Interoperability in digital identification brings together various platforms, improving security and user convenience
As of March 2024, internet penetration in India was 67 people per 100, with Kerala leading at 87 and Telangana at 83 per 100. Affordable mobile data prices have made it possible for more people to access the internet. According to the Telecom Regulatory Authority of India, the overall number of internet subscribers increased to 916.77 million by February 2024, up from 911.03 million in January 2024. The increase in Unified Payments Interface (UPI) transactions—from 92 crore in FY 2017-18 to 8,375 crore in FY 2023, representing a compound annual growth rate (CAGR) of 147 per cent—reflects the increased acceptance of digital lifestyles. Although Digital India initiatives have enhanced digital interactions across sectors like business, healthcare, and education, the digital identity landscape remains fragmented, with users still facing challenges in managing multiple logins and passwords, resulting in inefficiencies and potential security risks.
The core of today’s ‘global village’ depends on the seamless exchange of information, services, and experiences. The power of this concept is derived from its ability to work across platforms, services, and countries. The significance of interoperable digital identity lies in its enablement of seamless communication, data sharing, and collaboration among systems, technologies, and entities. The smooth operation of identification processes across various platforms, services, and geographies is guaranteed by this feature, thereby enhancing the overall efficiency of digital interactions.
Why is Interoperability Identity Critical?
Interoperability in digital identification brings together various platforms, improving security and user convenience. It reduces the need for multiple credentials and redundant data storage, lowering cybersecurity risks and streamlining user interactions. This strategy improves access to services across several platforms, from government websites to banks, resulting in a more seamless online experience. It also speeds up data transmission, simplifies onboarding, and ensures that sensitive information is only shared with approved parties. Furthermore, it allows users to manage several accounts, making digital services more inclusive and accessible.
Technologies Enabling Interoperable Identity:
General interoperability techniques and approaches continue to be critical for integrating identity management systems. Several technologies play an important role in making this integration smooth and effective :
Blockchain:
Ecosystem development is decentralized by the blockchain, with responsibilities shifted from a single central authority to various stakeholders. Real-time data sharing among multiple parties is allowed by this technology, eliminating the need for intermediaries. Moreover, the openness inherent in blockchain raises new questions about privacy and auditability.
API Gateway:
APIs and API gateways are considered critical to the development of interoperable identity systems. Standard interfaces are defined, complex communication is managed, and secure data exchange between platforms is enabled. This technique allows for improved data portability, reduces the need for multiple accounts, and simplifies the user experience.
Kavitha Kanaparthi, Founder and CEO of Soulverse says, “In today’s interconnected digital world, users need to create and manage numerous sets of usernames, passwords, and other forms of authentication. This repetitive process leads to password fatigue, security risks, and a fragmented user experience. Users can streamline their digital communications more efficiently by utilising the power of interoperable identity. From a business perspective, the need for interoperable identity is driven by the growing complexity of digital ecosystems such as multiple third-party services. Interoperable identity solutions help businesses streamline their operations, improve user experience, and enhance the security of their digital assets. Digital users need to protect their data, personal details, and credentials to ensure that they are safe from fraudulent scams in the online marketplace.”
“With traditional identity systems, the proliferation of usernames and passwords increases the risk of security breaches and unauthorised access. As per a study by IBS Intelligence, 40 per cent of business decision-makers suspected the increase in fraud as a primary challenge in identity verification for digital nomads. Whereas, interoperable identity solutions use biometrics for stronger authentication methods to enhance security and privacy. The urgency is also promoted due to the growing regulatory and compliance landscape. Governments around the world are imposing stricter regulations around data privacy and security, requiring businesses to implement stronger identity and access management practices further promoting the urgency to implement interoperable identity solutions,” Kavitha adds .
Akshay Garkel, Partner at Grant Thornton Bharat, highlights key aspects of India’s digital identity landscape. The widespread use of Aadhaar and e-KYC is revolutionizing digital lending, underwriting, and supply chain processes, boosting financial inclusion and trust. Critical platforms like Aadhaar, UPI, and DigiLocker are enhancing user experiences across banking, e-commerce, and supply chains.
AI-driven lending and automated risk assessments are reshaping the industry, with global standards for interoperable identity poised to transform cross-border transactions. Garkel emphasises the urgent need for interoperability to ensure smooth integration across platforms, reduce friction, and maintain compliance with privacy regulations like deemed consent.
As digital transformation accelerates, ensuring interoperability will be crucial for secure, seamless operations across sectors.
Kishan Sundar, Sr. Vice President, Chief Technology Officer – Key Accounts at Maveric Systems says “The rapid digital transformation across industries like finance has increased the need for seamless identity verification. Current fragmented identity systems cause inefficiencies, heightened cybersecurity risks, and compliance challenges. The lack of interoperability results in duplicate processes, inefficiencies, heightened exposure to breaches and fraud, and hence cyber security risks and compliance challenges. Emerging technologies like blockchain, AI, and APIs enhance these systems. For financial institutions, interoperable identity improves customer onboarding, KYC processes, and reduces costs, meets regulatory demands, like GDPR, and PSD2, and helps in enhancing the cross-border digital economy.”
India’s digital landscape has experienced substantial improvement, with services becoming more accessible and efficient. Bill payments have been eased by platforms such as the Bharat Bill Payment System (BBPS), which use BHIM-UPI, smartphone apps, and internet banking. However, actual interoperability between platforms is still a challenge due to variances in standards and protocols. Creating clear standards and secure data-sharing methods is crucial for overcoming these obstacles. Balancing user control over personal data with service provider needs will be critical. Building trust and creating robust governance frameworks will propel the future of interoperable digital identities while protecting privacy.
Originally Published in BW Security World
