Indonesia promises significant savings through digital government integration

As governments around the world seek to save costs, some are looking to digital government as a solution. Cash-strapped governments are not uncommon, with Western countries often borrowing enormous amounts to fund public services. Developed countries can borrow more, based on their more productive economies, but developing countries have more limited capital to work with, even as they pursue development.

Indonesia’s Minister of National Development Planning (Bappenas) Rachmat Pambudy believes an integrated digital government system could free up significant funds, reducing state budget (APBN) expenditures by up to 30 percent.

“Through digitization, the government can operate more accurately, efficiently, and transparently,” Pambudy said, during the first plenary session of the Government Digital Transformation Acceleration Committee.

“Bappenas is committed to planning this digitalization strategy in the national interest. Therefore, we need a solid data foundation and a clear national strategy to ensure that digital transformation stays on course.”

The committee is responsible for implementing digital government initiatives, such as the development of DPI — digital ID, Government Cloud, Data Exchange and a centralized government super-app —  and steering policy directions. Digital sovereignty, cybersecurity and civil service capacity building is also part of its remit.

Indonesia’s digital transformation ambitions are not so singular. Its neighbors in Southeast Asia have similar designs. Malaysia is a step ahead, having launched its national digital ID, but is having trouble with uptake for its MyDigital ID. The Philippines is advancing Internet connectivity to bolster inclusion. Public education for the benefits of digitalization is ongoing.

This feeds into recent comments made by Jyotsna Pantula, director of marketing for Government Solutions, and Sebastian Sienra, director of government solutions, both of Entrust.

Speaking on the Cyber Security Institute’s podcast, they were asked “why do digital ID programs fail?” where the overall theme was “Crossing the Digital Identity Divide: Trust and Interoperability in Action.” The failure of digital ID is certainly one to be avoided considering the amount of investment outlay (and not just capital) such a program demands.

In his answer Sienra said the challenges trace back to the early rollout of national ID systems and chip-enabled smart cards. A national ID system, whether physical or digital, can follow similar paths. Initial efforts aim for widespread adoption, but struggle to reach critical mass due to security vulnerabilities, public backlash over privacy concerns, and a lack of clarity around the collection of personally identifiable information (PII). Adoption can remain low, hindered by poor user experience and the absence of compelling, everyday use cases. This raises a fundamental question, Sienra notes: why continue investing in such technologies?

“Exclusion is a big one today,” he continued, mentioning the undocumented, the unbanked. “If they get left out, trust collapses across society.” Interoperability is another major gap — if identities can’t be reliably verified where they’re needed, such as across borders, within enterprises, or at government offices, the system loses its utility.

Pantula highlighted the other side, when the pieces fit together. The Dominican Republic is a great example, she said. Its national digital ID system incorporates biometric binding, meaning each identity is securely linked to biometric data. This regulatory approach helps prevent duplication and fraud. The country is now transitioning to e-passports and aligning with international standards, like the ICAO’s for travel document security, building on a foundation of strong identity credentials for both mobile and physical.

Sienra believes the aim should be a single, securely bound identity that can be expressed through multiple credentials tailored to different formats, access needs, and use cases. Establish the identity once with strong verification, and enable it to function seamlessly across channels, all within a unified lifecycle.

This calls for an identity-centric architecture: robust identity verification (IDV), liveness detection, and documented safeguards against fraud and attacks. Identity access management must be orchestrated holistically, connecting the dots across user journeys, from credential issuance to cryptographic signing and PKI-based assurance. Data security hinges on managing the keys involved, and adhering to open standards should take precedence over proprietary solutions.

The principle is “one identity, many expressions,” with minimal data disclosure, the Entrust director argued. “Trust is a journey, not a destination,” Sienra said, adding that it’s something you cannot buy. Investing in security and privacy and ongoing education are your keys.

The Association of Southeast Asian Nations (ASEAN) includes multiple countries on their DPI and digital transformation journeys, including Indonesia. ASEAN encompasses more than 600 million people and states of varying development.

