Why digital identity is imperative for Kenya's digital transformation

Kenyans applying for kipande, May 1954. [File, Standard]

In my estimation, the current pace of technological advancement and the advent of the Fourth Industrial Revolution, now automating and digitalizing every conceivable service and process, will render analogue paper IDs obsolete by 2030. Apart from the natural attrition that the analogue ID faces in the new digital world order, the role of a national identification system has also changed significantly, almost beyond recognition. Countries are, accordingly preparing for the consequences of this rapidly approaching digital revolution.

Of course, the modern-day ID is totally different from the colonial ID and its immediate derivatives. Whereas the colonial ID contained basic foundational data to inform the colonial government of your exploitative utility value, a modern-day ID is a point of convergence between the citizen as a rights holder and the government as a duty bearer. It is also the citizen's source of authentication to various stakeholders in the world at large. It is what identifies, profiles and defines the citizen to the world.

Through its linkages, the ID provides data about the citizen's rights, entitlements, obligations and even creditworthiness. According to the World Bank, it is also a crucial tool for achieving sustainable development, including bankers' twin goals of ending extreme poverty and boosting shared prosperity. For this reason, ensuring that everyone has access to identification is the explicit objective of Sustainable Development Goal (SDGs) Target 16.9-to "provide legal identity for all, including birth registration" by 2030. It plays a central role in individual rights and access to basic services and entitlements in the physical and digital worlds.

The modern-day ID must be a functional official identification system provided by governments and recognized and trusted by all stakeholders with whom the citizen interacts. It is ideally going to be a platform that gives proof of identity and digital authentication services capable of meeting customer due diligence (CDD) requirements in new models where some government services are also outsourced to private sector entities.

With Kenya now digitalizing all Government services by mid-2023 and almost every financial service and business process being digitalized, you will require to be authenticated remotely for services virtually everywhere - in government and outside. Physical paper or plastic IDs are going to be increasingly irrelevant.

A modern-day ID will create a virtual digital persona. Whereas the citizen's foundational data remains the same, the functional aspects of the ID, which forms part of their digital persona, is not static. It recognizes their changing status, resulting from different stages of their life cycle. A modern ID will be the equivalent of a social curriculum vitae. It will be continuously updated to capture your changing progressive life events and statuses, like the acquisition of a driver's license, marriage, new qualifications, etc.

Kenyans will not need to carry around over 25 different ID documents to prove their identity in 2023. But it is not Kenyans alone. The Fourth Industrial Revolution (4IR) is a real global disrupter. The digital technology is reordering everything. We are entering the age of big data and connectivity, artificial intelligence, cryptography, blockchain technologies, biometrics, database technologies, cloud computing, analytics, human-machine interaction, and improvements in robotics. You only need to have a single digital ID that points to all this information, virtually and accessible by authorized persons even without your physical presence.

So how do we align our identification system to the new digital reality? The solution lies in collapsing all available authenticated foundational ID data about the individual into a single digital ID that provides biometric authentication. In our context, a digital ID is the body of verified information about an individual as defined in the Kenya Registration of Persons Act (foundational ID data) often arising from the Integrated Population Registry Service (IPRS), National Integrated Identity Management System (NIIMS) and the National Registration Bureau (NRB) and digitally linked to aggregated data from various official and trusted sources (functional ID data) such as the National Hospital Insurance Fund (NHIF), National Social Security Fund (NSSF) and the National Education Management Information System (NEMIS) among other trusted sources of information.

It will also be linked to the birth-to-death UPI, enabling a cradle-to-grave overview of the citizen. Equally,it will contain the individual's embedded biometric data that is used to associate them with the data for the purposes of authentication. This would be duplicated, cleaned up and integrated into a single digital source of truth. All government-held data about Kenyans will be linked to the digital identity, and all public services will be available through digital channels from one single source of truth.

What would all this mean? It means that all your authenticated foundational ID data is stored in a single, secure location digitally. Instead of you producing a physical ID, it is the service provider, or other interested party, who checks your data online (or in cases offline) upon your authorization and upon authentication, provides requisite services. Your authorization entails providing your biometric data (fingerprint, iris, voice etc.) to be compared with that stored and embedded in your online ID data from the single source of truth.

Uncollected ID cards at the registry in Kisumu. [Collins Oduor, Standard]

A biometric match between your physical and stored biometrics authenticates you in a foolproof manner, based on the principle that your biometrics are unique to you and cannot be misrepresented, or impersonated. This foundational data is then linked to functional ID data e.g., NHIF, NSSF, NEMIS, KRA, NTSA, KNQA, CRB and the CRS (the Civil Registration Services) and is continually updated. The effect is that when you want to open a bank account, the bank will not necessarily require you to produce a physical ID. They will authenticate you via your biometrics and get all the pertinent information from a single source of truth and proceed to serve you, including when you apply for a loan, or wish to withdraw funds, thereby avoiding the risk of a fraudulent impersonator presenting a fake or photo-altered ID. This automated process will also be used to authenticate you to medical service providers and link you to your medical records seamlessly, without the need for a medical card or a hospital card with your medical history. The digital ID will also be key in authenticating citizens to access the over 5,000 Government services, currently being digitalized. The various Government agencies will be able to efficiently provide services to the correct persons without imposters, or fraudsters, coming in between as those requesting services will be authenticated online via their biometrics which are largely foolproof.

