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Brexit and digital identity – avoiding future restrictions on digital trade

The UK has been a major contributor to European efforts to establish cross-border digital identities. Governments need to ensure that Brexit does not introduce unwanted restrictions that harm digital trade

Regardless of your position on Brexit, the need for frictionless trade and cooperation across borders is critical for all nations. While this interaction is increasingly underpinned by digital technology, the notion that the internet has no borders, is not policed, or that e-commerce is any different, is flawed.

Unfortunately, the necessary cost of doing business and fostering international cooperation is not without friction and involves negotiating complex national and international regulations and tax schemes, as well as dealing with cultural differences. It is therefore highly likely that scrutiny of cross-border trade will only grow as the pace of digital transformation across society takes hold.

So how can commerce and cooperation be facilitated while mitigating risks and preventing fraud? To be competitive, any organisation must balance compliance, exposure to fraud and ever-greater customer reach with streamlined, secure onboarding processes and immersive customer experiences to attract and retain customers and protect its assets.

To achieve this, services must prove that individuals are who they claim to be when they transact, or prove something about an individual such as their age, when they purchase goods or services. In essence, these scenarios utilise what is more commonly known as digital identity.

Trusted digital identities

Some of the most trusted digital identities in the world have been developed in Europe, which has been at the forefront of creating legislation to enable frictionless international interaction and e-commerce.

The eIDAS Regulation enables and governs how state-sponsored digital identities can be used across all the member states of the European Union (EU).

EU citizens will have the ability to use their state-sponsored digital identity to access public digital services anywhere in the EU, while ensuring that digital service providers have a trusted legal way of identifying any particular individual. The eIDAS Regulation also facilitates cross-border trade by consolidating laws to enable all parties to create and receive legally binding electronic signatures.

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As a current member state, but with Brexit looming, the UK has been an active contributor throughout the definition, development and implementation of the eIDAS Regulation.

The UK government’s commitment to digital identity is further illustrated in Theresa May’s proposals for a future relationship, which describes an aspiration to recognise “equivalent forms of electronic ID and authentication, ensuring that these are secure, trustworthy and easy to use across borders”.

The UK government has submitted notification into the eIDAS Regulation of the UK’s federated identity scheme Gov.uk Verify, which enables UK citizens to access EU-based services, and UK online public services to accept EU issued identities. HM Revenue & Customs has already enabled German citizens to access their UK personal tax account using their German digital identity.

But it is important to understand that the eIDAS Regulation is not just for the public sector, as it also provides a holistic approach to the creation and use of digital identity across society as a whole.

Across the private sector, financial services are already aligning regulated processes such as customer onboarding, where proving identity is mandated, so they have the capability to be recognised cross-border – for example, opening an online bank account from another country, as referenced in the fifth anti-money laundering directive (Article 13(1) amendment).

Post-Brexit digital trust

So while Europe as a whole has been instrumental in helping to establish legislation and a trust framework to facilitate both international cooperation and frictionless trade using electronic identity and signatures, it remains unclear whether the UK will retain access to the eIDAS Regulation after Brexit. If access is denied, then neither the UK nor the EU would be able to accept these highly trusted state-sponsored digital identities and the verification of individuals would have to be duplicated in equivalent processes.

So how will businesses get the trust they need in their potential customers in a post-Brexit UK? How will they be able to use electronic identity in cross-border areas such as patent, legal or pharmaceuticals, and how would a business identify itself to overseas partners in the future?

How Brexit develops could have long-term effects on international trade and the digital economy, and so it is imperative that both the UK government and the EU continue to jointly recognise the importance of cross-border digital identity and ensure that this leading European initiative supports the needs and aspirations of UK and world economies.

The ID Crowd is a group of internationally recognised experts with hands-on experience of creating national and international identity schemes such as Gov.uk Verify and the eIDAS Regulation, as well as contributing to global identity standards as published by ISO, NIST, and the UK Cabinet Office.

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