Digitizing the Identity Verification Handshake

Recently Dr. Fauci, the country’s leading expert on infectious diseases, theorized that handshakes could be a thing of the past. Handshakes, of course, have been around for centuries. While the origin of shaking hands remains open to debate, many believe the practice started as a way of determining whether someone had a weapon in their hands.

No one in their right mind is shaking hands now. Anywhere. In the world. This has been the case for weeks. Keep in mind that neuroscientists say it takes approximately four weeks for new habits to form. With this in mind, post Corona, there is a real possibility that the habit of handshaking as a form of greeting, a means of demonstrating we are who we say we are, and a ritual many use to give their word and establish trust, is on its way out on a global scale.

We Still Need to Shake Hands Online

Like many things, offline interpersonal interactions have gone digital as a result of the virus. Furthermore, shelter-in-place orders have certainly accelerated the digitization of doctor’s appointments, legal agreements, and meetings between friends, colleagues, and family.

As a result, digital identity verification (IDV), which is how organizations verify identities in an online environment, is becoming an even bigger industry. A report from the McKinsey Global Institute, Digital Identification: A Key to Inclusive Growth, the consultancy estimates the size of the market at $20B by 2022. As the need to establish and scrutinize digital handshakes increases, the size of the identity verification marketplace will undoubtedly grow.

The more robust, secure, and easier it becomes to verify digital interactions, the better. According to our 7th Annual Fraud Report, 96% of businesses believe that IDV can serve as a strategic differentiator. Additionally, IDology’s Consumer Digital Identity Study found that 77% of Americans prefer companies that have advanced IDV, which is an increase from 38% of those surveyed in 2018.

Digital Identities Drive Economic Activity

The demand for IDV is a good thing for all concerned. McKinsey states that “good digital identities” could generate worldwide GDP of 3 to 13% depending on the country. The growth in GDP McKinsey forecast stems from greater access to legitimate consumers and easier onboarding through digital devices, such as smartphones. McKinsey also notes that good digital identities remove inefficiency from transactions, aka friction, and serve as a powerful means of deterring fraud.

Once this crisis passes, chances are people will resort back to many entrenched behaviors, including the use of a physical handshake to establish trust and verify goodwill. Yet, in many ways, life will look and feel different – particularly as it relates to the prevalence and sophistication of IDV. Hopefully, we’ll see the emergence of even stronger online handshakes in the form of robust digital identity verification, which could help serve as an engine for much needed global economic growth.

 

 

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