A Blueprint for Digital Identity

The report outlines a blueprint for digital identity, identifying the structural advantages of financial institutions (FIs) in acting as identity providers. It categorizes digital identity systems into five archetypes—internal identity management, external authentication, centralized identity, federated authentication, and distributed identity—and recommends distributed systems for individuals and centralized systems for legal entities and assets. The document proposes a two-step implementation process: first building discrete 'natural identity networks' based on specific user needs and cultural contexts, and then creating interoperable 'rails' to connect these networks globally.

• Current physical identity systems are document-based, siloed, and inflexible, which creates significant business problems for financial institutions, including inefficient onboarding, costly know-your-customer (KYC) processes, and high fraud rates.
• Financial institutions possess several structural advantages that make them ideal drivers of digital identity, including their role as trusted repositories of information, their ability to verify user data for regulatory purposes, and their near-complete coverage of users in developed economies.
• The report identifies five digital identity archetypes: Internal Identity Management (single entity as IdP and RP), External Authentication (one RP using external IdPs), Centralized Identity (single IdP serving many RPs), Federated Authentication (central IdP with third-party brokers), and Distributed Identity (many IdPs serving many RPs).
• Distributed identity systems are deemed the best fit for individuals at scale because they protect privacy and remove single points of failure, while centralized identity systems are most suitable for legal entities and assets to provide a 'single source of truth' for regulators.
• The development of digital identity systems should be guided by five principles: ensuring it is a social good, privacy-enhancing, user-centric, viable and sustainable, and open and flexible.
• Financial institutions can derive value from digital identity through operational efficiency, new revenue streams such as 'identity-as-a-service', improved compliance, and the ability to offer tailored risk-based products.
• A global digital identity solution cannot be a monolith due to differing user needs (individuals vs. legal entities) and cultural or geopolitical factors; instead, it requires building discrete natural identity networks first and then creating interoperable rails between them.
• Distributed Ledger Technology (DLT) offers potential for identity systems by providing immutability, lower transaction costs, and the ability for users to store attestations on a ledger without intermediaries.

APA

McWaters, R. J. (2016). A Blueprint for Digital Identity. World Economic Forum. http://www3.weforum.org/docs/WEF_A_Blueprint_for_Digital_Identity.pdf

Chicago

McWaters, R. Jesse. A Blueprint for Digital Identity. World Economic Forum, 2016. http://www3.weforum.org/docs/WEF_A_Blueprint_for_Digital_Identity.pdf.

Wikipedia

{{cite report |last1=McWaters |first1=R. Jesse |title=A Blueprint for Digital Identity |publisher=World Economic Forum |date=August 2016 |url=http://www3.weforum.org/docs/WEF_A_Blueprint_for_Digital_Identity.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mcwaters2016blueprint, author = {McWaters, R. Jesse}, title = {{A Blueprint for Digital Identity}}, institution = {World Economic Forum}, year = {2016}, month = aug, url = {http://www3.weforum.org/docs/WEF_A_Blueprint_for_Digital_Identity.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }