Every citizen of each country needs to have a legal identity for the government to be able to deliver financial benefits as well as healthcare and other socio-economic services.
A large proportion of the global population is struggling to get access to basic amenities because they have no identity. According to ID4D Global Dataset, there are an estimated 1 billion people around the world without a valid identity. This crisis needs immediate attention.
Several innovative technologies are leading the world economy into digital transformation. One of the most emerging technology trends is in the field of digital identity. The Identification for Development (ID4D) is an initiative by the World Bank that aims to help countries realize the transformational potential of the digital identification system.
With the use of the right technology, the identification system can be integrated into the domains of finance, governance, healthcare, and social protection. It will enable people to access services and exercise their rights easily with their digital identity.
The ID4D initiative aims to provide legal identity to every existing being in this world by 2030.
The Impact of Digital ID on Economy
Countries around the world are making efforts to get an efficient system in place for their citizens.
The United States of America already has a system called the social security number in effect. It is a nine-digit number that keeps track of an individual’s earnings and years of employment through this number.
This number can be used for opening accounts with financial institutions, applying for federal loans, applying for any public assistance such as unemployment benefits, enrolling for any medicare or Medicaid services, applying for a passport or driver’s license, and filing taxes.
Sweden’s BankID system, developed by several large banks, has gained recognition from the Swedish government as well. This BankID can be used as proof of identification as well as for signing documents and transactions.
The signature made with BankID is legally binding within the European Union according to the Swedish Law.
Argentina also launched its digital identification system in 2018. They have integrated biometric authentication with facial recognition. The validation of facial recognition can be done through any device with a camera and is valid across both public and private sector services. The government is taking steps to integrate this system into the health and banking sectors soon.
E-Identity for Citizens
Surprisingly, 98% of the Estonian population has an e-identity. Apart from being a legally valid identity proof, the e-identity provides digital access to all secure e-services. It can be used as a legal travel ID by the citizens within the European Union and serves as a national health insurance card.
It can be used for i-voting, filing taxes, banking, digital signatures, and medical records. This chip-based card has made Estonia a country with one of the world’s most advanced digital signature systems.
India has its own digital identification system called Aadhar. Launched in 2009, it is used as a proof of identification and for e-KYC. It can be used to receive government benefits like subsidies directly to your bank accounts.
With the Digilocker facility attached to every Aadhar number, it enables a person to store his/her documents and signatures in the digital form, making it easy to store and access documents.
China has also vaulted into the digital economy by issuing national ID cards featuring encryption and chips. These contain personal information details like sex, ethnicity, date of birth, identification number, photograph, and residential address.
This ID is valid for passport and driving license applications. It can also be used for opening bank accounts. Since the project is in its inception period, these virtual IDs are currently valid at certain select government departments.
China is also striving to build a facial recognition database that will enable immediate identification of its citizens.
While digital identification will fix many problems, it will be vulnerable to cyber intrusions and frauds due to the presence of the information of all citizens at a single place.
If the system is not well guarded or its privacy provisioning is not thorough, it could bring down the infrastructure and economy of a nation. Therefore, a thoughtful and secure digital identification system should be built to mitigate these risks.