Digital Identity: New Research Reveals the Potential for Growth and Prosperity
The digital revolution is changing our lives in innumerable ways, creating more access to opportunities than ever before. Cutting-edge technology like digital ID and other innovations are giving us the power to unlock remarkable new possibilities for economic prosperity and social inclusivity. We stand on the cusp of an exciting, vibrant future and these advancements are the key to unlocking it.
Harnessing Technology for Financial Inclusion and Social Equity
The digital evolution is in full swing, and it’s shaking up the world around us. Smart phones, biometric data and digital ID technologies are ushering in a whole new era of economic growth and social equity. We’re talking about incredible advancements that are already transforming the way we live and work — and it’s only the beginning!
By leveraging the power of modern technology, businesses have the potential to open up new opportunities for underserved populations. As a result, more people will be able to benefit from the economic growth that is taking place, bringing about a brighter future for all.
“New research by the McKinsey Global Institute “shows how good digital ID is a new frontier in value creation for individuals and institutions around the world.”
The potential for digital ID to revolutionize how we interact with the world around us is nothing short of remarkable. From financial services to healthcare and education -digital ID has the potential to open up a world of unlimited opportunities.
And yet despite its numerous advantages, many people are still reluctant to embrace secure digital identity due to its perceived implications of being closely watched and monitored. To ensure its acceptance on a wide scale, privacy must be prioritized. Governments must ensure that the technology is used to provide trust and security by establishing a framework of fundamental rights protection, such as the EU’s General Data Protection Regulation (GDPR) — a milestone in data privacy.
How ‘Good’ Digital ID Could Change the Lives of Billions
The World Bank has estimated that nearly one billion individuals across the globe lack any legal recognition of their identity, while an additional 3.4 billion possess some form of legal recognition, but not the necessary tools to participate in the digital sphere. A further 3.2 billion have valid IDs, yet they may be unable to make full use of them.
‘Good’ digital identity has the power to bridge this gap, imparting newfound access to goods and services, better fraud prevention, improved protection of rights, and a more straightforward way to join the digital economy.
“Good digital ID needs to be personal, like a physical wallet in the real world, unique to you and private. You control your own identity, and you selectively share what’s in your wallet, your passport, driver’s licence, national insurance card or whatever it may be; and last but not least with whom. Privacy and security are necessities, identity is a human right!“ IDENTITY MATTER PART I
This could mean more freedoms and opportunities for billions of people who have been mostly excluded from the modern world systems.
New Technologies, such as Blockchain, are Facilitating the Rapid Growth of Digital ID
Recent advancements in technology have enabled the safeguarding of citizens’ security and privacy on a global scale and although levels of acceptance differ vastly between countries, the adoption of ‘good’ digital ID is increasing rapidly.
Its potential use cases are endless, from passports to voting, banking, filing taxes, and many other areas where citizens must authenticate their identity to the government. This technology could have an enormous, far-reaching impact on social and economic development.
The digital infrastructure that enables new ways for identification is growing in reach and becoming more affordable by the day. According to McKinsey Global Institute, in 2017 alone, an astonishing quarter-billion people went online for the first time, further increasing the potential reach of digital ID.
Thanks to technological advances and cost reductions, it’s now possible even for developing countries to bypass paper-based identification methods and jump right into the digital age.
As the adoption of blockchain technology and encryption techniques is growing, the ability to authenticate and protect digital identities, while encrypting data to ensure its safety from malicious actors becomes more sophisticated.
Unlocking Potential Economic Value Equivalent of 3–13% of GDP in 2030
A recent McKinsey study has revealed that by 2030 digital ID could unlock up to 13% of a given emerging economy’s GDP and up to 3% of a mature economy’s GDP — an economic value equivalent to billions of dollars. In both emerging and developed countries, the implementation of digital ID could have a substantial impact; however, advanced digital ID programs with data-sharing features may be needed to derive the most value.
The study further reveals that estimated 65% of the value would benefit individuals in emerging economies, and 40% would go to those in mature economies. This could be a major windfall for citizens and could potentially revolutionize the global economy.
The success of digital ID can especially be seen in Estonia, where one third of voters used their digital accounts to cast their ballots, securely confirming their identity and allowing them to exercise their democratic rights.
India’s Aadhaar program has enrolled 1.2 billion people with digital IDs. This technology has enabled citizens to prove their identity when accessing food banks and other services, even in remote areas. The people of Malta have also been able to leverage digital IDs to create digital signatures and protect their online purchases.
In a bid to push digital transformation, the World Bank recently provided Rwanda with $100 million to help enrol and issue new digital ID credentials to 75% of the population. As the country strives to attract inbound investment, having ‘trusted’ ID programmes in place will be essential.
The use of digital technology to secure identity and transactions is a powerful tool that is transforming the way citizens interact with the world around them.
Public and Private Sectors Must Work Hand-in-Hand to Create a System that is Transparent, Equitable and Affordable for All
Regulators and the private sector must work closely together and take the initiative to ensure digital ID programs are robust and secure. They must ask themselves essential questions such as: How can we prevent misuse of digital ID? How do we guarantee users control their personal data? What is the best approach to developing a universal standard? And how can we expedite implementation?
The answers lie in constructing a suitable legal framework, fostering interoperability, and establishing a firm governance structure. By taking these steps, countries can leverage the power of digital ID and unlock a world of unimaginable possibilities and more rights for each and everyone.
IAMX places great emphasis on building products that enable users to regain complete control over their personal data on the digital web and as such has just recently joined the OpenWallet Foundation (OWF) as a founding member, supporting their mission to build interoperable, secure and privacy-protecting wallets.
“IAMX would like to get involved with the OpenWallet Foundation because there is an opportunity to realise the shift of identification power from centralised entities to the individual. The era of your identity serving as the product, controlled and capitalised by corporations is coming to an end. It is time for the people to take ownership of their identity. Digital ID wallets will be the individual gateway for people to participate in digital life. An open source solution is the best way to develop interoperable wallet solutions. IAMX is here to help shape this process and would like to contribute to this ecosystem,” — Tim Brückman, co-founder, IAMX AG.
For more information and statistics on this subject, also read: McKinsey Global Institute or World Economic Forum, Agenda 2023, OpenWallet Foundation
About IAMX
IAMX is a token-based SSI and authentication protocol that empowers individuals with the means to own their identity. Adhering to the strictest of regulatory standards for identity protection, IAMX builds on the foundational principles of SSI to provide a robust and secure system where individuals are able to take control and manage their identity. Users of IAMX will realise significant time and cost savings through novel approaches to identity management and e-commerce transactions, like 1-click fulfillment, which are legally binding and maintain local regulatory compliance. With users in control of their identity data, time-consuming processes like KYC and KYB become near-instant, highly secure transactions.
IAMX builds upon the foundations of SSI, blockchain, and decentralised identifiers (DIDs), enabling individuals, organisations, or any entity to prove their identity independent of external parties or centralised authorities. This way, the authenticity of anything tied to an IAMX DID can be independently confirmed by the entity holding the DID.
IAMX is at the forefront of the Web3 revolution, bringing the world’s most secure, decentralised, and user-friendly SSI solution to the Internet. Adding the layer of identity and authentication to the Internet, with IAMX you can treat the Internet like you are always logged in. Pursuant to its mission and vision, IAMX is working to solve the problem of providing an identity to the billions of people who do not currently have a state-recognised, legal identity. Using a Biometric Identity Gateway, users with or without state-level identification can create their own identity for use online, one that relies on their unique physical attributes, including their face, iris, and fingerprints.
