How Blockchain Revolutionizes Identity Management

As we generate more data, our identities become more complicated. Traditional identity management systems simply can’t keep up with our evolving needs. Blockchain provides a decentralized, secure solution that fosters innovation and puts users back in control.

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We are on the brink of a politically, economically and socially fractured world. That’s why the World Economic Forum’s Annual Meeting 2018 theme, 'Creating a Shared Future in a Fractured World’, aimed at developing a shared narrative to improve the state of the world. Being a WEF Strategic Partner for 19 years, Accenture brings leadership for digital transformation at the intersection of AI and Future Workforce, redefining strategy, sustainability, and technology.

Digital identities and digital access and management systems are the cornerstones of our shared digital future. In a wide range of conditions, digital identity is vital for people and entities proving who they are. Besides safeguarding security, privacy and civil liberties for everyone, more than 1 billion people, including refugees, have no official ID. How can we offer a common solution available to every person and every organization?

Information is the lifeblood of the digital revolution. In recent years, data has revealed itself as the bedrock on which industries and markets of the future will be built. New technologies are allowing us to extract valuable insights from information more effectively than ever before, paving the way for unprecedented business models and value propositions. As a result, businesses in every global industry are embracing the concept of digital transformation and pursuing the opportunities that lie ahead.

However, the benefits of this new age are not limited to the titans of industry. For individuals, the digital revolution has just as much to offer – if not more.

Blockchain for good - Accenture Digital Identity

Our public and private identities are built on the events, contexts and attributes that shape our lives from birth onward. Think about information like names, dates, addresses, or sectors such as employment, education and health. With every change, we generate new information, leaving an ever-expanding digital footprint in our wake. At the moment, all that data is spread out across a multitude of isolated systems, each maintained by a different stakeholder. The government agency that issues your passport. The bank that provides your mortgage. Any public or private entity that delivers the products and services you rely on.

It seems strange, when you think about it. Where is all that information located? What purpose does it get used for and by whom? How secure is it? Who has seen it? And how up-to-date is it? Nobody really knows – neither do he individuals who generate the data, nor do the governments and industries that own the databases. It is literally out of your hands.

Blockchain has the power to put individuals back in control of their identities

But it doesn’t have to be. In a collaboration between the Heerlen Innovation Center for Smart Services and the recently-acquired Belgian digital agency Kunstmaan | Accenture Interactive, Accenture has demonstrated that blockchain has the power to put individuals back in control of their identities, while simultaneously improving their interactions with public and private service providers.

Improving Interactions for All Stakeholders

Recognizing the potential of the digital revolution to improve the lives of its citizens, the City of Antwerp began exploring new approaches to service innovation. A number of possibilities were identified, identity management being one that quickly rose to the top. Working with Digipolis, the city’s IT department, we asked ourselves how we might apply ecosystem-based solutions to this challenge.

Would it be possible to build a solution that allowed into manage their own identities securely? To store and share information about important life events at their own discretion? Could we hand the reigns back to the individual and create a trusted source of information for every interaction with public services and private business?

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By identifying potential use cases, we soon discovered the importance of having a single source of truth that enabled self-sovereignty and data integrity on a fundamental level. One perfect example of the complexities and sensitivities involved would be the birth of a child. Expectant parents have many interactions and touch points along their journey, from routine trips to the doctor to monitor the pregnancy, to hospital visits and prenatal services, all the way up to the birth itself and the subsequent creation of a brand-new identity for the baby.

In the traditional, siloed approach, there are new forms to fill out at every turn: when you register the child, when you apply for family benefits or when you sign up for daycare services. That data then vanishes into systems that are beyond your control. A solution capable of integrating all that data instantly and providing access on a case-by-case, need-to-know basis would provide benefits to parents, hospitals, government agencies, health insurance companies and daycare centers alike. And blockchain proved uniquely capable of providing such a solution.

