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We’ve come a good distance since the days when identity verification simply meant presenting a handwritten document or a personal endorsement. The Digital ID movement signals a latest era in which your identity is a digital entity, stored and accessed online.
This change guarantees many advantages, similar to positively transforming performance, security, and fraud prevention. But here’s the challenge: the transition isn’t an overnight overhaul. It’s a gradual, evolutionary process.
Physical documents won’t disappear – for now
Consider the reliability of a physical document – tangible, verifiable, and trusted across industries. Despite the allure of digital transformation, 2024 Forrester Consulting study commissioned by Regula reveals that 46% of organizations still manually confirm documents, including in distant setups. This reliance is even higher in sectors with stringent security requirements, similar to aviation (63%) and finance (44%).
Why the paper addiction? It’s easy. Physical documents are trusted and familiar, and offer unparalleled authenticity. They work. For business leaders, which means a gradual transition to digital identity systems is not only sensible – it’s essential. Current systems can coexist with latest technologies, ensuring smooth operations while integrating latest methods.
Barriers to the digital dream
The dream of a global Digital ID system faces serious challenges. The most significant of those is the lack of a universal legal framework. It is like trying to conduct a global orchestra without a common musical rating.
According to the study, 74% of respondents emphasize the need for unified global standards to ensure seamless integration and acceptance around the world. This lack of compliance implies that firms are navigating a fragmented landscape where interoperability across borders is a complex challenge.
In addition, technological differences are causing uneven progress. While some regions, similar to the UAE, are racing ahead with advanced digital infrastructure, others, including the US and Europe, are taking a more cautious approach due to strict regulations. This difference underscores the importance of tailored strategies that take into account regional readiness and capabilities.
Fears and reality
As businesses explore the digital leap, several Concerns about digital identification weigh a lot:
- 50% fear increased data breaches and cybersecurity threats.
- 46% are concerned about the need for a robust security framework to mitigate the risk of a data breach.
- 44% are concerned about the impact of knowledge surveillance and tracking on privacy.
- 35% indicated that dependence on technology could potentially lead to system failures.
- 35% imagine there is a risk of identity theft and fraud with digital credentials.
These concerns are not trivial. They reflect the real and present challenges of digital transformation. But additionally they point to the need for robust, secure, and reliable systems that may build trust over time.
Hybrid solution
In this complex landscape, a hybrid approach to digital IDs is emerging as the most pragmatic path forward. This strategy encompasses each digital and physical authentication methods, allowing firms to transition at a manageable pace. By maintaining physical documents alongside digital IDs, organizations can leverage the strengths of each systems, ensuring reliability while progressively adopting latest technologies.
For business managers, this hybrid model offers a reassuring compromise. It minimizes disruption to existing processes and provides the flexibility needed to progressively explore and integrate digital solutions.
At the same time, to adopt digital IDs into the current identity verification (IDV) process, a company needs to take several steps. First, it should assess the compatibility of its existing infrastructure with digital ID technologies, ensuring a smooth integration of the latest system. This involves upgrading or adapting current software and hardware to support digital ID functionality. Next, the company needs to select a reliable digital ID provider, prioritizing those with strong security measures and compliance with regulatory standards. Implementing digital IDs requires training employees to effectively manage and operate the latest system. Additionally, the company should develop a clear privacy and data protection strategy, addressing potential cyber threats and ensuring compliance with data protection regulations. Finally, a thorough testing phase is essential to discover and resolve any issues before the full implementation of the digital ID system, ensuring a smooth transition and maintaining the integrity of the IDV process.
Standard Edition
The development and adoption of Digital ID systems would require collaborative innovation from governments, businesses, and stakeholders in the IDV market. Key players similar to the International Civil Aviation Organization (ICAO) and the International Organization for Standardization (ISO) are working to establish a framework for Digital ID adoption. Their efforts support interoperability, security, and privacy across systems. However, creating comprehensive standards is a painstaking, time-consuming process.
However, even if all standards are prepared and fully verified, the next step is to implement the software according to these standards. This is not only a single module, but a comprehensive set of systems for each vendor, and there might be many vendors. Each vendor may interpret the standards in a different way, which leads to inevitable compliance issues.
This brings us to the need for process standards, in addition to testing and certification standards. However, even if vendors pass certification, questions about the completeness and reliability of the software remain, especially when used by end users. For example, an SDK could also be fully functional, but during integration, developers may cut corners and not use all the needed components.
Who will handle the certification? Labs might be needed to prepare the test software, and these labs will charge significant fees for conducting time-consuming tests. Not all suppliers might be willing to invest in certification. Considering that each country may have many suppliers, the scale of the problem is enormous.
Passports currently operate without any online infrastructure, but digital IDs would require online services that may handle massive request volumes, potentially from throughout the world. Imagine 300 million simultaneous requests in the US alone. That’s on the scale of Facebook, Instagram or Google, with dedicated data centers and more. The cost may very well be astronomical. Poorer countries may resolve they don’t need such systems or opt for minimal implementations.
As a result, we are going to have many variants of documents: not only paper documents, paper documents with chips and digital IDs, but also many various kinds of digital IDs.
Marathon, not sprint
The path to widespread adoption of Digital ID is indeed a marathon. Even with comprehensive standards in place, global adoption will take time. Initial issuance of Digital ID will still require physical passports or ID cards, underscoring the ongoing importance of traditional identification methods. In addition, implementation costs and the need for robust infrastructure are further slowing the transition.
For business owners and managers, the introduction of Digital ID is best viewed as a gradual evolution. Ultimately, patience and pragmatism might be your biggest allies on this long journey to digital transformation.