What Is Self-Sovereign Identity Verification and How Is It Changing Background Screening?

Modern technology has transformed background screening from a manual, time-consuming process to one offering actionable background data to support hiring and talent management decision-making. As new, more reliable background data sources become available, background screening will become even more efficient than it is today. 

A prime example is self-sovereign identity verification, one of the game-changing background screening trends of 2021. When combined with screening activities, self-sovereign identity solutions offer opportunities to obtain more accurate candidate background data and deliver it to employers faster.

What is self-sovereign identity verification?

Self-sovereign identity describes the mechanisms by which individuals possess control over their identifying information, including how it is shared and when others can access it. As one research professor describes in a recent Forbes article, by adopting this modern identity management solution, “individuals themselves, rather than the organizations that issue or store certain credentials, are authorized to share certain pieces of [their] digital information.”

A “Digital Wallet”

To understand how self-sovereign identity verification works, think of each person as owning a ledger, or “digital wallet,” filled with identifying information. The wallet is built on blockchain technology, which can record and store large amounts of data and protect it from unauthorized changes or hacks. 

Any information individuals place in their digital wallet is supported by documents of proof such as a passport, birth certificate, and other forms of identification. Those documents are then verified by an authorized third party such as a government agency, university, or employer. Anyone receiving access to the individual’s digital wallet will have the assurance the information has already been verified as accurate.

A Dynamic Information Store

Through the use of blockchain technology, large amounts of identifying information about an individual can be gathered and catalogued. It can be used for various purposes, including verifying candidate employment, education, and criminal history. 

As a result, it will be possible for background screening providers to request pre-verified and accurate data directly from candidates, such as:

• Date of birth
• Social security number
• Addresses
• Education and other credentials, such as professional licenses
• Employment history
  
  

Although self-sovereign identity verification is still in its infancy, it is anticipated to grow at an accelerated rate in the next several years. Gartner predicts by 2025, this new approach to identity management will seamlessly converge with blockchain technology to “enable a large number of smaller transactions to occur that would not be possible with traditional mechanisms.”

Self-sovereign identity verification is changing background screening.

Self-sovereign identity is particularly relevant to background screening because it challenges the notion of third-party databases and lists as the main sources for verifying individual background data. When individuals control their information and present it as pre-verified and accurate, the traditional background screening data collection and verification process will be dramatically accelerated. 

Here are some specific ways self-sovereign identity verification can change how background screening is conducted today:

Simplified Identity Verification

Self-sovereign identity verification helps establish one consistent identity for a person, which reduces the chances of performing a background check on the wrong candidate. Whether you want to hire Jon W. Smith or John W. Smythe, self-sovereign identity verification allows you to obtain background data directly from the source—not a database, but the actual John W. Smith you intend to hire. 

This new way of verifying candidate data also removes third parties from the employment and education verification process. If a candidate can immediately present their verified education and employment history to your screening provider, there will be little need to call, email, or fax verification requests to schools and previous employers.

Reduction in Identity Theft and Misrepresentation

Despite efforts to prevent it, identity theft is booming. According to a 2021 Federal Trade Commission (FTC) report, over 4.7 million reports of identity theft and fraud were reported to the agency in 2020, up 45 percent from the previous year. Identity theft presents a risk to the accuracy of background screening results, but self-sovereign identity mitigates the risk.

When candidates have control over their own data and use reliable blockchain systems for storing it securely, it will be harder for others to steal. Furthermore, with a single source of truth for a candidate’s background data, it will likely be harder for candidates to present fake credentials and degrees from institutions that either don’t exist or aren’t accredited.

Candidates Empowered to Authenticate Their Own Identity

Currently, when the background check process identifies something in a candidate’s background check results suggesting the candidate may be a risky hire, the candidate has a right to review the results and present new or more accurate background information. But if the background screening provider receives background data directly from the candidate, and it has been verified as accurate, there’s less need to rely on potentially inaccurate databases and lists. Instead of candidates being blindsided by background data which could threaten a job opportunity, they can provide background details they know are accurate and authentic.

Streamlined Background Screening Authorization Process

As per the Fair Credit Reporting Act (FCRA), all employers conducting background checks must provide candidates with disclosure documents detailing the use of background checks for employment. Employers are also required to secure written authorization from candidates before starting the screening process. 

Today, employers can use an automated e-disclosure and authorization process to reduce the need for paper forms, but an even more efficient process could replace it. A key feature of self-sovereign identity systems is a digital signature individuals can control and use for a range of authorization purposes, including for a background check.

Less Need for Paper Identification Documents 

Today’s hiring and background screening processes require the exchange of many documents and forms, whether in paper or electronic form. However, self-sovereign identification systems can store all of a candidate’s identifying documents, making it possible to hire and onboard new hires with much less document exchange. Candidates can simply provide digital access to authorized parties rather than send copies of passports, birth certificates, or professional licenses to satisfy background screening and I-9 verification processes.

Reduced Reliance on Physical Court Searches of Criminal Records

Background checks are required by the Fair Credit Reporting Act (FCRA) to report only the most accurate and up-to-date background information. As a result, anytime a criminal history search uncovers prior offenses or “hits,” the information must be verified at the source, for example, at a county court. 

However, with the aid of self-sovereign identity verification, it will be possible to avoid court record verifications as well as their associated delays. Instead of visiting a court or checking court records to verify criminal history, candidates can provide direct access to their criminal history data, which has already been verified as accurate by a court or other government authority.

Keep pace with the latest background screening trends.

If past developments are any indication of the future, all signs point to continued advancements in background screening. The growth of blockchain technology and self-sovereign identity systems will enable faster background screening and a smoother hiring process for candidates. 

In addition to this emerging technology, trends in areas such as regulatory compliance and workforce monitoring will also offer new opportunities to manage hiring risks and increase efficiency in your hiring and background screening processes. To learn more, view our “2021 Trends Interactive Infographic.”