How Can Reusable IDs Transform Your Identity Verification Process?

Identity verification is a fundamental part of our daily interactions, whether opening a new bank account, checking into a hotel, or making an online purchase, identity verification is essential. Indeed, traditional methods of verification are often slow, repetitive, and fraught with security risks. Enter reusable IDs – solutions which are designed to take on such challenges.

The Problem with Traditional Identity Verification

• Repeated ID Requirements:
  
  
  • Users are often required to present more than once their identities such as driver's license, national id, or passport for KYC (Know-Your-Customer) checks when registering with any service provider(s).
     

Costly Verification Processes: Business entities face higher cost (in terms of expense and time required) in confirming the identity of the same person across different platforms. According to industry reports, large financial institutions potentially spend in the range of $250  to $500 million annually on maintaining KYC and AML (Anti-Money Laundering) compliance. For the top 10% of these institutions, this figure can reach about $100 million​. Source

• According to a whitepaper published by Consult Hyperion, a single KYC verification can cost between $13 and upwards of $130. For example, if a customer is required to complete five separate KYC verifications for the same bank, the bank incurs a total cost of $65. However, by implementing reusable identity as a service, the bank only needs to verify the customer once, keeping the cost at $13 and saving significant resources. This not only reduces financial outlays but also frees up personnel for more strategic tasks.
   
• Consider the impact on a bank with 100,000 customers:
  
  
  • Without reusable KYC, verifying each customer five times costs the bank $65 per customer, totaling $6.5 million.
  • With reusable KYC, the cost per customer is reduced to $13, resulting in a total cost of $1.3 million. 

This translates to a potential savings of $5.2 million, illustrating the substantial financial benefits of adopting reusable KYC solutions on a large scale. 

Complexities in Online Verification: While in-person identity verification is straightforward, verifying identities online presents significant challenges. According to a Moneycontrol report in 2019, the global commercial banking sector suffered a significant loss of USD 3.3 trillion due to abandoned onboarding applications.

• Reliance on Physical Identification:

Despite technological advancements, there is still heavy reliance on physical IDs, like birth certificates and driver's licenses, in the digital world.

Introducing Reusable IDs: A Modern Solution

What Are Reusable IDs?

Reusable IDs are secure, portable and interoperable digital representations of a person’s verified identity. Instead of undergoing repeated verification processes for each service, users can verify their identity once and business entities can reuse this verified information across multiple departments. This innovation significantly enhances security, efficiency, and user experience.

How Do Reusable IDs Work?

Reusable IDs combined with advanced technologies like Decentralized Identifiers (DIDs), Verifiable Credentials (VCs), and digital wallets ensure secure and privacy-preserving identity verification. After a user proves their real identity through an ID verification service by submitting legal ID and taking a selfie, their verified identity is stored securely in a digital credential within a digital wallet app.

This clearly departs from traditional practices where every institution verifies new customers individually. This allows securely sharing of verified identity data across institutions with user consent and reduces redundancy to enhance operational efficiency and security.

The Advantages of Reusable IDs

• Enhanced Security:

The advanced encryption and authentication technologies used in reusable IDs reduce risks of identity theft and other fraudulent activities that could arise from having multiple verification channels. It ensures privacy attributes through zero-knowledge proofs, selective disclosure, and other equivalents that allow the user to only disclose very relevant information while maintaining privacy.

• Streamlined Operations:

By eliminating redundant verification steps, reusable IDs reduce administrative burdens and operational costs. Businesses can reallocate resources more effectively, improving efficiency and customer service. Standardized verification procedures also simplify compliance, ensuring consistent and reliable identity verification across different institutions.

• Improved User Experience:

Reusable IDs offer a better user experience by making transactions much easier and simplifying onboarding processes. The ability to use just one verified identity across services promotes trust and loyalty with customers. Additionally, reusable IDs empower users to control their personal data, deciding who has access to their information and when.

• Sustainability and Alignment with SDGs

Implementing reusable IDs contributes to environmental sustainability by reducing the need for paper-based verification processes. By transitioning to digital identities, organizations can significantly decrease their paper consumption, which supports Sustainable Development Goal 12.5. This not only minimizes the environmental impact but also aligns with global efforts to promote sustainable practices and reduce waste.

Real-World Applications and Benefits

• For Financial Institutions:

Reusable IDs ease customer onboarding, saving time and resources spent on repeated identity checks. This enhances operational efficiency due to a reduction in time and resources spent on manual verification, improving customer satisfaction and experience. This also reduces the costs incurred from several verification events.

• For E-Government Services:
  
  
  • Through digital channels, governments can increase value-added services such as e-filing of taxes, issuance of permits, and even voting. Using reusable identities, a citizen can securely engage in such services digitally through their pre-verified digital identities.
  • Rather than repeatedly providing and verifying personal information for each government interaction, citizens benefit from the simplicity of using their verified digital identity. This approach streamlines access to government services online, promoting efficiency and user convenience across diverse digital platforms.
• For Healthcare Providers:

Reusable IDs enable quicker access to services by verifying patient identities swiftly and securely. This approach enhances patient care and simplifies compliance with privacy regulations that protect crucial medical information.

• Verifying Age for Online Services:

With reusable identities, users can confirm their age for restricted online services, such as buying alcohol or viewing adult content, without revealing other personal details. This approach protects user privacy while meeting legal requirements, offering a secure and efficient solution for age verification.

Advantages of Reusable Identities for Businesses

• Cost Effective Solution:
  
  
  • Reusable identity solutions offer substantial benefits for both consumers and businesses. For businesses, they provide an effective cost solution for authenticating users without storing sensitive data.
• Enhanced user experience:
  
  
  • A smooth user experience is crucial for customer acquisition, studies indicate that many potential customers abandon sign-up processes due to poor user experiences. 
  • Simplifying the sharing of verified IDs with new service providers reduces friction, building on users' initial efforts in document and facial verification. This streamlined approach not only boosts customer satisfaction but also enhances operational efficiency for businesses.
• Driving Revenue Growth:

According to research by McKinsey, even a slight improvement in customer satisfaction during onboarding—measured on a scale of ten—can lead to a 3% increase in customer revenue. For a company earning $500 million from new customers, each incremental satisfaction point translates into an additional $15 million in potential revenue. This underscores the importance of prioritizing customer satisfaction during the initial user experience to drive substantial revenue growth.

• According to Gartner Research, over half a billion people will be using verifiable credentials by 2026, and the decentralized identity market is projected to be worth over $3 billion by 2031. This rapid growth in the market suggests significant opportunities for businesses that leverage reusable Identity softwares, positioning them to capture increased market share and drive substantial revenue growth.

Conclusion: Embracing the Future of Identity Verification

Reusable IDs represent a transformative shift in identity verification, offering unparalleled security, efficiency, and user convenience. By addressing the pain points of traditional methods, reusable IDs empower businesses to enhance operational standards, comply with regulations, and build stronger customer relationships.

CREDEBL is designed to transform your identity verification process with its innovative reusable ID solution. Leveraging advanced technologies, CREDEBL provides secure, efficient, and user-friendly verification, helping businesses enhance their operations and build stronger connections with customers. As an open-source platform and a recognized Digital Public Good (DPG), CREDEBL offers transparency, accessibility, and widespread adoption, making it an ideal choice for organizations seeking reliable and advanced identity solutions.

With CREDEBL, sensitive information is protected with features like Zero-Knowledge Proofs and selective disclosure, ensuring that users control their personal data and share only what is necessary.

Ready to revolutionize your identity verification process? Contact us today to discover how CREDEBL can transform your operations and elevate your customer experience.