We have lost our way when it comes to solving digital identification challenges, a global anti-money-laundering expert believes.

“We are in so much trouble,” said Liat Shetret, director of global policy and regulation at Elliptic, a firm that provides anti-money-laundering software.

Speaking at the Bermuda Tech Summit 2023, she said: “Every local, state, regional and global body is developing taxonomy. I literally sit on calls that are taxonomies of taxonomies, and how do we standardise the standards?”

In the panel On The Path to Building a Digital Identity, she said there are too many vendors trying to solve the “know your customer” conundrum.

“None of them are talking to each other,” she said.

Vendors are competing for funding to solve the same problems, but are not actually doing that, she said.

“At the moment, we are all very busy building identity solutions,” Ms Shetret said, “but we are cutting and pasting from what we used to be, not where we are, or how we are behaving, and definitely not where we are going.”

She said we need to step back and look at what we are trying to achieve.

Panel moderator Tim Reed, cofounder of Next Bermuda, asked if she saw anyone moving in the right direction.

“I would be worried if I saw any one moving in that direction,” she said. “There are some consortiums that are having the right conversations, and the right entities are in the room.”

There was some good news from the panel, especially for Bermuda.

Ricky Brathwaite, chief executive of the Bermuda Health Council, said from a healthcare point of view, Bermuda is actually ahead of some other jurisdictions in the digital identity space.

He said Bermuda’s communication process and tighter relationships make it easier for the island to succeed in digital identification.

“We are using our sandbox to come up with solutions we feel could be a springboard for the rest of the world,” he said. “We feel we are actually ahead of a lot larger jurisdictions in this space. We are not planning to slow down.”

He said Bermuda’s process of credentialling is innovative.

“Our digital credentialling process is different than pretty much every other country,” he said. “So while we are leveraging concepts from some of the other countries, we are forging ahead with some of the commercial applications that are being used in other markets in our healthcare field.”

Ms Shetret said Bermuda shines in two areas.

“You have an incredibly established insurance and reinsurance industry, which has identification lessons, historically and ongoing,” she said. “The other piece is the regulatory sandbox.”

She said in the United States everyone is afraid of financial regulators.

“In America, where I am from, you are urged to talk to them in groups, because no one wants to be picked on,” she said. “Here you call up the regulator and say, I have an idea. Can we brainstorm this or take a sandbox licence and figure it out for a little while?”

Renatto Garro, director of innovation, Nebulai, a firm partnered with Google, said connectivity was one of the problems with digital identification.

“We have many, many systems that allow people to authenticate authorised use for specific systems or platforms or business processes, but a lot of them are disconnected,” he said.

Mr Garro said the other problem is security. He said about 31 per cent of cybersecurity issues happen because of lack of proper management of data identity.

“At Google, we try to help customers to consolidate their systems to have a single experience and a single ability to have a username and password to log into many systems, whether they are on premises, in the cloud, or multiple systems,” Mr Garro said.

He said they do this through the use of multifactor authentication, biometrics, or hardware that streamlines the security process.

“We have this mentality of zero trust,” Mr Garro said.

Mark Sullivan, Canadian Banknote Company director of digital services, is seeing a trend where everyone is trying to coalesce and find ways to technically interoperate.

“It would be great to snap our fingers and have an international approach to this,” he said. “But I don’t think that is forthcoming, at least not at the pace that is going to outpace the development as everyone is carrying forward.”