Digital identity’s next phase is about trust, not technology

As digital identity programs mature around the world, the biggest challenges are shifting from technology deployment to governance, interoperability and adoption. Those themes emerged during a webinar hosted by Financial Innovation for Impact (Fii), which explored how governments and industry are building digital identity ecosystems that support eKYC, financial inclusion and digital public infrastructure (DPI).

The webinar follows the launch of global surveys by Fii and the Cambridge Centre for Alternative Finance (CCAF) that aim to map how eKYC systems are being implemented around the world. Speakers explored what separates successful digital identity programs from those that struggle to achieve adoption, drawing lessons from implementations in India, Africa and the European Union.

Governance before technology

Rajesh Bansal is the former CEO of Reserve Bank Innovation Hub, and one of the founders of India’s Aadhaar national digital identity scheme. He says the best first step to functional, digital identity is to create a governing rulebook – then allow it to evolve as the system matures. “Treat it like a utility, like telecom, like electricity,” he says, emphasizing the importance of privacy, inclusivity and consent by design in providing a public good.

Two panelists represent different perspectives from Africa: Mesud G. Reta, executive director for the Consortium of Ethiopian Human Rights Organizations (CEHRO), and Ronald Mugisha, senior cyber and fraud risk officer with the Uganda Banker’s Association. For Mugisha, having a financial institution hold accountability has helped with uptake of digital ID in Uganda, and he hopes the model might be repurposed to address the country’s unverified refugees.

Reta offers the perspective from civil society, for whom governance is of utmost importance. He says effective governance means asking a lot of questions – and finding answers that respect human rights, and prioritize inclusivity. In Uganda’s MOSIP-based, bank-linked system, clarity on who has access to what data can be lacking, and undocumented and displaced people can be shut out of the scheme, Reta says. Technology cannot always reach rural and remote communities.

For the EU, a level regulatory playing field is important in establishing digital identity interoperability. The EU Digital Identity Wallet (EUDI Wallet) scheme is intended to serve as infrastructure, but it is to be applied across a landscape in which different member states are at different stages of digital ID adoption, with varied regulatory regimes. Christiane Kirketerp de Viron is acting director for cybersecurity and trust at the European Commission, and she says legislation is just a foundation – but the real key to success is building an ecosystem between regulators, businesses and other stakeholders, “to make sure there are actually things to put in the wallet.”

She says it’s also critical to keep digital ID optional – and making the experience good by offering “a smooth way in.” A wallet and the digital ID it houses need multiple use cases to reach a critical mass of citizens.

Trust drives adoption

Taken together, the panel’s various perspectives create a picture of a complex problem with some basic, foundational commonalities across jurisdictions. To succeed, digital ID has to be useful. It has to be easy to onboard people, and it has to be easy for them to use – preferably, across international borders. It has to start and proceed with privacy, human rights, consent and inclusion in mind, and respect user data as sensitive information. And it has to be ethical.

“It’s all about trust in the end,” says Katrin Arnold, Fii’s programme lead and lead economist. Transparency is not optional; people must be told who is building a digital identity system, who can use it and what it is to be used for. Both private sector and government schemes face trust challenges unique to their models – which makes it more important to ensure communication is a priority; strong, clear, transparent communication is a trust signal.

As Bansal notes, a bit of bad messaging can set a project back significantly. “In India we were told our data is stored in the U.S. by the FBI. We had to go to the press and tell them that this was not the case. So it was a big issue in terms of building trust.” Kirketerp de Viron also understands the hazards of half-hearted communication: the EUDI Wallet is popular among those who know of it – but many people still do not.

The ideas that underpin digital ID are not a hard sell: privacy, convenience, security, inclusivity. Although pressing questions remain, implementing digital identity at scale is possible. The question rests, then, on whether or not it is a trustworthy endeavor – and that falls to governments to behave in a trustworthy manner.

Article Topics

Cambridge University  |  digital ID  |  digital inclusion  |  financial inclusion  |  Financial Innovation for Impact  |  KYC