Digital identity represents a major shift in how we interact with the digital world, paving the way for enhanced user experience and security.

There has been much progress, evolving from the usage of mere passwords and usernames to more sophisticated security markers like biometrics and those that use AI technology.

In the Asia Pacific region, governments are at varying stages of maturity when it comes to digital identity.

Some have even set ambitious targets, with the hope of strengthening digital connectivity and making life easier on the whole, for its people.

The State of Digital Identity in Southeast Asia

A clear leader in Southeast Asia, unsurprisingly is Singapore, which launched Singpass in 2003

Additional features have been progressively added to the Singpass app over the years to enhance its relevance.

Some of the current features of the Singpass include single-tap access to commonly-used government digital services such as checking one’s CPF balance, applying for an HDB flat, and performing online banking transactions.

One might also argue that it is the foundational layer that enabled digital banking to flourish in Singapore allowing for its citizens to seamlessly their bank accounts digitally.

Meanwhile, in Malaysia, progress for digital identity is also underway, Prime Minister Datuk Seri Anwar Ibrahim in December 2023 registered with the National Digital Identity, making him the first person in the country to do so.

Demonstrating its commitment towards the area of financial security, Malaysia’s Bank Negara announced in April revised requirements and guidance for the implementation of eKYC solutions for the onboarding of individuals to the financial sector.

Notably, digital IDs are used by banks for eKYC and authorising transactions. 

The central bank said the revised requirements and guidance seek to accommodate advancements in technology to facilitate the secure and safe adoption of e-KYC solutions for both individuals and legal persons while preserving the integrity of the financial system. 

The country’s  Digital Minister Gobind Singh Deo said in July discussions are ongoing on integrating MyDigital ID  with the banking sector as well as Touch ‘n Go, the Employees Provident Fund (EPF) i-Akaun and the Inland Revenue Board.

“Prior to this, the MyDigital ID team has had engagements with Bank Negara, banking service providers and related stakeholders to step up and expand the use of MyDigital ID in the banking and financial sectors.”

In the Philippines, The Philippine Statistics Authority in partnership with the Department of Information and Communications Technology, launched the Digital National ID this June, together with authentication platforms, National ID eVerify and National ID Check.

As of July 2024, more than 88 million Filipinos had registered with the Philippine Identification System (PhilSys) for a national ID, with a total of 52 million PhilID physical cards issued.

The Digital National ID supports the government’s strategies outlined in the Philippine Development Plan 2023-2028, a strategic framework designed to guide the country’s development over six years, with the ultimate goal of achieving inclusive growth, reducing poverty, and improving the quality of life for all Filipinos.

Battling the growing threat of deepfakes with digital identity

But really, how important is digital identity to a flourishing digital banking ecosystem?

Most agree that digital identity is the first and most crucial step in fraud prevention and banks must make the management of these IDs a priority by putting in place more robust authentication measures, and of course, monitoring them well.

Frederic Ho, who is the APAC VP at Jumio, a global provider of automated, AI-driven identity verification said that online identity verification plays an important role in digital transformation to ensure the transacting person is who they claim to be. 

He cites a Jumio 2024 Online Identity Study which revealed that 67% of global consumers (and 78% in Singapore) were concerned about whether their bank is doing enough to protect against deepfake-powered fraud. 

“By implementing biometric-based verification systems that layer in liveness detection and other advanced technologies to stop deepfakes, financial institutions can stay ahead of evolving threats, reduce fraud losses, and foster trust in digital banking channels,”

Ho says.

In Southeast Asia, where Jumio is an active player in the banking and fintech space, Ho says the regulatory environment has been supportive.

In Malaysia, he commends initiatives like Bank Negara Malaysia’s eKYC guidelines which foster the adoption of these solutions. 

Ho notes the company’s customers have been able to significantly improve their online user experience and customer conversion rates, and have also achieved compliance with AML/KYC regulatory standards.

He says  Jumio’s solutions are built on a foundation of compliance and security and have achieved key certifications like ISO/IEC 27001:2013, PCI DSS, and SOC2 Type 2, amid regular reviews of its security objectives, risks, and controls to improve processes.

Nevertheless, he says with consumers expecting a fast and seamless onboarding process,  banks have the pressure of striking the right balance between security and customer experience.

“To address these challenges, banks need to consolidate technologies and processes, partnering with global technology vendors like Jumio to automate compliance processes and strengthen fraud protection measures.

“Jumio’s eKYC solutions are designed to help organisations comply with the ever-changing regulatory landscape for customer identity verification, and have been audited by major global auditing firms and banks, demonstrating our compliance and reliability.”

Digital identity is a key piece of the financial inclusion puzzle

Similarly, in the Philippines, where a large portion of the population remains unbanked, eKYC has played a crucial role in enabling financial inclusion by allowing banks and fintechs to onboard customers remotely, Ho adds.

Aaron Foo, Chief Strategy and Product Officer at the Philippines digital bank GoTyme, offers some views on how digital identity fueled the growth of his digital bank.

He believes the adoption of digital banking and eKYC solutions helped the bank broaden its relevant reach to now virtually anyone in the Philippines and has been an important driver in its growth of a quarter of a million customers a month.

” What previously took trips to the bank branch, and 30 minutes to one hour of the customer’s and bank’s staff time has now all been compressed to less than 5 minutes of an account opening experience through eKYC. 

“We estimate that eKYC can reduce the cost of account opening by 5 to 10 times as compared to traditional bank branches.”

He says the ideal eKYC solution should have the ability to enable high-speed, low-cost, high-volume KYC with good accuracy.

“The importance of a robust eKYC goes beyond just the KYC process itself; it’s about developing a good understanding of one’s customer so that they can be serviced properly, provided (with) credit and given appropriate financial facilities and advice over time.”

Meanwhile, in Malaysia, progress for digital identity is also underway, Prime Minister Datuk Seri Anwar Ibrahim in December 2023 registered with the National Digital Identity, making him the “first person in the country” to do so.

Featured image credit: edited from freepik