The Transformational Impact of Digital Identity Technologies
Proving who we are goes far beyond data and digital systems—it’s a deeply human act that defines our identity and shapes our society.
As we move toward a future powered by digital ID, the real challenge is ensuring that trust, social cohesion, and the essence of our communities are not sacrificed in the pursuit of efficiency and growth.
This blog delves into the growing influence of digital identities, the barriers to broader adoption, how regulations are evolving, and their critical role in shaping the future digital economy.
The transformational impact of digital identity
Digital identity technologies offer convenience. They improve efficiency across public and private sectors.
In healthcare, digital IDs help deliver secure and authenticated interactions between patients and providers, ensuring patient data is shared securely across organisations, especially when patients are supported by another person.
The financial services industry also benefits from digital IDs, with faster onboarding processes and fraud prevention mechanisms.
The Careful Industries' 2024 study outlines that technologies have the potential to impact everything from day-to-day activities like accessing public services or conducting private transactions, to significant life events such as starting a new job or buying a home.
For areas like policing, digital IDs play a crucial role in reducing crime and fraud, although public opinion shows that broader adoption faces challenges, particularly around trust, fairness, and exclusion. (57% of people think there should be a single form of ID in the UK)
However, the benefits extend far beyond efficiency. By fostering trust and reducing friction in transactions, digital IDs enhance economic growth. As digital economies expand, secure identity systems will facilitate seamless interactions across borders and platforms. McKinsey estimates that by 2030, digital IDs could contribute between 0.5% and 3% of global GDP.
Barriers to broader adoption
Despite the potential benefits, public awareness and trust remain low. A significant portion of the UK population lacks knowledge about digital ID services, with 57% reporting no awareness of such systems. Demographic differences further complicate adoption. Older generations are more likely to have more forms of ID, while younger people are concerned by issues around fairness and discrimination. This can be seen in the UK Voter ID list where an Oyster 60+ card is acceptable form of ID, whereas the Oyster 18+ card is not.
Concerns surrounding data privacy, the risk of exclusion, and the power dynamics between citizens and big tech continue to create resistance. Particularly for communities of colour, the fear of surveillance and misuse of biometric data is prevalent.
Regulation in the UK and beyond
Regulation of digital identity systems is progressing, albeit slowly. The UK government is focusing on digital identity solutions such as GOV.UK One Login for public services, Digital Verification Services for the private sector, with government expenditure estimated at £700 million. However, there is still a lack of transparency in how these systems will interact and the potential risks they pose, including misuse and security breaches.
The UK's digital ID landscape is shaped by the need to balance efficiency with public trust. Calls for a Cross-Department Digital ID Strategy, increased transparency, and the appointment of a Digital ID Minister reflect the growing demand for stronger oversight. Internationally, other regions, including the EU and parts of Asia, are also advancing digital identity regulations to ensure security, privacy, and inclusivity.
The future of digital identity and the digital economy
Digital identity technologies will play a crucial role in shaping the future digital economy. For widespread adoption, governments must focus on building trust, engaging with diverse communities, and ensuring that digital IDs do not exacerbate existing inequalities. As the report highlights, creating a voluntary, government-backed digital ID system that balances convenience with protections against exclusion and discrimination is crucial.
The future of digital identity lies in creating systems that are not only secure but also inclusive and user-friendly. Governments and tech companies must collaborate to ensure that digital IDs serve as tools for empowerment rather than control. When properly implemented, digital identity can unlock new opportunities across sectors, streamline processes, and foster a more integrated global digital economy.
Conclusion
Digital identity technologies have the potential to transform key sectors of the economy, making interactions more efficient and secure. However, realising this potential requires overcoming significant barriers, particularly around trust, inclusion, and regulation. As digital identities become more embedded in our daily lives, they will be essential in shaping the future of the global digital economy. Regulatory frameworks in the UK and beyond must evolve to support a fair and inclusive digital identity landscape that benefits all citizens.
Start bringing together your customers and your data and executing digital identities the right way.
Welcome to techUK’s 2024 Digital ID Campaign Week! On the 14-18th Oct, we are excited to explore how our members are increasing efficiency for both businesses and users, combatting fraud, as well as what creative and innovative ways our members are expanding our understanding of Digital Identities.
Whether it’s how we’re communicating, shopping, managing our finances, dating, accessing healthcare or public services, the ability to verify identity has quickly become a critical vanguard to the Digital Economy.
Follow us on LinkedIn and use the hashtag #UnlockingDigitalID to be part of the conversation!
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Contact the team
Elis Thomas
Elis Thomas
Elis joined techUK in December 2023 as a Programme Manager for Tech and Innovation, focusing on AI, Semiconductors and Digital ID.
He previously worked at an advocacy group for tech startups, with a regional focus on Wales. This involved policy research on innovation, skills and access to finance.
Elis has a Degree in History, and a Masters in Politics and International Relations from the University of Winchester, with a focus on the digitalisation and gamification of armed conflicts.
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Authors
Kam Bhatoa
Bringing diversity, energy, and a strong motivation, Kam has over 25 years’ experience delivering inclusive technology in the Public Sector. Kam strives to develop open, forward-thinking, and collaborative environments to solve citizens' problems while working with government departments to deliver the best outcomes for taxpayers.