How we are identified and how transactions take place are in the midst of an upheaval from the industrial age to the digital age, and as that transition takes place, some countries are likely to have distinct advantages, due to historical and cultural factors.
In the rise of fintech — online, frictionless banking services — venture capitalist and entrepreneur Pascal Bouvier sees two key elements of change: market forces, which will naturally push toward a freer exchange of funds, and governments and policies that can grind that transition to a halt.
In particular, moving from physical, in-person identification methods to secure, online verification is a crucial component of fintech — one that could face roadblocks from certain nations. In some cases, culture and history could play a significant role.
Speaking with One World Identity’s Cameron D’Ambrosi on the State of Identity podcast, Bouvier explained that different corners of the world have “a legacy of identities that are very different.”
For example, in the U.S. and the U.K., the governments and people have not implemented standardized national identification methods in the same way as countries like France or Germany. He believes countries without strong national ID programs could struggle in the transition to secure digital identities.
“Certain countries will get to strong digital identity schemes first,” Bouvier said.
In the early days of fintech mass adoption and digital IDs, that could give certain countries and regions a leg up with systemic and, eventually, economic advantages. As a proponent of frictionless micropayments from person to person or device to device, Bouvier noted that those kinds of services will only scale when people and institutions have a strong digital identity scheme on which they can rely.
For now, legacy identification methods preferring in-real-life interactions remain the norm. But as the fintech tipping point approaches, who is best prepared could play a crucial role
“The way identities were provisioned for the industrial age,” Bouvier said, “is not optimized for the digital age.”