While it is far less tightly integrated than the European Union, which is exceptional when it comes to such a close union of countries of similar development, ASEAN also has ambitions for an inclusive, interoperable DPI for stronger economic integration. However, the ASEAN Digital Economy Framework Agreement (DEFA) negotiations are slow going, with Singaporean and Indonesian ministers previously calling for faster progress.

Meanwhile, in the European Union, the EUDI marches on. And the Entrust experts also spoke on its significance. “EUDI is a real step change,” said Sienra. It introduces clear rules, standardizes specifications, while a deadline-driven mandate propels the entire EU bloc forward, something rarely achieved at this scale, he remarked.

While member states begin from varied starting points, technical standards alone won’t ensure success, however. What’s essential is strong governance and mutual recognition, with these being the levers that will determine real-world adoption. Technical bridges and policy bridges are what’s needed to cross borders, Sienra says.

Pantula nodded to eIDAS 2.0 as it defines concrete, practical use cases that span public and private sectors, integrating business and government needs alike.

The broader goal is to establish a trusted, interoperable digital identity ecosystem. The EU’s regulatory clarity and commitment to mutual recognition go beyond administrative strengths, they actively shape markets. This regulatory leadership fosters innovation while channeling diverse perspectives and research agendas toward a shared objective, Sienra argued.

He highlighted Covid certificates, which offered a glimpse of what’s possible under pressure, but they lacked staying power. Their failure at borders imparted a lesson: speed without assurance opens the door to fraud. The full podcast with these insights can be found here.

Decentralized DPI gaining momentum

Over on LinkedIn Rahul Parthe, chairman and co-founder of Tech5, is making the case for decentralized digital public infrastructure (DPI). Tech5 is based in Geneva, Switzerland, and focused on “developing disruptive biometric and digital ID offerings” via applying AI and machine learning technology.

Parthe highlights the progress made over the past decade, with landmark initiatives such as India’s Aadhaar and UPI, the European Union’s EUDI Wallet, Smart Africa’s blueprint, and national ID programs across the world. DPI has the potential to drive inclusion, efficiency, and economic growth, he exhorts.

However, Parthe argues that centralized models of DPI, which were once the default, are increasingly unsustainable. Early implementations relied on top-down architectures, centralized databases, and fixed service points. While effective in the short term, this approach has exposed significant vulnerabilities.

Centralized systems are costly to maintain, prone to cyberattacks, and often inaccessible to rural or underserved populations, he claims. Moreover, they can stifle innovation. “With government owning and running everything, the private sector’s role is limited to integration — not co-creation,” he writes.

Parthe believes a decentralized model of DPI is the future. In this framework, the state remains the trust anchor, but the infrastructure is distributed across citizens, institutions, and private actors. Identity credentials, payment tokens, and health records are stored in citizen-controlled wallets and institutional nodes, reducing the risk of single-point failures and enhancing system resilience.

He says decentralization translates to lower costs as existing devices such as smartphones are leveraged; tapping into networks operated by banks, telecoms, and other service providers. Then, governments can shift away from expensive centralized infrastructure and adopt a shared ecosystem model. This not only reduces taxpayer burden but also accelerates deployment.

Decentralized DPI expands access, Parthe argues. Instead of requiring citizens to travel to fixed service points, the system reaches them — whether they are rural farmers, urban workers, refugees or migrants. Offline capabilities and verifiable credentials ensure that even those without consistent internet access can participate.

Privacy and trust are central to this shift. Technologies like selective disclosure and zero-knowledge proofs allow users to verify their identity or eligibility without revealing sensitive personal data. Decentralized DPI fosters ecosystem-led growth as governments no longer need to build every application or service themselves, Parthe says.

“By establishing a trust framework and open standards, they enable banks, fintechs, healthcare providers, and innovators to build on top,” he writes. “The result? A thriving digital economy that extends well beyond government services.”

Article Topics

digital government  |  digital ID  |  digital identity  |  digital inclusion  |  Entrust  |  financial inclusion  |  government services  |  Indonesia  |  TECH5