This aggregated data pooled together in one location will also provide useful and organized information to help the nation in development planning. Data stored digitally, in the correct format and in one location can provide useful insights if applied to various statistical analysis tools to inform development needs segmentation and profiling. It also promotes inclusivity. When well-designed, digital ID not only enables civic and social empowerment, but also makes possible real and inclusive economic gains.

Research by the McKinsey Global Institute (MGI) indicates that digital ID can create economic value for countries, primarily by enabling greater formalization of economic flows, promoting higher inclusion of individuals in a range of services, and allowing incremental digitization of sensitive interactions that require high levels of trust. An MGI analysis of Brazil, China, Ethiopia, India, Nigeria, the United Kingdom, and the United States indicates that individual countries could unlock economic value equivalent to between 3 and 13 per cent of GDP by 2030 from the implementation of digital ID programs.

The four largest contributors to direct economic value for individuals globally are increased use of financial services, improved access to employment, increased agricultural productivity, and time savings. The five largest sources of value for institutions in both government and the private sector as a benefit of operationalizing the digital ID are cost savings, reduced fraud, increased sales of goods and services, improved labour productivity, and higher tax revenue. Civil and population registers are a critical administrative source of demographics and vital statistics, which in turn provide essential evidence to support the ability of governments and the private sector to engage in long-term planning and policy-making in areas such as public health and infrastructure. For example, civil registration with inputs from the health sector enables policymakers to monitor cause of death and maternal and infant mortality rates and to rapidly respond to epidemics e.g., the Corona Virus, HIV/AIDS and non-communicable diseases. It is also envisaged that a digital ID system would enhance good governance by reducing incidences of ghost workers and enhancing public savings.

The digital ID is also significant in creating the ability to confirm and authenticate citizenship and its derived rights and entitlements by ensuring a biometric linkage between parents and their offspring at birth, as is the practice in countries that have adopted digital IDs like Pakistan, where the National Database & Registration Authority (NADRA) uses relational databases that allows all data points to be tied to each other in pre-defined relationships. This means that illegal immigrants would find it difficult to just gain fraudulent citizenship without having being tied to a citizen at birth. Linkages can also be created in relationships through marriage, by relating spouses' biometrics. Illegal immigration is a great security risk to any country, and also a strain to limited resources.

The digital ID will also be a great enabler of e-Commerce. It will help create digital trust by facilitating the authentication of an actor's identity in e-commerce, through a connection between the identity attributes in the digital world and the real-world legal identity. E-commerce activities depend on digital trust to process transactions. Lack of a verifiable digital identity will preclude participation in these systems. The pre-requisite for e-Commerce transactions is the establishment of a digital trust relationship between a vendor and a buyer, so that both parties know who they are transacting with. The private sector - including e-commerce platforms, digital banking, payment processing, and logistics - provides key services that enable e-commerce and enhance digital trust. The success of e-commerce depends on digital trust, built through verification and authentication processes, especially during merchant and customer registrations and payments, as well as through rating systems. Strong digital trust generates a sense of security in a transaction-key to any e-commerce activity.

Given the fundamental need for secure and accurate online identification and authentication, digital ID and other trust services, such as e-signatures form part of the core foundation, or a "stack" needed for successful digital economies. When enabled by digital infrastructure that brings people and organizations online, digital ID and trust services can be leveraged by government and commercial platforms to facilitate a variety of digital transactions, including digital payments. Together, digital ID and payment platforms provide the means to move towards a cashless society, creating productivity gains, reducing corruption and fraud, and further improving user convenience.

The transition from the analogue to the digital ID is key in Kenya's digital transformation agenda because it carries our citizens along with us in this journey whose time has come. Digitalization of our systems, processes, services and re-engineering of how we do business will be incomplete unless the citizens can participate digitally. As indicated above, the benefits are manifold. It is estimated that this transformation has the potential to unlock economic value equivalent to between 3 and 13 per cent of GDP by 2030 from the implementation of digital ID programs.

Digital ID can promote increased and more inclusive access to education, healthcare, and labour markets. It can aid safe migration and also contribute to greater levels of civic participation. For example, in Estonia, over 30 per cent of individuals vote online, of whom 20 per cent say they would not vote at a physical polling place. The envisaged benefits are immense. Digital ID is indeed paramount to increasing the adoption of formal financial services and identifying specific policy interventions. Implementation and usage of digital ID is therefore critical as an enabler for financial inclusion.

Finally, the concept of a digital ID is different from Kenya's previously proposed Huduma Number that issued a physical ID card. There is no physical ID card associated with the digital ID. It will, instead, be an instrument for enabling citizens to be part of the new digital transformation in the world. The Digital ID unlike the Huduma Number is a dynamic social vitae, and tool for realizing citizens' rights, enabling social and financial inclusion and carrying our citizenry along with us, on the journey of Kenya's digital transformation. The digital ID will be very instrumental in helping us to remain socially, economically and technologically relevant in the new world order. It has been utilized effectively in India, Pakistan, Estonia, Belgium and many other parts of the world. Kenya as a country cannot be left behind in the new world order.
This is my take.

-The Writer is the Cabinet Secretary for Information, Communications and the Digital Economy