Matchmaking based on level is dumb design by default. It does not tell you anything except that person played game a bit more but it does not have to equal his skill.
Easiest way would probably be K/D/A rating system with brackets (like CS:GO, League of Legends etc.), which is something you can get closest to some kind of accuracy.
I can sort of see how this can work in skirmish mode, but it feels like a bit too much hassle for just one mode, since for siege, or any kind of bigger battle, this system is pretty much irrelevant.
I am curious if there are some further plans with this leveling system, although I am not a big fan of it and currently I see it only as some kind of incentive for players to keep playing just to show off that badge.
As was stated above, progress only counts if you play via matchmaking tool, custom games does not count.