Blockchain and Biometrics: A Perfect Blend for Digital Identity Management


Identity verification – is part of security measures in various sectors. Whether it is the banking or travel industry, identity verification plays a crucial role in mitigating the risks that bad actors can bring with them.

The world is getting digitized at a high pace, hence, the incidences of digital frauds are getting advanced. For instance, digital banking is prone to several threats that extend from money laundering and terrorist financing to identity theft, account takeover, and malicious executable injections.

To combat financial crimes, digital banks ensure online identity verification by employing technologies such as Artificial Intelligence, Machine Learning, and many more.

Verifications and Managing Confidential Information

Identity verification in banks and other sectors is mandatory as per Know Your Customer (KYC) regulations, in the digital world it is a challenge. These challenges correspond to seamless online identity verifications and managing identity information in an efficient manner.

The highly confidential information of online customers includes both personal and financial information that is not less than an asset for the businesses. The thing is to make sure that no unauthorized entity could have access to this information that could tamper it, delete it or steal it.

The biometric authentication system integrated with the online platforms helps in controlled access over the online accounts and databases containing sensitive customer information.

Identity management – another concern, is driving the adoption of innovative solutions. Identity management holds importance when it comes to securing the data of customers from any fraudulent access.

As stolen data is used in many malevolent activities. For example, fraudsters use the stolen identity credentials to use them in digital fraud, to launder money, finance the acts of terrorism, create fake profiles in social media platforms and post junk information, spread misinformation and similar criminal activities.

Digital identity management requires a secure platform where no third entity will be allowed to access, edit or delete the customer data. Blockchain technology has paved the way for protecting the identities of customers by ensuring only verified users to access the content.

Issues with Existing Identity Management Systems

Before diving into the problems, let us conceptualize the issues with centralized identity management systems:

  • The identity information stored in a centralized database is tempered then all the information will be lost and will be unrecoverable.
  • Centralized systems have one point of failure, which is a honeypot for hackers and if it gets hacked
  • The information will be flushed from the entire system and the organization will no longer have access to it.
  • Hence, all data will be compromised that can cost organizations badly.

Most of the existing identity management systems are centralized that face the issues of mismanagement. The systems are vulnerable to third-party attacks and access.

Blockchain technology provides a decentralized space to protect customer information and to ensure integrity. Customer information is stored in a decentralized manner, which keeps in copies of information at different nodes hence compromising one point won’t affect the overall integrity of the database system.

Blockchain-based digital ID Verify management ensures user authentication where customer privacy protection is particularly given considerable attention. The following are some sectors that are suffering the issues of digital identity management and are switching to innovative solutions that could help them store customer information in a secure way.

eye, iris, biometrics

Government Sectors: The sectors store information of millions of identities. Among departments and government sectors, lack of interoperability leads to high costs in data management systems. As they are adopting digital solutions and thus require an efficient way of securing data.

Banks and Financial Institutions: The digital banking required innovative solutions that do not disturb the processes of customer due diligence for banks and help them adhere to the KYC and AML Solution compliance by employing innovative KYC solutions.

Online Businesses: The businesses have moved towards digital identity and collect information of customers at the time of account registration. As per the regulatory requirement of GDPR (General Data Protection Regulation), the customer information should be protected by all means against the cyberattacks and protection measures should be taken into account.

Medical Sector: The patient’s highly sensitive medical information is prone to hacking. The information contains patients’ medical records, insurance details and financial information which is tempting for online fraudsters as they can get the advantage of the medical benefits. Moreover, it can be a deadly situation for patients if their medical data tamper. The protection of patient data requires secure technology.

Industries are not limited to the above-mentioned ones. Globally, the institutions are adopting innovative solutions for efficient management of customer data and protection.

The Junction of Blockchain Cryptography and Biometrics in Identity Management

Blockchain is a decentralized platform that eliminates the risk of a single point of failure and maintains the availability, integrity, and confidentiality of identities. Ensuring controlled access can be well-achieved with biometric authentication systems.

Technological advancements are gaining ground in every industry. Technology is able to fight against the cyber threats, blockchain with a blend of biometric authentication systems are able to ‘allow only authorized entities to become part of systems and protect their identities in a secured manner’.

Most of the cyberattacks take place as a result of uncontrolled access over user accounts and hence this problem is settled using biometric authentication that verifies each onboarding identity against unique biological traits such as fingerprint, face recognition, iris/retina scanning, etc.

By allowing only registered entities to become part of the system, and preserving data in the blockchain were using strong cryptographic hash functions, the data is encrypted, digital identity can be protected.

Digital identity verification and its management are expanding the scope of state-of-art technologies; blockchain and biometrics.

Their intersection is opening opportunities for several business sectors that can stand strong against cyberattacks and suspicious activities. Hence, businesses can employ this combination, ensure security, KYC compliance, and a clean customer base while managing digital identities effectively.