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We've come a long way from the days when identity verification meant simply presenting a handwritten document or a personal endorsement. The Digital ID movement signals a new era where you identity it is a digital entity, stored and accessible on the Internet.
This change promises many benefits, such as the positive transformation of efficiency, safety and fraud prevention. Here's the challenge, though: transitioning isn't an overnight fix. It is a gradual, evolutionary process.
Physical documents aren't going anywhere – yet
Consider the reliability of a physical document – tangible, verifiable and reliable across industries. Despite the charm of digital transformation, a 2024 Forrester Consulting study commissioned by Regula finds that 46% of organizations still manually verify documents, including remote configurations. This support is even higher in sectors with strict security requirements, such as Aviation (63%) and Finance (44%).
Why the paper link? It's easy. Physical documents they are reliable and popular, and they offer unmatched authenticity. They work. For business leaders, this means that a gradual transition to digital identity systems isn't just sensible – it's essential. Current systems can coexist with emerging technologies, ensuring operations remain smooth while new methods are integrated.
Barriers to a digital dream
The dream of a global Digital ID system faces significant challenges. Chief among them is the lack of universal legislative frameworks. It's like trying to conduct a global orchestra without a shared sheet of music.
According to the study, 74% of respondents emphasize the need for unified global standards to ensure seamless integration and acceptance worldwide. This lack of scope means that businesses are navigating a fragmented landscape, where INTEROPERABILITY across borders is a complex challenge.
Moreover, technological disparities create uneven progress. While some regions, such as the United Arab Emirates, are moving forward with advanced digital infrastructures, others, including the US and Europe, are taking a more cautious approach due to strict regulations. This disparity underscores the importance of tailored strategies that take regional preparedness and capabilities into account.
Concerns and realities
As businesses consider the digital leap, some Digital ID concerns weigh a lot:
- 50% worry about the rise of data breaches and cyber security threats.
- 46% are concerned about the need for robust security frameworks to mitigate the risks of data breaches.
- 44% fear privacy implications due to data surveillance and tracking.
- 35% point to dependence on technology that can lead to system failures.
- 35% see the risk of identity theft and digital credential fraud.
These concerns are not trivial. They reflect the real and current challenges of a digital transition. But they also point to the need for robust, secure and reliable systems that can build trust over time.
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Hybrid solution
In this complex landscape, a hybrid approach to digital IDs emerges as the most pragmatic way forward. This strategy includes both digital and physical verification methods, allowing businesses to transition at a manageable pace. By holding physical documents alongside digital IDs, organizations can leverage the strengths of both systems, ensuring reliability as they gradually adopt new technologies.
For business managers, this hybrid model offers a reassuring compromise. It minimizes disruptions to existing processes and provides the flexibility needed to explore and integrate digital solutions incrementally.
At the same time, to adopt digital ID in the current IDV (Identity Verification) process, a business must take several steps. First, it must assess the compatibility of its existing infrastructure with digital ID technologies, ensuring that it can seamlessly integrate the new system. This includes upgrading or adapting current software and hardware to support digital ID functionalities. Next, the business should choose 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 new system. Additionally, the business must develop a clear privacy and data protection strategy, addressing potential cyber threats and ensuring compliance with data protection laws. Finally, a thorough testing phase is essential to identify and resolve any issues before the digital ID system is fully deployed, ensuring a smooth transition and maintaining the integrity of the IDV process.
Standard issue
The development and adoption of Digital ID systems will require collaborative innovation from authorities, businesses and stakeholders in the IDV market. Major players such as the International Civil Aviation Organization (ICAO) and the International Organization for Standardization (ISO) are working to create frameworks for the adoption of Digital ID. Their efforts promote interoperability, security and privacy across different systems. However, creating comprehensive standards is a painstaking, time-consuming process.
However, even if all the standards are fully prepared and verified, the next stage involves implementing the software according to these standards. This is not just a single module, but a complete set of systems for each vendor, and there will be many vendors. Each vendor may interpret the standards differently, leading to inevitable compatibility issues.
This brings us to the necessity of having process standards as well as testing and certification standards. However, even if vendors pass certification, questions about the completeness and reliability of the software will remain, especially when used by end users. For example, an SDK may be fully functional, but during integration, developers may cut corners and not use all the necessary components.
Who will handle the certification? Labs will be needed to prepare the test software, and these labs will charge substantial fees for running the time-consuming tests. Not all vendors will be eager to invest in certification. Given that each country can have multiple vendors, the scale of the problem is huge.
Currently, passports operate without any online infrastructure, but digital IDs will need online services capable of handling massive volumes of requests, potentially from around the world. Imagine 300 million concurrent requests in the US alone. This looks like the scale of Facebook, Instagram or Google, with dedicated data centers and more. The cost can be astronomical. Poorer countries may decide they do not need such systems or opt for minimal implementations.
As a result, we will have many variants of documents: not only paper documents, paper documents with chips and digital IDs, but also many different types of digital IDs.
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A marathon, not a sprint
The journey to widespread adoption of Digital ID is indeed a marathon. Even after comprehensive standards are developed, global adoption will take time. The initial rollout of digital IDs will still require physical passports or identity cards, underscoring the continued importance of traditional identification methods. Additionally, implementation costs and the need for robust infrastructure further slow down the transition.
For business owners and managers, the introduction of digital ID is best viewed as a gradual evolution. After all, on this long road to digital transformation, patience and pragmatism will be your greatest allies.