October 11, 2021 at 5:00 am ET
You walk up to the bank teller and she asks to see your ID. You hand her your driver’s license, and with one glance she’s confident she’s talking to the right person.
This type of exchange is practically second nature, whether it involves applying for a loan or visiting a government office.
But what happens when you’re hunkered down at home and can’t get to the bank? What happens when the teller is teleworking and can’t see you or your driver’s license? How do you replicate that moment with the same ease, security and confidence for everyone?
The COVID-19 pandemic gave us a glimpse into that world and all its possibilities, magnifying the many challenges with our current system of digital identity in the process.
Weaknesses in America’s digital identity infrastructure have enabled cybercriminals to steal money from government assistance programs, as well as companies in the private sector. Identity theft losses soared by 42 percent last year, fueled by pandemic cybercrime and fraud. Meanwhile, have been unable to receive essential benefits after their applications for assistance were erroneously flagged for “fraud.” When attempting to rectify the matter, many victims became entangled in the convoluted, labyrinthine processes many states have put in place to verify identities.
America’s issues with identity are nothing new. The pandemic just drove home the point: Identity is critical infrastructure.
The challenge is the “identity gap” caused by the fact that all of our nationally recognized, authoritative identity systems — driver’s licenses, birth certificates and passports — have stayed stuck in the paper world while business has increasingly moved online.
The private sector has tried to fill the gap, and has come up with some novel and innovative solutions. But attackers have managed to keep pace with these safeguards. There is no substitute for the unique role the government plays as the only authoritative source of legal identity.
The good news is that these problems are not insurmountable. The United States can address its shortcomings by investing in a “digital first” identity infrastructure that lets any American ask an agency that issued them a paper or plastic ID — such as the Department of Motor Vehicles, the Social Security Administration or the State Department — to vouch for their identity in the online world.
It’s an idea based on a well-vetted, consensus proposal detailed in the bipartisan Improving Digital Identity Act of 2021 introduced by Reps. Bill Foster (D-Ill.), John Katko (R-N.Y.), Jim Langevin (D-R.I.) and Barry Loudermilk (R-Ga.).
At the core of this proposal is not just improved security, but also standards to ensure that new identity infrastructure is developed to enhance privacy. For example, it would allow Americans to choose which of their identity data elements are shared and ensure that they don’t fall into the wrong hands.
As we prepare to invest billions in more resilient infrastructure, it is essential that Congress and the White House ensure that every person, business, organization and agency in America can trust digital infrastructure to access secure, privacy-protecting identity services. Done right, the benefits of investing in identity infrastructure will extend beyond fraud reduction, with economists at McKinsey forecasting that U.S. GDP could grow an extra 4 percent by 2030. The private sector can also leverage it for remote identity proofing required for high-trust transactions in sectors such as financial services and health care. Digital identity infrastructure would enable faster, more innovative banking services, with credit interest rates and costs falling thanks to far lower fraud risks associated with such transactions.
The federal government could save millions annually by offering more online services. Government studies have shown that digital identity infrastructure could save the Internal Revenue Service alone more than $300 million each year. States and the federal government can leverage new identity infrastructure to enable more trusted digital services, cut down on fraudulent benefits claims and protect citizens’ information.
The Department of Homeland Security recognized the importance of identity in 2019 when it designated “identity management” as one of 55 National Critical Functions — services “so vital to the United States that their disruption, corruption, or dysfunction would have a debilitating effect on security, national economic security, national public health or safety, or any combination thereof.”
Treasury Secretary Janet Yellen highlighted the benefits of digital identity in February, noting “the same digital ID technology that protects against money laundering can also help us reach more people with relief.”
By investing in digital identity infrastructure, we will prevent costly cybercrime, give businesses and consumers new confidence, improve inclusion and foster growth and innovation across our economy.
Jeremy Grant is the former White House lead for the National Strategy for Trusted Identities in Cyberspace and is currently the head of the Better Identity Coalition, whose members include financial services, health care, identity management and cybersecurity companies.
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