Building Ethical Digital IDs in Partnership with Consumers

Guest blog from Finbarr Murphy at ModularData as part of our #UnlockingDigitalID campaign week 2024.

Digital Identities (or Digital IDs) are a natural progression, considering our identities are no longer limited to physical documents, but are woven across a plethora of public and private sector online systems. They are an opportunity for interconnected experiences online and are a key for consumers to access the digital economy and a wide range of services, from banking to healthcare.

Critical to their success, however, is consumer engagement. People must trust how their Digital ID is being managed and used – and trust is something that must be earned. How can we build the case for Digital IDs with the wider population? We must build with ethics and inclusivity in mind.

How to centre the consumer in digital ID design

Digital identities represent aggregated personal data on consumers, which makes their ethical management paramount. Ethical digital identity systems must prioritise user rights, protect personal data, and operate transparently. Ensuring the ethical use of data in digital identities helps to build trust and prevents misuse, discrimination, or unauthorised access.

By centring the consumer, their rights, experiences, and trust, we can build digital identities that people will engage with. When consumers are confident that they understand and trust in how their data is used, they’re more likely to engage with digital identities. KPMG found that 40% of people don’t trust companies to use their data ethically, and 30% refuse to share personal data for any reason (KPMG, 2023). Trust and engagement are clearly linked, so what can companies do to ensure people trust and engage with digital identity systems?

Data privacy and protection

One of the most crucial elements to consumer centric design, is ensuring that their data is kept private and protected. This requires several layers of planning, including:

Legal compliance: Robust policies that adhere to data protection policies such as GDPR and CCPA ensure that consumer rights are respected, and data is handled responsibly.

Informed consent: Keeping consumers informed about how their data is collected, used and shared is vital, with the ability to withdraw consent, within reason, at any time.

Data minimisation: Only collecting the data necessary for identity verification and service delivery limits the volume of stored personal information and reduces the risk and impact of data breaches.

Secure data storage and encryption: Securely storing personal data with advanced encryption measures helps to protect against unauthorised access.

Anonymisation: Anonymising data, when possible, minimises the exposure of individual identities, and enables valuable insights to be drawn from ethical, anonymised, aggregate data.

Handling data with transparency and accountability

Key to building consumer trust in digital identity systems is transparency around data use – how it is handled, what it’s used for, and who’s accessing it. Clear data lineage is important, as it shows where data originates from and how it is being used. Audit trails that track access and data changes can also help to maintain accountability. These make it easier for independent audits to review data handling from an ethical perspective and adherence to data privacy standards.

Inclusivity and accessibility

For a digital identity system to be inclusive and accessible, the barriers for use need to be considered and planned for. For instance, for people with disabilities, user interfaces must be designed with accessibility in mind and follow universal design principles, including features such as screen readers and intuitive navigation without overly long or complex user journeys.

To ensure that vulnerable people are not excluded from the digital economy or accessing vital public services, it’s important to consider offline options, such as SMS-based verification or offline registration centres. Additionally, when trying to build for everyone, consideration should be given to the types of documentation required to prove identity, and whether there are socio-economic or cultural differences in how easy this process is to navigate.

Mitigating bias with a focus on fairness

Whenever we’re shifting to use technology, including AI, over human processes, we must be alive to the potential flaws and risks of this move. Technology should be used ethically, especially if it is to gain the trust of consumers, and this is something I’m personally incredibly passionate about.

The potential for bias is one of the biggest blockers that needs to be addressed with Digital Identities. There are some high profile, notable cases, such as facial recognition software performing worse with people from black ethnicities. Therefore, any system that processes identity data must not only be rigorously tested before release, but also regularly assessed for bias. We also need to ensure equal data access, mitigating discrepancies in data collection or analysis to ensure services are accessible for all consumers who need them.

Some practical steps to create ethical Digital Identities

Consumer control: First up, give consumers control over their own data. When people are empowered to have control over their data, it builds trust in the digital identity ecosystem and enhances engagement. Users should be able to move their data between services and platforms, with tolls available to manage, update, and delete their personal information. This creates a more transparent and collaborative digital identity ecosystem, one that is built in partnership with consumers themselves.

Strong security measures: It goes without saying, but data security is essential for the integrity of identity systems. Multi-factor authentication, for instance, adds layers of data security to protect consumers’ data and helps to build their trust. And regular audits to verify the integrity of stored and processed data keeps records accurate.

Community engagement: Engaging with the community you serve helps to align digital identity systems with consumer needs, build trust and usage of the system, and ensure inclusivity in data policies. It’s important to engage with a diverse range of community groups as opposed to smaller sample sizes, to address the needs of underrepresented communities. However, this should be an open dialogue, with consumers educated on how their data is used to build a more informed user base capable of making better decisions on their digital identity.

Sustainability: A sustainable digital identity system must work for the present, whilst being adaptable for the future. Using a modular architecture enables scalability in future data volume and service need without the need for a complete redesign. And adopting energy-efficient data storage solutions can minimise the environmental impact whilst maintaining seure and reliable data management.

Conclusion

Digital identity systems can simplify access to services for consumers and improve efficiency for both public and private sector organisations. However, managing data ethically and ensuring inclusivity is vital to avoid exacerbating existing inequalities and violating individual rights. By prioritising privacy, data transparency, consumer empowerment, and community engagement, we can develop digital identity systems that are not only effective but also equitable and reliable. Establishing such systems is crucial for building a data-driven society that benefits everyone.

In this evolving landscape, Modular Data stands at the forefront of delivering scalable data and AI solutions that empower organisations across sectors. By focusing on immediate gains and long-term innovation, Modular Data is helping its clients navigate the complexities of data and AI, ensuring they unlock the full potential of their potential.

Welcome to techUK’s 2024 Digital ID Campaign Week! On the 14-18^th Oct, we are excited to explore how our members are increasing efficiency for both businesses and users, combatting fraud, as well as what creative and innovative ways our members are expanding our understanding of Digital Identities.

Whether it’s how we’re communicating, shopping, managing our finances, dating, accessing healthcare or public services, the ability to verify identity has quickly become a critical vanguard to the Digital Economy.