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Digital identity programs: The race to national digitization

Governments are implementing their federal digital ID programs to streamline public services and collect data more efficiently.

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Quantumrun Foresight
August 30, 2022

Insight summary

National digital identity programs are reshaping citizen identification, offering benefits like better security and service efficiency but also raise privacy and fraud concerns. These programs are vital for universal access to rights and services, yet their success varies globally, with challenges in implementation and equal access. They influence public service delivery, employment sectors, and raise ethical questions about data use and privacy.

National digital identity program context

National digital identity programs are becoming increasingly common as countries look to improve their citizen identification systems. These programs can provide benefits, such as increased security, streamlined service delivery, and improved data accuracy. However, there are also risks, such as privacy concerns, fraud, and potential abuse.

The primary role of digital IDs is to enable citizens to access universal basic rights, services, opportunities, and protections. Governments have frequently established functional identification systems to manage authentication and authorization for various sectors or use cases, such as voting, taxation, social protection, travel, etc. Digital ID systems, also known as digital ID solutions, employ technology throughout their lifecycle, including data capture, validation, storage, and transfer; credential management; and identity verification. Although the phrase "digital ID" is sometimes interpreted to imply online or virtual transactions (e.g., for logging into an e-service portal), such credentials can also be used for more secure in-person (and offline) identification.

The World Bank estimates that about 1 billion people lack national identification, particularly in sub-Saharan Africa and South Asia. These areas tend to have vulnerable communities and governments that are unstable with weak infrastructure and public services. A digital ID program can help these regions become more modern and inclusive. In addition, with proper identification and distribution of benefits and aid, organizations can be ensured that everyone can receive help and support. However, while countries like Estonia, Denmark, and Sweden have experienced significant successes with implementing their digital identity programs, most countries have experienced mixed results, with many still struggling to implement initial rollout phases.

Disruptive impact

One of the main advantages of having a national ID is that it can help to reduce fraudulent activity. For example, if someone were to try and register for social benefits using a false identity, a national ID would make it easier for authorities to verify the person's records. In addition, national IDs can help to streamline public service delivery by reducing the need for redundant data collection.

Government agencies and private companies can save time and money that would otherwise be spent on background checks by having one source of verified identity information. Another benefit of national IDs is that they can help to improve access to services for marginalized groups. For example, women cannot access formal identification documents such as birth certificates in many countries. This limitation can make it difficult for these women to open bank accounts, get access to credit, or register for social benefits. Having a national ID can help to overcome these barriers and give women greater control over their lives.

However, governments must focus on several key areas to create a successful digital identity program. First, governments must ensure that the digital identity system is equivalent to those currently in use, both in terms of functionality and security. They must also work to integrate as many public-sector use cases as possible into the system and offer incentives for uptake by private-sector service providers.

Finally, they must focus on creating a positive user experience, making the enrollment process easy and convenient. An example is Germany, which set up 50,000 enrollment points for its electronic ID card and offered flexible documentation processing. Another example is India, which onboarded more than one billion people to its digital ID program by paying private sector companies for every successful enrollment initiative.

Implications of digital identity programs

Wider implications of digital identity programs may include:

Digital identity programs enabling easier access to healthcare and social welfare for marginalized populations, thus reducing inequality in developing countries.

The reduction of fraudulent activities, like voting by deceased individuals or false employee records, through more accurate identification systems.

Governments collaborating with private firms, offering incentives like e-commerce discounts to encourage enrollment in digital identity initiatives.

Risks of digital identity data being used for surveillance and targeting dissenting groups, prompting concerns over privacy and human rights violations.

Advocacy by civil rights organizations for increased transparency in the use of digital ID data by governments to safeguard public trust and rights.

Enhanced efficiency in public service delivery, with digital identities streamlining processes like tax collection and passport issuance.

Shifts in employment patterns, as sectors reliant on manual identity verification may decline, while demand for data security and IT professionals grows.