The future of Digital Identity made in Germany
Taking a look at the German ecosystem for Digital Identity
It is Monday, the 4th of May. It’s now been 34 days in home office. My daily morning coffee is steaming in front of me, served in my favorite cup. The sun is shining through my window, it’s going to be another beautiful spring day. However, I don’t have much more time left to think about the weather as my first video call of the day is coming up: team meeting, in which we’ll be discussing the tasks for the week.
I take a sip from my coffee and turn on the laptop. Mails, Slack, Twitter, ZEIT Online — in that order and no other. Order is a must these days.
Usually I go through my mails in the morning rather quickly. It goes like this: spam, spam, spam, holiday offers (I should get rid of these), newsletters, done. On to Slack, no, wait, one newsletter does catch my attention: “Identity crisis: why there will be no digital identity made in Germany” is written in capital letters. It is an article of the popular financial blog “Payment & Banking”, which covers the fintech industry around Germany.
A short time later I received the invitation link to the virtual meeting with my colleagues. There’s a lot to do this week, the tasks are diligently collected and prioritized. But for me it is clear what will be my priority number one: the article about the digital identity made in Germany. There the author depicted an all too grim image of the German projects for digital identification. And the icing on the cake was the stronger negative outlook on the future of the scene.
You can find the original article from Payment & Banking here. (The article is in German, however you’ll find all relevant information on here)
I find this way too pessimistic which is why I’ll show you in this article why I believe that there will be a digital identity made in Germany after all. Here we go!
What is a Digital Identity?
A digital identity represents certain aspects of your real identity on a digital level. This includes all your personal data that is needed for a unique digital identification. It is much more than just the data you enter into your Facebook account: We are talking about authentic digital identities, data that is verified and which you can use, for example, to open up a bank account or sign a contract completely digitally.
Three big players — not so big at all
The German projects listed by the author can be counted on one hand. The three most prominent — Verimi, YES, netID — are joint ventures of well-known German companies. Verimi alone is a cooperation of Deutsche Bank, Daimler, Allianz, Lufthansa, Telekom, among others. The goal is to provide the user with a digital identity, which he can use to log in to all Verimi partners.
YES is a similar initiative. Yet, the focus lays on the banking sector. Sparkassen and Volksbanken work together to use the already deposited user information for further logins to other bank accounts. It also offers the opening of an account completely digitally.
netID is backed by famous media groups such as Sat.1, ProSieben and RTL, as well as internet providers like 1&1 and GMX. They promote an European alternative to Facebook’s and Google’s Single Sign-On service (not a verified digital identity). The added value for the user is data protection à la GDPR.
There is one striking aspect that is part of all mentioned projects: All three have important and big companies as initiators. That’s also the reason (and sadly the only one) why they are listed here. It is definitely not because they are having major successes: Verimi is already live and offers a login to two dozen partners — but not much more so far. YES has been announced as a game changer and is allegedly integrated by a thousand Sparkassen and Volksbanken. However, it is not possible to find a login button so far. “Only one login in the internet”-netID will hardly prevail against the offers of the tech companies from overseas. Convenience beats data protection.
Wait, that’s it?
It looks like the author does not see a bright future for the digital identification made in Germany. The two other projects mentioned by the author also do not hold a large number of users or providers that have integrated their services. AUTHADA and AusweisApp 2 (this time without well-known supporters) offer digital identification via the German electronic identity (eID). The main issue is that the eID functions are not widely accepted and represent a great hurdle for the casual user.
So far, the author of the Payment & Banking article presented the German scene correctly. However, two errors in reasoning find their way into the article:
- firstly, he reduces the Germany ecosystem for digital identification to these handful of projects.
- Secondly, he states that there are use cases for a verified digital identity, but these do not occur often enough.
Clearly, the three best known projects have to be mentioned in an article on digital identity. But they should be not shown as the only solutions and certainly not as the most promising ones. Names like Lufthansa, Daimler, ProSieben and Sparkasse create trust and give the project significance.
But if the solution itself is not developed in a user-friendly way, if the user does not see any clear added value for him and if the product is based on an outdated centralized data storage concept, then even financially strong and prominent partners are useless.
The German ecosystem has so much more to offer: Various startups are working on innovative solutions for a simplified and secure digital identification. The solutions don’t require the eID functions, nor is the personal user information stored centrally (and thus, vulnerable) and the user actually gains more digital independence from the large Internet companies. Examples of such startups and their products are Jolocom, myEGO2GO,
helix id and Spherity.
These projects clearly show that there are alternatives. However, they follow other approaches to digital identification and are not backed by prominent companies which is probably why they are not listed in Payment & Banking’s article.
Of course, the author of the article is free to write whatever he wants. Yet, he gives a crushing assessment after an incomplete list of a handful of German projects. This is misleading and gives me the strong urge to bury my head in the sand. Why not leave it to Silicon Valley then to provide us with a verified digital identity? Data protection would be optional, but at least it would be user-friendly. Right?
Verified digital identity as an enabler for a sustainable digital future
A further shortcoming in the article is the assumption that the attempts to create a digital identity made in Germany will not be crowned with success due to its limited use cases. At first glance, this might seem to be true as, although the use cases exist, they do not happen on a regular basis: How often do you plan to open a bank account, or make a new mobile contract?
However, this line of thought only considers the business models of companies that offer a digital identity solution. Let’s say that Verimi receives a commission payment from the respective bank for each completed bank account opening with a Verimi profile. Since this is a rare occurrence, it means less income for Verimi. But nothing else.
For me as the user, the income of the providers is not of interest. I simply want fast and seamless processes for previous tedious and burdensome registrations and authentications in the digital space. The demand exists, ergo we will have offers.
To use limited use cases as a reason for the failures of the most well-known German projects is misguiding. The failures can also not be traced back to the fact that the projects don’t have enough publicity or that they are lacking financial resources. Does this not suggest itself that the products and solutions are not well thought out and do not meet the needs of the users?
Additionally, one can argue that verified digital identities are more than just a quick opening of a bank account. It almost sounds clichéd: the rapid digitalization of our lives requires new and improved methods to identify people digitally. While everyone’s talking about autonomous driving, highly digitalized factories, artificial intelligence that is supposed to imitate the human brain, we still cannot be sure of our digital opposite’s authenticity. Talking about fully automated robot factories is like wanting to travel to another galaxy even though we’ve just made it to the moon.
First of all, we need a secure and verified digital identity for people, companies and also things. That is a prerequisite for the industry 4.0 and all the great stuff that people are imagining of a digital future. Further and more frequent use cases will follow with an increasing trend of digitalization.
The identity crisis as the light at the end of the tunnel
Finally, I would like to take a look at the article’s title, in particular at a specific word. According to the author, the digital identity made in Germany is in a crisis. Currently a very common word, it fits the gloomy mood of the article.
The nature of a crisis is to raze old and longstanding structures to the ground — quickly and destructively. What the word also implies, however, are the opportunities for new and innovative approaches to establish themselves. Without a crisis this wouldn’t be possible or just in a slow manner.
This crisis is a silver lining on the horizon for the digital identity made in Germany. German providers can use this time to break away from outdated patterns of thought and follow other more promising approaches. They can seize the opportunity and give the user digital freedom through data sovereignty. And they can stand out from the competition from overseas and do more than just improving the data management of companies: If users know that they are more than a by-product in the everlasting promises of a better digital future, then the digital identity made in Germany will emerge.
This article does not reflect the views of helix id or Blockchain HELIX, but only the personal views of the author.
