Digital identity can be defined as a soft copy equivalent of real identity of a person or entity (like a business or agency), that can be used for identification in connections or transactions from PCs, cell phones or other devices. Trusting a link between real identity and digital identity requires validation by some governing authorities to prove that the real identity and digital identity belong to the same person.

Once the digital identity is established, using it would need verification or authentication to prove that it is really you using the digital connections like internet. The more the value of digital identity, the more validation needed to establish secure authentication, this is important to provide safety. For example: If a webmail is set up with just an email and no other validation, email address and a password to authenticate the use of it. Later if this webmail is used for cell phone service, the service provider will not know who you are or where to send bills.


Stronger security is provided for high value services or information using two-factor authentication which requires personal security device during the login and ID validation process. For internet based transactions, business to business authentication tends towards higher security while consumer access to web-based services tends towards less secure username and password authentication.

Like a human identity, digital identity compromises of following characteristics or data attributes:

  • Username and password
  • Online search activities, like electronic transactions
  • Date of birth
  • Social security number
  • Medical history
  • Past purchases

A digital identity can be linked to one or more digital identifiers like email address bank accounts etc. Digital identity authentication validation measures are critical as identity theft is rampant on web and it becomes difficult to recognize persons and their true identity by different authorities.

Digital identity is a critical enabler of an economy that could unlock large productivity gains as it allows quick confirmation of personal details, entitlements, and authorization online or in person via phone. This technology if implemented correctly would increase personal privacy, reduce fraud and allow quick interaction with companies. So it is important to get digital identity right and fix serious problems with current approach. The ASPI’s international Cyber policy centre in a report suggested few challenges regarding digital identity that need to be addressed immediately are

Overhauling of present digitization schemes:Present schemes gradually are disempowering citizens and their rights are being eroded, thus forcing citizens to loose trust on government. A total new approach is needed that puts citizens at centre and helps citizens in restoring their trust over governments.

Oversight: The existing laws apply in protecting safety but are ineffective to manage a system with digital identity’s applications. If companies are able to exchange attributes of people in a correct way would be very handy but if done badly could harness digital identity and could create a mess like China’s social credit scheme. Digital identity enables expanded range of activities to be linked to verified identities and so expand the scope of profile building and ranking if left unchecked.

Tighter control:  A tight control need to be imposed on bio-metric exchanges as the system has serious flaws, including provisions that allow any state to use it to police any offence regardless of the gravity of act.


The few sectors where a digital identity has a significant impact are

  • Humanitarian sector: This is one of the sectors that need to concentrate as it needs to create identity for more than 65 million people who are displaced and are staying as refuges in other countries. Because of their displacement their identity and right of services cannot be ascertained. There is an urgent need to establish digital identity of these affected populations as United Nation has set a goal to create identity for all people on earth by 2030.
  • Financial services: As both private and public sector organizations are opting for digital world, digital identity becomes a must for them to enjoy the benefits provided by organizations. Financial services offer these digital identities to citizens for identity mechanisms that could help citizens claim their assets and work on legal entities that can be linked to private and public centers.
  • Sustainable supply chain: Digitized identities of users, assets, devices and goods are essential for economic development and improve sustainability that requires traceability and transparency. Traceability is necessary to track hazardous products and materials, assign and allocate responsibilities and monitor compliances with environment and sustainable protocols. While transparency is essential for achieving credibility, legitimacy, accurate risks management and fairness.

The proper use of digital identity has many advantages, but they need to be put to proper use with various safety measures to gain citizen’s trust. There are few obstacles that governments need to overcome to make their life easier and safe.