Is a Digital Identity Wallet in Africa's Future? - Tabbing Takes 06
Digital identities will shape future everyday realities so it's important that Africa builds a digital identity infrastructure.
Tabbing Takes is a series that looks into the most interesting trends in Africa's digital economy, culture and tech.
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The European Commission is preparing a digital identity wallet for its member States with plans to launch as early as 2022. This digital identity wallet will be stored on a mobile phone or any other personal device and will also be accessible to citizens as well as residents and businesses in the EU.
With this digital identity wallet, citizens can upload, store, and use their personal data, identity documents and other personal documents such as a driver’s license, a diploma, bank card, or medical prescription.
A European citizen located in another country will be able to open a bank account, rent an apartment and enrol in a university more easily in other EU countries.
This wallet has the potential to make checkouts faster at airports, reduce queuing at public and private retail spaces, and interestingly, it could enable citizens to take back control of part of their personal data.
In essence, the EU digital wallet will enable people to easily identify themselves and securely access public and private online services that require strong authentication.
Meanwhile to open a bank account in any local African bank will require you to own certain verified identification documents like a Proof of Address, Proof of identification, etc. So you can prove your real-world identity.
The world bank estimates that Africa accounts for half of the people in the world that have no means of identification. So you have a lot of people — 550 million Africans actually, who don’t own bank accounts because they cannot prove their identity, and who contribute significantly to the continent’s underbanked and unbanked population.
So they can barely access financial services, they cannot fully exercise their national public rights and they cannot easily travel across national borders.
Legal identification documents are important for social protection, financial inclusion and migration. Without an acceptable form of verifiable identity, you might be excluded from essential services. This is the plight about half a billion people face in Africa.
Birth certificates are the foundational form of identification documents (credentials) for most of the world. Yet only 30% of people born in Africa have registered birth certificates. A lot of people born in Africa have identification issues from birth because they have no access to birth certificates.
A lack of a foundational form of identity can cascade into more identification issues as you’ll find it harder to secure other forms of identification (ID) as you grow into adulthood.
We have a situation now where African countries are now embracing biometric & digital identities because they offer the power to help the most vulnerable people have access to identification, public and financial services.
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The Case for Digital Identities
As we spend more of our time online and as our digital personalities bleed into—or in some cases eclipse our offline identities. The value that digital identities possess is becoming more evident. They can be more trustworthy (tamper-proof), cheaper and instantaneous than Physical IDs.
The goal of digital identity is to verify the identities of individuals online in a secure way that safeguards privacy and personal information.
A digital identity is the online equivalent of physical ID documents, like your drivers’ license, passport and such.
Digital Identities can store multiple identification documents and credentials like KYC (Know-Your-customer) credentials, healthcare records, and academic transcripts. Allowing you to perform multiple verifications with different organizations.
They can help you access services digitally and remotely without needing to be present physically.
Biometrics & digital identity (BDI) are key to unlocking various developmental goals like universal health & education access, and financial inclusion. BDIs offer opportunities for enhancing the true aims of social services, and the efficiency of digital transactions amongst several other social and digital benefits.
Of course, there are concerns around digital identities. There are risks with centralizing & analyzing mass personal data. Like system bias & inefficiencies, unauthorized monitoring and surveillance, to say the least.
The collection of sensitive personal data and the decision to store it in centralized databases puts the data at high risk for attack by malicious actors and raises concerns around privacy, surveillance and an adverse effect on civil liberties.
So it’s important to adopt a multi-pronged approach and ensure strict safeguards for designing, financing, implementing and the implications of these Digital ID systems.
Global ID's processes are evolving rapidly with the growing penetration of mobile technology as well as countries trying to improve national identification systems. There's a growing agenda promoting the use of digital identities because of their relative ease, low cost and convenience compared to physical or analogue identities.
With over 1 billion people on the globe having no means of identification, some of the ways identity systems are being strengthened around the world are:
Initiatives promoting mass identity: like identification for development (ID4D) by the world bank with the aim of providing civilians around the world with the most fundamental form of identity; birth registrations certificates.
Self-enrollment identity systems: this involves people capturing their biometric data via an app or digital service (digital identity companies & startups).
A Shift from National identity systems to Mobile identity: A national or continental identity registry can enrol African citizens and provide them with an official and trusted mobile digital identity like the Digital wallet the EU commission has in the works.
Decentralized identity: a user-centric digital identity also referred to as “self-sovereign identity”. Users can easily authenticate themselves to online services and share information in a privacy-conscious manner. They can easily create store, validate, produce and safeguard their own identity information and associated data. They will have complete control over what they want to share, when, and with whom.
Africa’s Biometric Push
Biometrics (physical or biological characteristics that identify a specific human) offers a way of identifying individuals offline and online using fingerprints, face and voice recognition, and retina scans.
The use of biometric-based identification is spreading in Africa as more countries implement biometric systems.
Covid threw more light on Africa's existential identity crisis. A lot of Africans found it difficult to access healthcare services, government aid and even financial services during lockdowns.
It’s clear why African governments are attracted to biometric tech. Some positive reasons are that it can help in improving data security, reduce fraud in civil service (ghost workers), improve taxation and ensure every single person can be identified and reached, and that government interventions have their maximum impact and so on.
Then there's the deployment of AI in digital & Biometric identities (BDI) as part of the digital strategies to meet the UN 2030 Sustainable development goals (SDGs). This digital strategy is aiming to provide legal identity for all Africans including birth registrations by 2030.
Identification in Africa is a complex issue that any proposed biometric & digital ID system should have a clear and shared understanding of the process used in developing the system.
