The Value of Digital Identity, Davos 2019

In the 2019 World Economic Forum, the value of digital identity was a gut issue. Our team summarized Davos 2019.

The 2019 World Economic Forum went about its usual business of engaging the foremost political, business, and other leaders of society to shape global, regional, and industry agendas. This year, digital identity (digital ID) was a hot topic in Davos, Switzerland. A number of panels addressed the social, economic, and political ramifications of digital identity, its current state of adoption, and tangible steps to facilitate greater adoption. As many of the topics discussed at this year’s conference intersect with the long-term vision of Metadium, we thought it would be a good idea to summarize some of the highlights.

Picture by Enel

The Value of Digital Identity

Over 60% of the global GDP is expected to be digitized by 2022. More people and businesses are interacting online, and digital identity sits at the heart of those interactions. How institutions and enterprises develop digital identity platforms will greatly determine how people interact online, what economic opportunities will be presented to individuals, and establishing trust. According to Manju George, a head of Platform Services, Digital Economy and Society, World Economic Forum, parties responsible for creating digital identity platforms must ensure that economic opportunities pertaining to digital identities are distributed accordingly.

Today, only 50% of the world’s population is using the Internet. Over a billion people, according to the World Bank, do not have a legally-recognized identity. This excludes a substantial portion of the world’s population from participating in the digital economy. According to a recent study by the McKinsey Global Institute, 1.7 billion people could be included in greater economic prosperity if they have access to a digital ID. Private and public institutions stand to benefit greatly by implementing digital IDs to individuals, namely through cost reductions as well as decreased cases of fraud.

James Manyika, Chairman & Director at the McKinsey Global Institute, shares insights on the economic benefits of establishing digital identity platforms at the 2019 World Economic Forum, Davos (University of Colorado, Boulder)

The World’s Largest Digital Identity Platform (behind Facebook)

India started its digital identity journey 10 years back in-effort to make the delivery of its public services more efficient. Nandan Nilekani, Chairman of Infosys, noted how establishing a digital ID platform was an inclusion measure for individuals who needed ID to migrate, travel, and get hired for jobs. The Indian government created a biometric digital ID platform, and currently has a user base of over 1.2 billion people. Many of India’s citizens use it to open a mobile bank account or even board a plane. The most important aspect, however, is the provision of financial inclusivity. Around 600 million people in India have Aadhaar (the government-issued platform), linked to their bank accounts and it has proven to be an integral tool for financial inclusion. Because the ID is linked to a bank account, users can make direct cash transfers; India currently has the largest volume of cash transfers in the world because of this system.

5 Crucial Elements That Make a Good Digital Identity

  1. Purposefulness — a platform would tokenize aspects of one’s identity where it wouldn’t showcase unnecessary aspects of one’s identity in a particular setting (i.e. proving one’s age at a bar without having to reveal place of birth, education, occupation, etc.).
  2. Inclusivity — needs to be a means of empowerment and not intentionally excluding a community that wants to participate. This includes the distribution of state benefits, and other prerogatives; it certainly should not be used for exclusionary purposes.Therefore, ethnicity or gender should never show up in an ID system.
  3. Usefulness — while some systems like the one in India have gained a lot of traction there are a lot of systems in countries like Nigeria or Mexico that have low user rates at 10% or less. The individual needs to find value in the transactions and functionalities of the platform. The fundamental tenet behind value is establishing trust. Institutions cannot misuse or deceptively aggregate unnecessary data on behalf of users.
  4. Offering choice — Individuals choose when they can see how systems use their data and are able to choose what data they share for which interaction, with whom and for how long.
  5. Security — According to James Manyika from the Global McKinsey Institute, it’s vital that corporations and government institutions take into consideration a standard of principles, values, and ethics.

Conclusion

One thing is for certain, as the world migrates more towards a digital economy, digital identity platforms will be crucial to ensuring inclusivity, transparency, and the value of the global market. Many of the aforementioned points by the world’s leading politicians and business executives pointed out the importance of sovereignty over one’s identity. Leave your comments below- we’d love to hear your thoughts!

Love,

Team Metadium


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