Digital identity programs: The race to national digitization

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  Quantumrun Foresight
• January 8, 2024

Insight summary

National digital identity programs are increasingly adopted globally, offering enhanced security, efficient service delivery, and improved data accuracy. While they aid in providing universal access to services and rights, especially in underserved regions, challenges in implementation and privacy concerns persist. These programs reduce fraud and improve access for marginalized groups but also raise risks of misuse and surveillance. Successful models like in Germany and India highlight the importance of secure, user-friendly systems. The implications are vast, including streamlined healthcare, fraud reduction, and stronger government-private sector collaborations, balanced with the need for transparency and responsible data use.

National digital identity program context

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: 

• Streamlined access to universal healthcare and social welfare programs, especially for marginalized groups living in developing nations. 
• Elimination of fraudulent activities such as deceased citizens still being included in voting lists and ghost employees.
• Increased partnerships between governments and private companies to incentivize people to enroll in digital ID programs (e.g., e-commerce discounts).
• Potential misuse of public information for surveillance and for targeting groups vocal against their respective governments.
• Civil rights groups pushing for more transparency on how their respective governments are using digital ID data.

Questions to comment on

• Are you enrolled in a national digital ID program? How would you describe your experience with it compared to older systems?
• What are the other potential benefits and risks of having digital IDs?