What additional capabilities can digital identity offer to FIs? CURRENT STATE: Individual and corporate identity information is currently not linked; it is challenging to identify individuals who are associated with corporate entities. HOW WOULD DIGITAL IDENTITY HELP? The digital and standardised collection, storage and transfer of attributes for both individuals and legal entities would ensure identity information is accurate and up‐ to‐date. Linkages between these systems would create reliable pictures of the identities of individuals affiliated with legal entities for KYC and other purposes. 99 WORLD ECONOMIC FORUM | 2016 7. LINKING INDIVIDUAL IDENTITY TO CORPORATE IDENTITY CURRENT STATE: The transaction and ownership history of assets can become ambiguous as assets are rehypothecated; this exacerbates counterparty risk and asset valuation uncertainty, while the lack of a historical tracking mechanism prevents the enforcement of limits on the extent of asset rehypothecation. HOW WOULD DIGITAL IDENTITY HELP? Consolidated, standardised and digital identity information for assets would be available to all entities engaging in a transaction involving that asset, giving transaction counterparties the ability to check asset information, such as issuer and transaction history; this would enable the tracking of the asset ownership structure and composition, and prevent over‐rehypothecation due to the lack of visibility into past transactions involving that asset. 8. TRACKING TOTAL ASSET REHYPOTHECATION 50%
