Could digital ID create greater global equality?
How everyone can unlock the digital world
Anyone who has been asked to show their identity document (ID) for proof of age before buying a bottle of wine, cigarettes or fireworks knows how inconvenient it can be if you don’t have the right document with you. However, a trip home to fetch your ID can usually remedy the situation.
Resorting to fake IDs is unlikely to work because of the rise of digital IDs that are chipped and connected and far less easy to copy. Although putting petty criminals out of business is one happy effect of these advances, there are much bigger benefits—advantages that can help reshape the world. While not having an ID when making a purchase is a minor inconvenience, the solution—a digital ID—could prove to be a game-changer for the developing world.
“Globally, one billion people lack an official proof of ID”
– World Bank
The World Bank estimates that globally, there are 1 billion people (over 15 years of age) who lack an anchor document, such as a national identity card, passport or driving license. Around half of this number are in sub-Saharan Africa and many more live in remote areas where there are no formal mechanisms for recording and accessing the information on births, deaths and marriages.
Figure 1. Estimated number of people without an official proof of ID, worldwide
Without an ID, individuals are unable to get a residence permit or a job, or open a bank account. Those in low-income economies are most likely to lack a form of ID, and this, in turn, limits their ability to access healthcare, education or social housing. And they cannot participate in political and economic life.
Women are disproportionally impacted as they are more likely to occupy part-time roles or unpaid caregiver roles outside the state system. They’re also less likely to have progressed beyond primary education or have any ID in their name. The World Bank estimates that 50% of women in low income countries have no legal ID.
If you don’t have an ID, how can you prove who you are? Appearing in person at an office or obtaining notarized documents can be costly and involve long journeys. And given that the world is moving online, it makes sense that this ID is digital. However, while secure, easy-to-use identity solutions exist for individual apps, the challenge is taking credentials created and verified in one system, such as a government database, and having them recognized by multiple systems.
Digital ID is needed for sustainable development
Kenechi owns a small farm in Kano state, Nigeria. He wants to expand—diversify his crops, hire more people and sell his produce to a local supermarket. So, when a neighboring plot comes up for sale, Kenechi goes to the agent handling the sale to enquire about making the purchase.
He’s asked to provide a picture ID, proof of address and proof of income. However, Kenechi doesn’t have a passport or drive a car. He’s not connected to the electricity grid and he doesn’t have a bank account. He’s bartered for goods and receives cash selling his crops door to door in his village. His main assets are his land and house (that he can’t prove he owns), a bicycle and his prepaid mobile phone. Despite his entrepreneurial zeal, Kenechi can’t make the purchase and build a better life for his family and his local community. Instead of being a contributor to social and economic growth, he may need state support.
Governments in developing markets acknowledge that these scenarios are detrimental to all involved. If citizens are unable to prove their legal rights, they can't access welfare payments and will lack access to well paid jobs, grants and loans.
These governments see digital ID projects as a way of powering the economy. The Philippine Identification Program Philippine Identification Program is a good example of how to provide a registration pathway for those without documentation. The system architecture is based on open source and open standards, but includes privacy-enhancing technologies, such as tokens to protect the permanent unique identifier. The process adheres to many of the best practice Principles on Identification for Sustainable Development (Figure 2) as defined by a group of technology, financial and philanthropic organizations committed to universal identity for sustainable development.
Figure 2. Principles on identification for sustainable development (updated in 2021)
Source: See ID4D
CSPs play a central role in digital ID programs
Many governments want to work with communication service providers (CSPs) to run their digital ID projects. For example, the Nigerian government intends to leverage the experience and expertise that mobile operators have in registering users and handling sensitive data. This makes sense as mobile penetration exceeds fixed broadband penetration and the smartphone can be the vehicle for digital identity programs across the public and private sector. For this approach to work, you require a robust SIM registration process, and initial implementation costs for mobile operators can be high. Despite this, according to the GSMA, mandatory SIM registration policies are in place in 157 countries.
Figure 3. Roles that MNOs can play in supporting digital ID ecosystems
Before SIM registration can begin, individuals still need to prove their identity through a chip-based national identity card or government token. This means that governments must ensure that women, vulnerable groups and the unemployed are not excluded. As with physical forms of ID, digital ID is open to misuse and fraud, so privacy and security must be built in. For example, around 37% of countries with mandatory SIM registration lack a comprehensive data protection or privacy framework.
Operators are the engine powering digital identity for sustainable development. When registering a SIM, they are required to capture and store, share or validate customer ID with governments, so they can play a key role in ensuring that credentials can be leveraged across multiple public and private systems (see Figure 3).
“Some CSPs have reported a 20% increase in revenues following the roll-out of ID programs”
From a commercial perspective, digital ID offers operators new growth and increased stickiness with new and existing customers for operators. Some CSPs reported a 20% increase in revenues following the roll-out of ID programs by offering ID-linked mobile services and verification-as-a-service (VaaS) for third parties.
From the perspective of social and economic sustainability, it’s important to harmonize SIM registrations and mobile money “know your customer (KYC)” requirements. Mobile money services are frequently used in local economies in developing markets—for example, so that farmers, fishermen and local market traders can run their businesses.
Once customers have a SIM card (and a mobile money account) registered in their name, they can receive welfare payments, access health records, and access benefits or services that fit their situation (See Figure 4). It allows everyone to have a voice and be socially and economically included and active.
Figure 4. Benefits of digital identity
Source: World Economic Forum. "How digital identity can improve lives in a post-COVID-19 world", January 2021
What does digital ID success look like?
Estonia provides a unique example of a successful digital ID program at a state level. They’ve leveraged credentials across public and private sector services and claim that 99% of state services are online. This has increased civic participation and societal advancement. Online voting has been a beneficiary too, eradicating voter fraud and generating high levels of trust from citizens.
The government has implemented a blockchain database system that allows citizens to own and manage their personal data. Citizens are required to input their data once to leverage across systems. After that, only the relevant data is shared with various government departments. The Estonian government brands itself as a "digital republic” and claims that this digitization of public services saves more than 1,400 years of working time and 2% of its GDP.
Digital ID underpins enhanced digital services for consumers and businesses, as well as enabling CSPs to manage their operations more efficiently. CSPs need to put themselves at the center of the ecosystem and use their subscriber data management, device management and application management skills across digital platforms.
Is digital ID a good idea? Digital identity is needed to connect the unconnected and remove the digital divide. It drives digital and financial inclusion and ensures equal access to health, education and finance. It’s a key to unlock the digital world, and as such, it needs to balance online access with protecting the privacy and security of personal data across networks.
Whether you’re trying to purchase a luxury item, or you’re someone in a remote region needing access to government healthcare services, identity is fundamentally important in ensuring everyone is included.