t just important for digital identity; it’s crucial for the future of the UK economy. The potential to lead in creating a democratic data landscape is significant.
Now, the real work begins. For the past twenty years, the digital identity space in the UK felt isolated and underappreciated. However, a dedicated group has laid the groundwork for OfDIA, which opens the door for innovation in the private sector.
Digital identity is hitting the mainstream. New ideas tied to trusted digital credentials are set to arrive, but merely having identity isn’t enough. It’s about creating value.
Consider banking: customer-owned data sharing has far more depth than anything a credit agency can provide. If banks certified under the Digital Identity and Attributes Trust Framework (DIATF) and integrated a domestic PEP flag, they could save millions in compliance costs.
This applies to recruiters, NHS trusts, and universities. Integrating DBS certificates, HM Revenue & Customs data, and credentials into the wallet could significantly speed up hiring and onboarding if these organizations get certified.
We’re not just seeing gradual changes; we’re in a disruptive phase. Supply chains are shifting, new categories of identity services will emerge, and startups will swarm into the market. Those already in the identity sector must adapt quickly or risk being overtaken.
The goals ahead are ambitious. The government aims to introduce digital ID for age verification in alcohol sales by Christmas. With less than six months to go, it’s a tall order, but the urgency is positive. Even if everything isn’t perfect, it will push the system forward and encourage fresh collaborations.
More importantly, this initiative could help ease regulatory pushback against digital identity across the broader economy. Currently, regulators aren’t aligned, causing compliance teams to stifle innovation. Once the rules adapt, compliance experts could become facilitators, working alongside tech teams to enable business growth.
When regulators, compliance, and technology align, the groundwork is laid for real progress. Entrepreneurs and innovators will thrive with government support, marking not just an upgrade, but a complete transformation.
We can revitalize communities, even those left behind, by fostering new ways of working. No one should feel they need to leave home for opportunities.
May 14 could go down as a pivotal moment, reshaping government and the identity sector, and impacting the UK economy. This is before considering how personal-controlled AI could fundamentally change the landscape.
Kudos to Peter Kyle for making bold choices. This moment calls for cooperation between government and industry; the stakes are too high for division. It’s not only about digital identity; it’s about sovereignty and rebuilding trust in a data-driven age.
If we get this right in the UK, we could empower individuals and unlock opportunities, showcasing how democracy can thrive in the digital age. The game is on, and the potential is vast. Let’s step up.
David Crack chairs the Association of Digital Verification Professionals, representing companies involved in validating documents and digital identities.