A Digital Identity Evolution? Why Governments Must Act Now

In 2022, it was estimated that the global digital identity market would reach $70.7 billion in 2027 – a significant $24.2 billion increase on the 5-year forecast from 2021. The accelerated growth poses the question - are we experiencing the next digital identity evolution?

The COVID-19 pandemic changed the way individuals and organisations interact with one another. Digital offerings leapfrogged 7 years of progress in a matter of months. Almost overnight, traditional in-person activities moved online, and it became critical to have trusted and secure approaches to identify each other. As the rapid growth of the digital world continues, with new advances such as web 3.0 and the metaverse incoming, there is a risk that current approaches may stifle future growth and negatively impact the opportunities that are beginning to be unlocked.

At the moment, many organisations still rely on paper based or even in-person processes for credential verification before people can access the services they need. These approaches can be difficult to navigate, create opportunities for human error and increase the risk of fraud.

Enabling people to use digital verification methods to access services online and in the physical world could help overcome these challenges, but digital identities will need to have the same level of trust and security before this is possible.  As the primary custodians of identity verification today, governments could be critical to this evolution.  

Progress so far

Globally, governments are taking positive steps to respond to this demand. Recognising the need for ecosystem-wide infrastructure to provide a resilient, secure, and consistent source for efficient and accurate verification of identity, they are committing resources to this digital identity evolution.  In the UK we can see this with guidance documents, like the UK Digital Identity & Attributes Trust Framework, and elsewhere, legal changes, like the eIDAS 2.0 regulation, are helping create the basis for change. These create the right foundations, but they are only the beginning.

Government leaders should look to explore three key areas to help support the digital identity evolution:

• Accountability – Governments should consider creating a single accountable entity, like the interim Office for Digital Identity & Attributes, that is responsible for identity across the various agencies to unify the agenda, create a clear strategy and implement it for the benefit of individuals and organisations.
• Cooperation – Working and engaging with the private sector, other public sector organisations and even other national governments, could help create infrastructure that encourages greater adoption and acceptance across borders and sectors.
• Flexibility – Technology is rapidly changing, and governments should remain flexible to make the most of innovations that could improve user experience. However, this agility must be balanced with maintaining the same high levels of protection for citizens.

Future-proofing the transformation

Whilst governments should act fast to harness the power of evolving digital identity, this could give a rise to different infrastructures in each country. This in turn could be a major missed opportunity to enable digital identities that cross physical borders. This idea is growing, especially with new concepts such as ‘digital nomads’ emerging now that travel has increased as the COVID-19 pandemic subsided.

Whilst this would be a major step forward, it isn’t unprecedented. This level of interoperability and mutual trust already exists with passports, which are verified and accepted globally. So, as governments look to build their own digital identity infrastructure, it is important they talk to and cooperate with their peers globally to identify opportunities to align standards and systems.  

Accenture’s recent report, ‘How Governments can Facilitate a New Digital Identity Ecosystem’, highlights some of the key considerations for leaders as they chart a path forward. It highlights the five key actions governments need to take to create the foundations of trusted digital identities and explores how we got to this point.

This content represents the individual opinions of the author and is provided for general information purposes. It is not to be used in place of consultation with Accenture’s professional advisors. This document refers to marks owned by third parties.  All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied.