Europe’s digital ID could inspire Global South’s next generation of DPI: TECH5

Many countries have spent years building large-scale identity databases for issuing national documents, often based on biometric data. Governments are now trying to transform these identity registries into a “national asset” that could be put into the service of a country’s digitalization plans, as well as generate revenue, through digital public infrastructure (DPI).

This is particularly visible in countries of the Global South, where infrastructure, both physical and digital, has been lacking. Helping them achieve this goal are companies such as TECH5, a Switzerland-based biometric and digital ID developer, which has been working with governments in the Middle East, Africa and Latin America.

The traditional role of companies such as TECH5 has been to build those national assets of identity information. The company has been developing iris, fingerprint and face recognition algorithms and large-scale matching platforms that drive national ID identity document issuance.

Several years ago, the firm decided it was time to take the next step: using identity to unlock services offered by different industries.

“That became known as digital public infrastructure,” TECH5 CEO and Co-founder Machiel Van der Harst told Biometric Update in a recent interview.

The success of these systems relies on government trust anchorship – the credibility that national authorities provide when issuing verifiable credentials to citizens. This government backing ensures that digital credentials in mobile wallets are authentic, creating a foundation of trust that makes the entire system valuable, adds Mr. Van der Harst.

Those credentials can then be used for services such as opening a bank account, transactions, signing contracts, accessing government services and more.

Digital public infrastructure platforms are now being developed to support new services and business models. In essence, national digital identity credentials become a kickstarter for digital infrastructure, adds Ameya Bhagwat, Chief Revenue Officer at TECH5.

“Once you start building that ecosystem, the participating parties realize very quickly the enormous potential it has in terms of new services,” says Mr. Bhagwat. “You can develop new types of transactions, new business models that can exploit the infrastructure, all to the benefit of the citizen, the relying parties, and the government.”

One of the most talked-about services related to identity has been payments and other financial services. In Ethiopia, TECH5 has been working with payments giant Visa to provide technology for issuing bank credentials or a virtual card through a digital wallet that is co-developed with the NIDP called FaydaPass.

The digital public infrastructure (DPI) program is meant to solve digital Know Your Customer (KYC) verification needs and help more users access financial services in the vast East African country.

“From a government point of view, I think what they want is a way to generate revenue so that they do not have to rely on external funding sources and at the same time, build use cases that utilize the core ID of that nation as a trust anchor,” says Mr. Bhagwat.

Different use cases can be established in a very short period, helping the country to improve the overall GDP level, he adds.

Unlike India or Indonesia, which have implemented a centralized authentication system that leverages the biometric data in government databases, TECH5 has innovated and launched a decentralized identity, allowing the individual to manage their identity credentials without compromising security and privacy.

Similar to Ethiopia, the company has applied the same decentralized digital public infrastructure approach while providing technology for building a digital ID program in Honduras. Bhagwat believes the company can replicate its success in other countries.

TECH5 has chosen to build infrastructure that is fully compliant with European regulations and in line with the continent’s vision for digital identities, known as the EU Digital Identity (EUDI) Wallet. The reasoning behind this is the possibility of easily migrating experiences from the EU to the rest of the world.

Europe has been testing use cases for the EUDI Wallet through Large-Scale Pilots (LSPs) that involve large players from governments, airports, universities and the private sector.

“There’s a lot of work being done in large-scale pilots in Europe,” says van der Harst. “Europe is very, very active in defining services, standards, modalities and so forth.”

This includes gaining experience in building and maintaining infrastructure, engaging relying parties, developing business models and making them self-sustaining.

“This is not just a question of technology,” says Mr. van der Harst. “In order to make the system evolve, the actors within and the stakeholders within the system need to have a sustainable business model that will allow them to be involved today, but also involved tomorrow. The commercial entities need to be able to make some money at the end of the day. Otherwise, it doesn’t make sense.”

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Article Topics

biometrics  |  digital identity  |  digital public infrastructure  |  identity management  |  TECH5