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The IRS U-turn on facial recognition could spell trouble for biometric ID

The US tax collector backtracked on plans to use facial recognition to identify taxpayers online this week, raising questions about the many biometric ID schemes in development.

By Afiq Fitri

The US Inland Revenue Service this week backtracked on plans to use facial recognition for online identity checks, following criticism from members of Congress and privacy advocates. The decision points to a rocky road ahead for the many public and private sector organisations planning to use biometrics as part of their digital identity plans, and the start-ups hoping to capitalise on the opportunity. 

biometric ID


Only 15% of Britons consider themselves well-informed about the issues surrounding digital ID. (Photo by Bloomberg via Getty)

IRS backtracks on biometric ID

This week, the IRS announced that it would “transition away” from using digital ID provider ID.me for online identity checks. Last year, it awarded the company a contract to provide facial recognition checks for taxpayers accessing their records online. ID.me’s service requires users to record a video selfie in order to authenticate their identity, the New York Times reported.

Critics of the contract included senator Ron Wyden, who wrote “it is simply unacceptable to force Americans to submit to scans using facial recognition technology as a condition of interacting with the government online”.

“[M]any facial recognition technologies are biased in ways that negatively impact vulnerable groups, including people of colour, women, and seniors,” Wyden wrote. “In addition to the serious privacy and civil liberties issues associated with the use of facial recognition technology, it is also alarming that the IRS and so many other government agencies have outsourced their core technology infrastructure to the private sector.”

The IRS U-turn raises fresh questions about the many private and public sector digital ID programmes that incorporate biometrics, and the burgeoning market of biometric ID providers.

Government-backed biometric ID schemes

Governments around the world are building digital ID schemes, including biometrics, to crack down on online fraud and make public services easier to access. In June last year, the EU unveiled a new digital identity scheme that will allow users to authenticate their identities using a fingerprint or iris scan, among other methods.

The UK, which has historically resisted national identify programmes, is developing a ‘digital identity trust framework‘, that will allow commercial digital ID services providers to be certified for use with public services.

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Meanwhile, biometric identity projects are underway in business and government. In November last year, the UK’s Government Digital Service issued a tender for digital identity services of which selfie biometrics are likely to be included.

This month, the Home Office announced a trial to use facial recognition technology for alcohol age checks and the Nationwide Building Society revealed it is working with UK digital ID start-up Jumio for user onboarding and age verification for young people opening accounts. 

The market for biometric ID services

Jumio is one of a number of digital ID start-ups vying for a growing market opportunity. Research provider Goode Intelligence predicts that the number of identity verification checks will grow from 1.1 billion last year to 3.6 billion in 2026. The market for digital ID verification will more than double to reach $17.2bn by 2027, the company forecasts.

Onfido is the best-funded of the UK's digital ID start-ups, having raised $209m so far. The company grew revenues by over 100% last year, it claims, up to over $100m in annual recurring revenue, and is reportedly considering an IPO in New York. Jumio, meanwhile, has raised $202m so far. 

UK attitudes towards biometric ID verification

It is unclear whether British citizens are aware of this rapid roll-out of biometric ID systems, and whether they are happy about it.

A survey conducted by BT in October last year found that 60% of more than 1,000 respondents agreed they felt more confident accessing public services online in a post-pandemic world. A similar study by Onfido also found that 53% were “very comfortable” with accessing services online. 

However, a survey by Passfort conducted in November 2021 found that only 15% of Britons considered themselves well-informed on the debates surrounding national digital IDs, while more than half said they were not, or knew nothing about these issues.

These findings are similar to insights gathered by the Ada Lovelace Institute in 2019 which found that 46% of the British public did not know anything about facial recognition technology or were not aware at all of its existence. 

If news such as the IRS' U-turn on facial recognition reaches widespread attention, public opinion may harden towards biometric ID recognition. Institutions should tread carefully and in consultation with their customers.

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