tomorrow’s transactions today Single European Identity Area Can We Achieve A Single European Identity Area? Douwe Lycklama – London April 8, 2012

2 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved

3 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved

4 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. Douwe Lycklama, Innopay EE (engineering TU Delft, 1990) Consumer electronics background (Philips) Innopay since 2002: payments, e-identity, e- invoicing Passion for consulting and product development − Complex intangible products/services − Collaborative innovations “Make this world a (little) better place, with better services” Co-founder and strategist of the NL E-identity framework eHerkenning Member of SSEDIC Only just begun …

5 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Agenda 1.What is e-identity? 2.How is e-identity doing today? 3.The European way forward

tomorrow’s transactions today E-identity defined in daily use What is e-identity?

7 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Identity is all around us

8 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved First some Lingo…. Users: consumer or a person acting on behalf of a business or government Relying party: A party that want to know who is ‘knocking on his door’ E-identity: An electronic identity describes a subject (person, organisation or system) via its properties (attributes), in the online/mobile world, in a consistent and verifiable way Identification: Identification is the process where a user makes himself known to the relying party in order establish a connection or to gain access to the system/website/web service etc. Authentication: The process of making sure that an identified person or entity is indeed ‘the person who he says he is’

9 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Identity use: Trust, Compliance & Convenience Trust ComplianceConvenience

10 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Internet = customer not present

11 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved E-identity credentials exist in many forms

12 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. Why e-identity?UserRelying party Higher trustKnow who you are dealing with ComplianceObey the law Easy of use Be recognised & better services Better conversion & less costs Value drivers of e-identity

13 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. What makes a good service proposition? Source: Prof. Betty Collis, 1993 Profit PleasurePracticability

14 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. E.g. mobile telephony? BenefitRealised? ProfitMore efficiency in society, low cost PleasureUse everywhere, more contact, social interaction, global reach PracticabilitySimilar to ‘old telephony’, extend old habits

15 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. E.g. online banking? PromiseRealised? ProfitMore efficiency in society, no paper PleasureUse everywhere, global reach PracticabilityNew habits needed because of security

tomorrow’s transactions today Along the 3Ps How is e-identity doing?

17 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. How does e-identity score on the 3Ps? PromiseRealised? ProfitCost saving in business processes Better service quality PleasureUse everywhere, seamless working PracticabilityEase of use, easy to on board

18 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. More specific for e-identity PromiseKey issue to be solved Benefits (Profit)1.Cost saving in business processes 2.Better service quality Huge untapped potential due to low penetration, still many paper processes, lack of awareness Functionality (Pleasure)3.Reach for both users and relying party Fragmented solutions, silo thinking Ease of use (Practicability) 4.Limited barriers to on board and to use Many sign up processes, too easy means unsecure

19 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Key issue 1 and 2: cost and quality Cost saving: less paper, more straight through − Sign up − Log in − Digital contracting Better quality: ease of use for customer − Mobile: less typing small screens − Recognise returning customers, profiling Government policies geared toward digital services. Governments can enforce ‘adoption’ by killer apps (tax, permits, subsidies) Awareness in business relatively low, except in e-commerce sector  Huge market potential

20 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. Authentication Citizen Company Government Company Government ‘Mandate’ Key issue 3: the current market is full of silos Fragmented solutions

21 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Key issue 3: large number of passwords As a result customer are put up with large numbers of credentials

22 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved st generation e-identity: direct model

23 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved nd generation e-identity: platform User name / password Outsource EID function

24 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Key issue 4: ease of use Ease of use is a trade off with security − Avoid lengthy sign up processes − Security should be managed adequately

tomorrow’s transactions today Single European Identity Area? The European way forward

26 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. The key to EID success is Interoperability (…or the whole planet will have to sit with one provider)

27 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. The same key as to other two sided markets payments invoicing telecom …

28 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Why interoperability? Remember 3P’s Users: want to identify themselves with as much as possible relying parties − Want less passwords − Harmonised user experience  Maximise ease of use, minimise hassle Relying parties: want to identify as much as possible users − Want lower costs − Maximum audience  Minimise cost, maximise usage / sales / conversion

29 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. Interoperability in a fragmented market implies cooperation between competing parties

30 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. Cooperation on Business, functionality, infrastructure

31 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. Europe’s blueprint

32 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved rd generation e-identity: Trust Framework Identity issuer Identity router

33 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Remember payments ?

34 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Trust Frameworks: a few defined around across the globe Open Identity Exchange (OIX) − Different Trust Frameworks for different contexts − The U.S. Government ICAM Trust Framework, The Telcom Data Trust Framework, Respect Trust Framework − A Trust Framework is a certification program that enables a party who accepts a digital identity credential (called the relying party) to trust the identity, security, and privacy policies of the party who issues the credential (called the identity service provider) and vice versa. bankID − One Trust Framework developed by several large Nordic Banks − BankID is the leading electronic identification in Sweden, and is used for multiple context − Nine issuing banks, just banks… eHerkenning − One single trust framework for multiple contexts − A Trust Framework is a coherent set of agreements in order to facilitate a digital identity ecosystem which is operational in order to collaboratively create trust, security and privacy to serve end users in the market. Key differentiators − OIX uses different Trust Frameworks for different contexts, bankID is just offered by banks − eHerkenning is one e-identity Trust Framework for every context

35 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved More initiatives UK Identity assurance program USA: NSTIC STORK: EU interoperability of ID tokens Standardisation: SAML, XACML, ISO, … EU regulation

36 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Key points of EU proposed regulation Aimed at cross border acceptance of government e-identity tokens for government services Digital signature (repair earlier 1999 directive), electronic seals and time stamping Countries can register their e-identity token in Brussel => all EU27 countries have to accept the token The registering country has to: − accept liability in return − offer free on-line access for relying parties to the tokens This seems to incentivise countries to issue high assurance level EID’s and register them with EU

37 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Reflection on EU proposed regulation Which problem are we solving? Only the governments as relying party or the European society at large? − Marrying, medical, tendering, incorporation, studying: how often does this happen in a persons or companies life? Or as part of the whole economy? No business-to-business and business-to-consumer focus, therefore not addressing the fragmentation in the most relevant area’s. No common understanding of levels of assurance will hamper harmonisation. Relying parties will need to know what to trust and what not

38 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Potential winners in the identity market Regulated industries: banks, governments, telco’s => all have an existing relation with the customer Social media players: Facebook, Google, LinkedIn Specialised (local) e-identity players

39 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Huge challenge: business model Benefits for the relying party not aligned with cost of the user for the credentials and check Willingness to pay increases of time: as more services become available, it becomes more attractive to have an e-identity token Governments can drive adoption via exclusive and compulsory service (e.g. tax) Innovation still has to take place in this domain

40 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved Take away’s of this session 1.E-identity is the critical component for advancing online business, because it adds trust. Trust leads to more business. It is the ‘new money’ 2.E-identity should be ‘right’ (3P!) for BOTH user and relying party, including the business model. That will push for ‘non silo’ and ‘multiple assurance levels’ 3.Standardise part of today’s e-identity offerings in such a way that they become easier available for relying parties. Via separate gateways or as part of a trust framework. We can learn from the payment industry here! 4.Take the non-national view (first European, then global?)

41 Toward a Single European Identity Area? Douwe Lycklama – 8 April © Innopay BV. All rights reserved. Above all: think 3P! Source: Prof. Betty Collis, 1993 Profit PleasurePracticability

tomorrow’s transactions today Thank you Douwe Lycklama - For your attention