The path to digital IDs

Today’s consumers expect convenience at every turn, demanding mobile-first experiences that are fast, intuitive, and free from unnecessary friction. Businesses that fail to offer such solutions risk being left behind by their competitors. These expectations also extend to the public sector, where the digitalisation of critical government services is becoming an essential strategy for driving inclusion and accessibility while better serving citizen needs.

An important step for accessing eGovernment services, of course, is secure identity verification. Until now, citizens have relied on methods such as NFC-enabled eIDs or other solutions tied to physical documents. However, it stands to reason that digital-first services should have a digital means of verification.

This is where digital identities come into play. Digital IDs are secure, government-issued credentials that allow individuals to verify their identity online or in person without relying on traditional physical documents. But digital IDs aren’t limited to government services – they unlock a wide range of possibilities for seamless identity verification across nearly every aspect of daily life.

“Digital and mobile identities are a win-win for citizens and businesses,” says Nick Larter, Senior Solutions Manager, Veridos. “They reduce the reliance on physical documents in everyday scenarios, creating a much more convenient experience for users without compromising on security and privacy. For businesses, they present untold opportunities to streamline operations.”

The case for digital IDs

Let’s imagine a business trip, where every step of the journey – from home to hotel room – reflects the ease and efficiency of a digital-first experience. Using a trusted digital ID, our traveller books a flight and hotel online and then checks in remotely via a mobile app. After arriving at the airport using a ridesharing app, they leave their luggage at the automated baggage drop-off and head straight for the security queue. Until this point, there has been no need to present a physical document and the whole journey has been fully automated. In fact, the only interaction with another person has been a few pleasant words exchanged with the rideshare driver.

Once through security, our traveller passes through a biometric gate to enter the lounge, where they relax before take-off. Boarding the plane is equally swift – a quick scan of a mobile boarding pass and they’re seated, ready to get a few hours of work done en route. At their destination, they grab their bag and hop in another rideshare to the hotel, where the hotel’s app notifies them that their smartphone doubles as a room key.

Isn’t this the kind of seamless journey that every traveller dreams of?

There is, however, still one obstacle. The smartphone room key will only work once regulatory “know your customer” (KYC) requirements have been fulfilled, and because the hotel is not equipped to verify digital ID credentials, our traveller must queue up at the hotel check-in desk to present a physical or mobile ID document. This is lost time during which the traveller could be preparing for an important meeting or relaxing in their room.

This example highlights a challenge that industry stakeholders must address: digital IDs offer an ideal solution to prevent such bottlenecks, but their benefits will only be realised with widespread acceptance among both citizens and businesses.

Overcoming the critical-mass dilemma

Mainstream adoption won’t happen overnight, but the foundations have been laid. The release of ISO 18013-5 in 2021 paved the way for digital IDs, such as driving licences, to be securely stored on smartphones for in-person identity verification. However, acceptance of the technology has been slow, partly due to infrastructure limitations and the gradual global adoption of new standards, but also because it simply takes time for people and society to adapt to new ways of doing things. Many businesses are also hesitant to invest in the necessary infrastructure without a large user base, while consumers remain wary of how their data will be handled.

This is expected to change in 2025. The newly released ISO 18013-7 will accelerate adoption by establishing a new standard for remote digital verification. “This is the specification everyone has been waiting for,” says Nick Larter. “In terms of driving adoption, this will be the spark that ignites the fire. It will serve as the catalyst for innovation, making it more cost-efficient for businesses to implement the infrastructure.”

New specifications alone won’t lead to mass adoption. It takes time to build user trust in new technologies – especially when it comes to sensitive data – which is why digital IDs will complement, rather than replace, physical ID documents. Just as mobile wallets haven’t replaced cash or card payments, or mobile boarding passes their physical counterparts, the physical identity document will always remain an option. It’s about providing convenience and choice.

Investment in infrastructure is another important factor that will drive adoption. After all, digital credentials are only as useful as the systems in place to verify them. Herein lies a “chicken and egg” dilemma for the industry: while accessible, everyday use cases are essential to attract a large user base, businesses are hesitant to invest in the necessary infrastructure without having a large number of potential users. 

Therefore, it is the responsibility of governments, who are both the issuers of digital IDs and the primary relying partners, to take the first step in ensuring that a critical mass of users is achieved. Once citizens are onboarded and accustomed to verifying their identity digitally for government services – such as paying taxes, registering a new address, or renewing a driving licence – their appetite and expectations for digital-first verification in other everyday interactions, such as banking or hotel check-ins, will naturally grow.

Around the world, new initiatives are being established to set this in motion. For example, the Tripartite Transport & Transit Facilitation Programme (TTTFP) is exploring the implementation of digital driving licences and digital IDs to streamline border crossings within the eastern and southern African region. By removing bureaucratic bottlenecks and reducing border delays, digital IDs can help stimulate economic growth within the bloc, making it easier to transport goods and travel between neighbouring countries.

Meanwhile, in Europe, the EU Digital Identity Framework Regulation, enacted in May 2024, mandates that all member states must offer citizens at least one form of digital identity wallet by 2026¹. In preparation for that date, pilot programmes are underway to test a broad range of real-world use cases² for these digital wallets.

This collaboration is another critical factor for scaling adoption: the government provides the foundation and stimulus, and the private sector is incentivised to create attractive use cases that will demonstrate the utility of mobile IDs in everyday life. Achieving critical mass requires the two working together.

“It’s about creating this symbiotic relationship,” says Michael Edwards, Director Business Development & Technical Sales eGovernment, Veridos. “The more users governments onboard, the more the private sector will feel encouraged to digitalise authentication processes and enable secure digital verification. This, in turn, will attract even more users, helping to achieve critical mass over time.”

Why businesses should embrace digital IDs

For citizens, digital IDs offer a host of benefits. Whether checking into a hotel or applying for a loan online, digital IDs offer the convenience of frictionless identity verification, with greater data privacy. Users retain full control over their data, sharing only what’s necessary for each identification transaction – a much more secure and convenient alternative to handing over a full document.

But there are several incentives for businesses to embrace digital IDs too, beyond simply regulatory compliance. Adopting digital IDs can help large enterprises like hotel chains or car rental companies reduce the time staff spend verifying physical documents, which can translate into significant cost reductions and efficiency gains across the entire year. 

In turn, this contributes to a more a seamless and convenient experience for the customer, which, combined with the data privacy benefits, can lead to higher satisfaction, and ultimately, retention rates. This reason alone should prompt businesses into action.

Those that move quickly following the release of ISO 18013-7 in 2024 can benefit from first-mover advantage, giving them an edge against their competitors. After all, the luxury of convenience and choice is an attractive proposition for customers. 

Navigating this transition can be a challenge, especially given the constantly evolving nature of security technology. As a trusted leader in identity solutions, Veridos is well positioned to support governments and organisations on this journey, helping ensure that both security and user convenience remain at the forefront.

Published: 10/12/2024