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We've come a long way from the days when identity verification simply meant presenting a handwritten document or an in-person confirmation. The digital ID movement ushers in a new era where your identity is a digital entity that can be stored and accessed online.
This change promises many benefits, such as positive improvements in efficiency, security and fraud prevention. But here lies the challenge: the transition is not an overnight change. It is a gradual, evolutionary process.
Physical documents remain – for now
Consider the reliability of a physical document – tangible, verifiable and trustworthy across different industries. Despite the appeal of digital transformation, a 2024 Forrester Consulting study commissioned by Regula shows that 46% of organizations still review documents manually, even in remote setups. This reliance is even higher in sectors with strict security requirements, such as aviation (63%) and finance (44%).
Why so much paper? It's simple. Physical documents are trustworthy and familiar, offering unmatched authenticity. They work. For business leaders, this means that a gradual transition to digital identity systems is not only sensible, but essential. Current systems can coexist with new technologies, ensuring operations continue smoothly while new methods are integrated.
The obstacles to a digital dream
The dream of a global digital ID system faces major challenges. The biggest of these is the lack of a universal regulatory framework. It is like trying to conduct a global orchestra without a common sheet of music.
According to the study, 74% of respondents emphasize the need for consistent global standards to ensure seamless integration and worldwide adoption. This lack of alignment means that companies must navigate a fragmented landscape where cross-border interoperability is a complex challenge.
In addition, technological differences lead to uneven progress. While some regions, such as the United Arab Emirates, are making great strides with advanced digital infrastructures, others, including the United States and Europe, are taking a more cautious approach due to strict regulations. This disparity underscores the importance of tailored strategies that take into account regional readiness and capabilities.
Related: Your face is a data object – and fraudsters use it to commit fraud. Here are 5 tips for using identity verification
Concerns and realities
As companies consider the digital leap into digitization, several concerns about the digital ID weigh heavily:
- 50% are concerned about an increase in data leaks and cybersecurity threats.
- 46% are concerned about the need for robust security frameworks to reduce the risk of data breaches.
- 44% fear impacts on privacy due to surveillance and data tracking.
- 35% emphasize that dependence on technology can potentially lead to system failures.
- 35% see the risk of identity theft and fraud in connection with digital access data.
These concerns are not trivial. They reflect the real and present challenges of digital transformation. But they also point to the need for robust, secure and reliable systems that can build trust over time.
Related: Deepfakes are on the rise – will they change the way companies verify their users?
The hybrid solution
In this complex landscape, a hybrid approach to digital IDs is proving to be the most pragmatic path. This strategy includes both digital and physical verification methods and allows companies to transition at a manageable pace. By keeping physical documents alongside digital IDs, companies can leverage the strengths of both systems, ensuring reliability while gradually adopting new technologies.
For business managers, this hybrid model represents a reassuring compromise. It minimizes disruption to existing processes and provides the flexibility needed to gradually explore and integrate digital solutions.
At the same time, a company must take several steps to integrate digital IDs into the current identity verification (IDV) process. First, it should evaluate the compatibility of its existing infrastructure with digital ID technologies and ensure that it can seamlessly integrate the new system. This includes upgrading or adapting the current software and hardware to support digital ID features. Next, the company must select a reliable digital ID provider, favoring those with strong security measures and compliance with regulatory standards. Implementing digital IDs requires training employees to effectively manage and operate the new system. In addition, the company should develop a clear data protection and security strategy, address potential cyber threats, and ensure 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 to ensure a smooth transition and maintain the integrity of the IDV process.
Default theme
The development and deployment of digital ID systems requires cooperation between authorities, companies and stakeholders in the IDV market. Key players such as the International Civil Aviation Organization (ICAO) and the International Organization for Standardization (ISO) are working to create frameworks for the deployment of digital IDs. Their efforts promote interoperability, security and privacy between different systems. However, creating comprehensive standards is a careful and time-consuming process.
But even when all standards are prepared and fully reviewed, the next step is to implement software according to those standards. This is not just a single module, but a comprehensive suite of systems for each vendor, and there will be many. Each vendor may interpret the standards differently, which inevitably leads to compatibility issues.
This leads us to the need for process standards, as well as testing and certification standards. However, even when vendors pass certification, questions remain about the completeness and reliability of the software, especially when used by end users. For example, an SDK may be fully functional, but when it comes to integration, developers may cut corners and not use all the required components.
Who will do the certification? Labs will be needed to develop testing software, and these labs will charge significant fees to perform time-consuming testing. Not all vendors will be willing to invest in certification. Given that there could be multiple vendors in each country, the scale of the problem is immense.
Currently, passports work without any online infrastructure, but digital IDs will require online services capable of handling huge volumes of requests, potentially from all over the world. Imagine 300 million simultaneous requests in the US alone. That's like Facebook, Instagram or Google, with their own data centers and more. The costs could be astronomical. Poorer countries could decide they don't need such systems or opt for minimal implementations.
As a result, there will be many document variants: not only paper documents, paper documents with chips and digital IDs, but also many different types of digital IDs.
Related topics: US state now accepts digital driver's license on iPhone
A marathon, not a sprint
The road to widespread adoption of digital IDs is indeed a marathon. Even after comprehensive standards are developed, global adoption will take time. Physical passports or identity cards are still required for the initial issuance of digital IDs, underscoring the continued relevance of traditional identification methods. In addition, implementation costs and the need for robust infrastructure further slow down the transition.
For business owners and managers, the introduction of digital ID is a gradual development. On this long road to digital transformation, patience and pragmatism are your greatest allies.
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