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The future of IDs will become more and more virtual, from Phygital to Virtual IDs

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Berlin, 18 May 2022 – The future of sovereign documents (IDs) such as identity cards, passports and driver’s licenses is virtual. However, there are still some key challenges to overcome to get there, with IDs remaining "phygital" for the time being, explains Veridos.

ID cards, passports and driver’s licenses are increasingly "phygital" across much of the world. This sees physical and digital components combined with documents containing electronic chips that store data identifying their holders. Unlike purely physical ones, phygital IDs have one key advantage: data that establishes a citizen's identity can be transferred to digital platforms without friction. Thus, they are indispensable for efficient eGovernment processes.

To advance these processes, the next logical step is to further digitize IDs – that means their virtualization for mobile devices such as smartphones and tablets. However, to get to that point, states, international organizations, and system providers have to overcome a range of challenges. Veridos explains the most important ones:

1. Develop new security solutions. Phygital IDs contain numerous physical security elements such as a surface that can be felt in relief, holographic portraits or watermarks. With virtual documents, these features are omitted, creating a gap that must be closed by new security solutions.

2. Build state-wide infrastructures. In order to use virtualized documents effectively, states need complete IT infrastructures throughout the country. This includes systems for the high-performance processing of large amounts of data. These are necessary, for example, for cross-border authentication of virtual identities, i.e. when a citizen travels internationally; or mobile solutions that enable citizens to use their virtual IDs for digital services in a legally secure manner.

3. Define international standards. International standards are needed for the smooth cross-border use of virtual IDs. Organizations such as the ICAO, a specialized agency of the United Nations, are already working on specifications for the harmonization and standardization of such IDs.

4. Design concepts for citizens' data sovereignty. A key factor in the acceptance of virtual IDs by citizens will be the handling of their data. National authorities should design solutions that give citizens sovereignty over their data – for example, by allowing them to decide on a case-by-case basis what information they want to release. Such concepts can be realized by the decentralization of IDs.

5. Design user-friendly systems. In addition to the documents themselves, the goal is also to digitize the associated processes around application and issuance as consistently as possible. Since citizens usually only need new IDs at intervals of several years, they often do not become familiar with the digital systems. These systems must therefore be as intuitive to use as possible.

"The future of IDs will become more and more virtual, there is no doubt about that," explains Marc-Julian Siewert, CEO at Veridos. "There will even be some outliers, especially countries that do not yet have phygital IDs, will simply skip this step. But the majority of the world will still have phygital IDs for the next ten years. Countries need a lot of patience to take the next step towards completely digitized documents, but it will be worth it. After all, they can take state-citizen communication and, consequently, the efficiency of public administration to a whole new level."