Financial Action Task Force (FATF) has released a new guidance report on digital identity as the number of digital transactions continues to rise.
The body claims digital transactions are growing at an annual rate of 12.7% and by 2022 an estimated 60% of global GDP will be digitalised.
Its new report outlines the basics of digital identity systems, case studies, principles on identification for sustainable development, digital ID assurance frameworks and technical standard-setting bodies and overview of US and EU digital assurance frameworks.
Two of the key points in the guidance refer to what governments, financial institutions and stakeholders should look for. The first is understanding the assurance levels of the digital ID system’s technology, architecture and governance.
Secondly, FATF states they should, given the assurance levels, determine whether it is reliable, and independent of potential risks that it is used to facilitate illicit finance.
FATF also stated that with 1.7 billion unbanked adults around the world and 26% of these claiming a lack of documentation as the barrier to, digital ID enables them to access financial services.
Earlier in the year, FATF added seven countries to its grey list, a register a comprised of nations with deficiencies in their anti-money laundering or counter terrorism financing protocols. The new countries on the list, which is currently made up of 18 countries, were Albania, Barbados, Jamaica, Mauritius, Myanmar, Nicaragua and Uganda.
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