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Digital Identity

About digital ID

The ability to prove one’s identity is a crucial means of access to social, economic and political services in any given society. With the advent of data technologies, digital forms of identity have begun to address problems and inefficiencies with paper-based systems and expand inclusion efforts. For example, by offering alternatives to proving your identity in person or waiting for something to arrive in the post. The term digital identity signifies a number of concepts, but most importantly it covers the digital version of:

  • Foundational identity: this is issued by governments and carries legal status. Examples are usually general-purpose and include birth certificates, passports and national ID cards.
  • Functional identity: this can be issued by government and non-government actors, including NGOs and the private sector. Functional ID normally evolves from a single use case, e.g. banks cards, mobile identity or health records and has the potential for use across the other sectors.

Both types are important in the ecosystem of trust and recognition. While foundational identity is often a requirement for accessing functional identity, in developing countries there are inclusion gaps. Functional identities enable everyday societal inclusion and efforts are beginning to address this by extending access to both types.

Best practice principles for digital identity

Relevance of digital identity for development cooperation

The relevance of digital identity is especially visible in the following areas:

  • Health
    94 percent of maternal deaths occur in developing countries. The World Health Organization (WHO) recommends at least eight preventive examinations before birth. However, about 60 percent of all mothers do not receive these services due to insufficient proof of identity. eID can ensure that every mother and child has access to medical care. Digital identity solutions can also improve the traceability of vaccinations in the population.
  • Access to financial services
    Digital access to finance has advanced in almost all developing countries. But around 1.7 billion adults still do not have a bank account. Digital identities can give more people access to a bank account and reduce the potential for fraud in money transfer programs to less than one percent.
  • Participation
    In order to participate in elections and participation processes, it must be demonstrated that citizens are entitled to vote and vote only once. Digital identity solutions are increasingly being used here as well.

Key challenges and risks

This new development also faces a number of challenges:

Existing standards for digital identity

Different models apply different approaches to governance, norms and standards. For example, centralised systems show that identities can be triggered and controlled by the state and implemented by one or more private partners. By contrast, federated systems allow for shared ownership arrangements whereby costs and the potential for abuse is distributed — i.e. while the state sets the rules and standards, federated companies can form a system and identify, authenticate and authorise the person through various channels.


These examples show the different approaches to cope with the challenges and risks of digital identities all over the globe.