A lot of national digital ID programmes have been deployed across many countries in Africa, with the aim of providing more efficient governance, reducing corruption, improving welfare distribution & addressing national security concerns.
But it's difficult to ascertain if these ID programmes actually meet their objectives as most of these countries still possess weak civil registration and vital statistics (CRVS) systems and the largely undocumented populations in these countries.
A number of the continent's biometric registration laws are too complicated and not adapted to the modern world.
India's biometric identification system, Aadhaar, the world's largest biometric database, has saved more money from its social welfare program by reducing multiple identity fraud, than the cost of developing the ID system.
Yet Aadhaar for all its uniqueness was hastily implemented, is fairly centralized and highly state-managed. A system developed for welfare distribution now serves beyond its purpose as a legal identity.
It’s the same thing with digital ID and biometric systems in Africa, which tend to be quickly implemented without taking into account the deep structural issues that the populations they're creating for, face.
Issues like infrastructural deficits, the lack of foundational identity documents that spiral into more identification issues in the future, low literacy levels, incompetent accounting mechanisms and loosely drafted legislation that leaves room for executive government discretion.
For example, the Huduma Namba system implementation in Kenya was stalled by a court until there's an appropriate and comprehensive regulatory framework.
The deployment of national biometric and digital ID programmes across African countries is growing. Despite these programmes often lacking sufficient regulatory oversight, accountability and a clear governing framework.
Digital Identity Tech in Africa
The biometric and digital identity market in Africa is rife with international companies Gemalto, Zete's People ID Division, Idemia, Semlex, Biorugged, Veridos and IN Groupe, whose MO is to bid for government contracts around the African continent.
However, the market is now attracting local startups from the continent who tend to focus on two main categories; Identity verification (Authentication) & Digital KYC services.
Some of the interesting startups in Africa’s digital identity space are.
Building Africa’s Future Digital Identity infrastructure
Despite these terms being used interchangeably, it is important to be able to distinguish between identity, identification and ID. Identity is a relative social position, identification is a process and ID is a thing.
When you add the word “digital” to either Identity, identification and ID, the distinctions between the terms become important. Because, digitization complicates and expands almost every deliberation of these terms: identity, identification, or ID.
Identity is the relative social position that distinguishes one human from another. Identity is neither fixed nor absolute as people can always negotiate for different social positions and it can change depending on the person or the setting they find themselves in.
On the other hand, the process of proving your unique identity is what is called Identification. While ID is an acronym for identity and identity documents, a credential is used to authenticate your participation in a certain identification system.
The interplay between identity, identification, and ID is amplified in this digital era. That is, the lines between who we are, where we go, what we say, and what the state and corporations know about us have never been more blurred. That blurring demands more clarity for our sake.
Clarifying the use of identity, identification and ID helps us remain aware of the fact that the challenge of identity or identification doesn’t end once people have a legal/formal/official identity. It’s an ongoing process of negotiation and cultivation that requires maintenance.
The concern for clarity is that an unwitting or unreflective detachment or conflation of identity, identification, and ID can lead to the design of identification systems with sub-optimal outcomes.
If Africa is to enjoy massive gains in financial inclusion, improve digital literacy, enable better health care then it needs holistic identification systems and digital identities currently offer some of the best solutions.
A pressing issue of the digital economy is that of validating digital identities for on-boarding and authentication of users.
It is not very convenient to have to upload a picture of an ID every time you want to verify your identity with a new app. This process is repititive and has so much friction, and results in delays and large costs in customer identity verification and can lead to authentication-fatigue.
Many online and even offline services require the legitimate real-world identity of users to offer certain services. Banks for example spend a lot of money every year on customer KYC checks. And let’s not even go into the lengthy visa applications some of us face.
A digital identity Wallet can solve this identity verification issue by allowing users to seamlessly interact with various online providers with a completely frictionless experience.
Stored credentials in a digital identity wallet can be easily reproduced and be used to verify the identity of the user, automatically fill lengthy forms, thereby reducing customer onboarding time significantly and cutting customer acquisition costs.
Biometric identification is a layer of opportunity to ensure you are uniquely you, but it becomes error-prone if it relies on single forms of identification. Fingerprints can be copied, deep fakes can trick facial scans, and more. So using multiple sources helps to prevent fraud and build trust.
Linking your digital identity to a mobile device alongside the deployment of biometric factors can considerably enhance security and enable a frictionless digital authentication process. However, a decentralized identity might offer the highest level of security.
Decentralized identity is the future of Identity tech since it is not created or controlled by any online service or organization. Users create it, they own it and use it entirely of their own free will.
Digital identities are fundamental to the evolution of fintech, and therefore financial services, so Africa needs a digital identity infrastructure that supports our transition to the digital economy, not one that stutters along digitising the identification relics of the continent.
It’s important to note that no digital identity infrastructure should involve any sort of trade-off between privacy and security. The infrastructure should be perfectly capable of delivering both by designing an identity infrastructure that is founded on credentials rather than identity.
As many people continue to tout Africa as the next frontier market, coupled with the rise of web3, the metaverse and crypto, Africa's identity market will become more valuable.
Promoting digital identities interventions are critical for extracting more value from population explosion, the growth of mobile technology and trade agreements like AFCFTA.
Many African ID systems that are still at preliminary stages have to take into account the critical concerns around digital IDs and incorporate solutions that solve these critical concerns from the outset.
There's a large gap between those with access to verifiable identification and those without in Africa. In the coming years, we will see the role of digital identity in closing this identification gap.
The technologies (zero-knowledge proofs, verifiable credentials, strong authentication) that we need to build a digital identity infrastructure for Africa in the 21st century exists and now we need to put them to work.
Happy new month people! Till next time.