Digital identity

Data is a cornerstone of today’s economy, driving innovation, efficiency, and growth. In the UK, the data economy contributes an estimated 6.9% to GDP, highlighting its crucial role in boosting trade and supporting business operations.

To fully capitalise on data's potential, new strategies are needed to enhance decision-making, tailor products and services, and empower consumers to better utilise their personal data.

A key initiative in this transformation is the UK government’s Smart Data program, which focuses on data portability. This shift requires the adoption of advanced technologies that allow individuals to manage and control their data more securely.

Digital wallets, for instance, provide trusted storage for verifiable data, while data vaults offer secure spaces for people to store personal information. Additionally, digital IDs ensure secure authentication, verifying a person’s identity when accessing their data.

These innovations will enable consumers to easily prove their identity and share data as needed, creating more streamlined and reliable systems. This, in turn, will unlock significant opportunities for economic growth across industries such as fintech, payments, retail, healthcare, banking, and government. As these technologies evolve, the UK’s data economy can drive further innovation, efficiency, and competitiveness across sectors.

Digital Identities can potentially revolutionise finance and improve access to services, addressing critical challenges such as fraud, inefficiency, and lack of trust. A key benefit is the reduction of fraud across payments and the secure sharing of digital assets, fostering greater trust across applications and platforms.

Beyond fraud prevention, digital identities pave the way for new business models, improved operational efficiencies and financial inclusion for the unbanked population would also become more widespread. For instance, individuals without traditional documentation can access microloans or digital payment systems, empowering them to participate in the economy. Integrating smart contracts and blockchain technology further streamlines security and automates authentication processes.

A government-led national identity program, supported by trusted entities such as banks, is vital to driving growth in the UK and globally.

Countries like Estonia, where citizens use digital IDs to vote online, pay taxes, and access healthcare, and India, with Aadhaar — a biometric-based system connecting millions to essential services — highlight the transformative potential of such initiatives. The UK must also prioritise this initiative to remain competitive in the evolving global digital economy.