A Framework for Self-sovereign or Self-managed Identity and Innovation

An identity management framework leveraging blockchain has many benefits for the stakeholders of the ecosystem, not least for the individuals themselves. With blockchain, you can choose to become the owner of your own data. Organizations no longer need to collect and store every identity data attribute and thus, no single party has power over your identity. You get to decide what identity data attributes you share with each organization.

You get to decide what identity data attributes you share with each organization

Government agencies will still be a critical source of trust of identities as they need to provide the important function of identity proofing and be a trusted verifier that you are who you claim to be and that your identity information is correct. As they do today, trusted organizations, such as governments, banks and so forth, would continue to be a source of trust of an identity. In the digital world, these trusted organizations would facilitate as an identity validator to other organizations.

The result? A safer, more efficient approach to identity management. When the clerk at the liquor store asks to verify your age, the current approach gives them access to far more information than they need. This opens the door for identity theft and other unpleasant consequences. In a blockchain world, the system will only display a simple “yes” or “no”.

Identity Fraud is similarly hampered by the fact that blockchain is inherently resistant to tampering. The architecture and approach to blockchain identity have evolved significantly, considering, among other things, the immutability of blockchain and the impact of data privacy. What data are stored on-chain, especially as it applies to identity is a critical point of consideration?

Blockchain also creates myriad opportunities for innovation. In Belgium, license plates are tied to the owner of the car, not the car itself. The same applies to parcels of land. This gives outsiders the ability to glean information about your life that you wouldn’t have shared otherwise. Conventional solutions cannot remedy this effectively, but blockchain isn’t limited to creating identities for people. It allows us to create identities for objects and areas as well, with full historical backgrounds. This eliminates the risks inherent in the current system while opening the door to entirely new value propositions. 

Identity Managment Powered by Blockchain - by Accenture

Opportunities for Business and Government

While it may take years for blockchain technology to mature fully, that doesn’t mean you can’t build exciting new solutions in the meantime. On the contrary: we developed our Life Event Management system for the city of Antwerp in only six weeks, building a fully operational proof of concept with a state-of-the-art user experience.

In fact, many blockchain solutions and applications are already perfectly feasible in the near term, and new opportunities will continue to present themselves as the underlying technology evolves. As the first popular blockchain solution, Bitcoin might get most of the attention, but cryptocurrencies are only the tip of the iceberg when it comes to innovative potential.

Insurance companies, banks and credit providers already have their eye on blockchain to speed up the application process and safeguard their clients’ data. In the fast-moving consumer goods industry, the technology can help trace ingredients from source to table, giving consumers valuable peace of mind that their food was produced ethically and in an environmentally responsible manner.

Blockchain is even providing new ways to deal with various humanitarian crises around the world. ID2020 aims to provide digital identities to the 1.1 billion people who currently live without officially recognized identification, helping to give them access to essential public services and address basic human needs that are currently left unmet.

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Embracing the Blockchain Mindset

The key consideration in all of this is not to focus on the technology. Blockchain is not a totem for progress and treating it as such will not bring the desired results. Rather, the focus needs to be on solving business challenges. The approach to blockchain should be part of a wider toolkit of technology that serves as part of a potential solution to the problems you face in your business operations. Or even better: as a solution to the problems your clients encounter.

Blockchain Identity Management Flow - Process Flow - by Accenture

Start by identifying the challenges you face and ask yourself if transparency, trusts, traceability, multiple stakeholders needing access to a single source of truth, are critical issues. If so, blockchain might offer value. Then, determine which blockchain solution will bring the best results. Prepare to experiment, as well. Select use cases and address the questions they pose by creating proofs of concept with inspiring, next-gen user interfaces. Iterate quickly and learn constantly. Your solution will evolve as you go, allowing you to add value every step of the way.

By focusing on building amazing user experiences and using blockchain as a tool to solve real-world problems, you will be able to create meaningful new services that make a positive difference in the lives of your customers. Ultimately, for all its power and potential, blockchain is still just a database with specific features. The way you put that power into the hands of your users is what will truly determine your added value.

Author: Tom Ghelen