Know Your Customer (KYC) has become an inescapable part of life. Financial institutions, governments, immigration services, and (in some countries) even mobile phone companies are asking for highly personal information to identify customers.
They don’t do it for fun, obviously, but instead to fight money laundering and terrorist financing. Whether these measures work is up for debate, but it is without question that KYC is here to stay.
Good intentions do not excuse poor execution however, and it seems obvious that asking companies to store vast amounts of highly personal data is a bad idea. Facebook, Google and Amazon are just a few of the multi-billion dollar platforms that have experienced significant data breaches in 2018. If these financial juggernauts can’t be trusted to keep your highly sensitive data safe, then what hope does the 5 person startup have? None.
So what is the solution?
The advantages of decentralized identity management
The reason why data breaches have become so common, is that centrally stored data silos are incredibly attractive targets for hackers and other malicious actors. Large volumes of contact information or financial data can translate into huge sums of money for those who have access. The solution to this problem is to store data locally.
By storing personal information on our local devices we increase the complexity for malicious actors to launch an attack. It is much easier to hack one database and acquire its contents than it is to breach thousands of personal devices and retrieve any valuable information.
Another disadvantage with the current system of digital identity management involves the lack of transparency. Once we register for a service, we let go of our personal data, which is typically stored on centralized servers and monetized. In the case of Google and Facebook your behaviour is logged and segmented for advertisers to target. That is why you might see location specific advertising while using either platform: because your information has been sold to the highest bidder.
You might think that you are only providing your name and email address, but in reality your locations, interests, contacts and much more are collected and used to generate revenue.
Monetization is not a dirty word, and you might wonder what all the fuss is about.
Well, the problem is the lack of transparency. You should be fully aware of the information that is being collected and in a position to grant and rescind access to that information.
This is why we built the SelfKey Identity Wallet.
What is the SelfKey Identity Wallet?
The SelfKey Identity Wallet is a free desktop application which allows you to easily manage your digital identity.
More specifically, the Wallet lets you save all the information which is typically required to register for a service on your local devices. All data and documents remain on your devices – not on a SelfKey server or on the blockchain. No one has access to your information but you and it can never be shared without your consent. This includes identification documents, proof of residence, name, email address and a host of other data points.
In the Identity Wallet, the collection of data points is referred to as your SelfKey ID.
As you can see from the screenshot provided above, the SelfKey ID comprises a number of KYC relevant data points, and can be easily managed through the Identity Wallet. Here you can upload documents, securely enter personal data and collect all the information a service provider might typically ask for.
How can I use my SelfKey ID?
The SelfKey ID is a crucial component of two features we will be releasing shortly:
The SelfKey Marketplace will allow you to explore, compare and sign up for service providers in over 10 verticals. Using the Marketplace you will be able to easily open a company abroad, get a second passport or register with an exchange. The advantage of the Marketplace is that it is significantly more convenient. Not only will you be able to find service providers more easily, but you will be able to use your SelfKey ID to skip the typically long KYC-onboarding process.
In addition to the increased convenience, you will also be able to enjoy much more transparency as to which information is shared. Below you can see a screenshot of the KYC requirements for one of the listed exchanges.
As mentioned previously, the SelfKey ID will also come into play for Login with SelfKey. Have you ever registered or logged into a service using Login with Google or Facebook? Well, as recent data breaches show, logging in with the help of centralized platforms like Google and Facebook poses significant security risks.
With Login with SelfKey you get the same level of convenience but with blockchain level encryption. More specifically, Login with SelfKey will be both a typical button viewable in the login area of partner websites, as well as a handy chrome extension. Both features connect directly with your SelfKey, meaning they only work if your ID contains the required information. Once your SelfKey ID is completed and these two features are launched, you will be able to conveniently and securely access partner sites.
Thanks for reading and don’t forget to download the wallet.