The U.S. pandemic recovery is a chance to improve digital ID

As we breathe a collective sigh of relief thanks to declining coronavirus case counts and burgeoning vaccine supply in the U.S., we must also acknowledge that COVID-19 will not be the last global pandemic, and we’ll certainly be posed with the same problems once more — from the appearance of opportunistic financial fraud to the complexities of vaccine distribution.

So when it comes to improving our preparedness for public health emergencies and disaster relief, and in thinking through the questions of what could have been done better or avoided, we believe implementing a digital ID system should be at the top of the list.

A digital ID uses electronic means to assert or verify a person’s official identity, either online or in person. All over the world, people are using digital IDs to access services like banking, government benefits, education, and more. While adoption varies from country to country, a number of emerging markets with less robust civil registration systems are leapfrogging traditional identification methods in favor of digital ID.

For example, 99% of the adult population in India is enrolled in its Aadhaar program, which is the world’s largest biometric ID system. In Morocco, Identification for Development (ID4D) is working with the World Bank to design and implement a new digital ID and National Population Registry, which aims to reform the country’s social safety net system as well as support paperless and cashless transactions.

During COVID-19, many of the essential interactions, activities, and transactions people were accustomed to performing in-person shifted online, illustrating the value of digital ID. In fact, countries where digital IDs were already in use leveraged them to respond to the pandemic, such as in Chile, where a digital ID system was used to pre-enroll millions of new beneficiaries in social programs. Digital IDs also enabled people to check and, if necessary, appeal their support status online. Thailand and India also used digital IDs to provide much-needed aid to vulnerable populations. In a recent survey of the global compliance industry co-conducted by ACAMS and RUSI, more than half of the respondents indicated that the pandemic has made them more accepting of digital IDs in general.

In the U.S., there are many reasons to believe that a digital ID system could have alleviated issues related to the organization and distribution of COVID-19 relief.

One of these issues is the proliferation of financial fraud that sprung up around relief payments. In March of 2021, the Justice Department officially began to take action again fraud related to COVID-19, with the Labor Department inspector general estimating that up to $100 billion of relief payout could have been misspent.

A second issue is speed. When the U.S. government distributed stimulus checks, many Americans’ access to funds was delayed. Forty-four percent of households surveyed by Brookings were still waiting to receive their first-round stimulus payments in late April through mid-May of 2020. In many cases, delays were caused by the IRS mistakenly delivering funds to intermediary bank accounts used by tax preparation providers rather than directly to individuals, or by physical checks taking longer to arrive than funds delivered via direct deposit.

Digital IDs could also have supported our current recovery. For example, a digital ID system could standardize and simplify the process of scheduling a vaccination appointment, which currently varies according to state and provider. In addition, digital ID could streamline and secure individual COVID-19 vaccination records for easy verification, as well as provide backup records in the event of loss or destruction of the physical cards being issued by the CDC. Finally, "vaccine passports" or some version thereof could be achieved through the use of digital ID, at the same time ensuring the accuracy and centralization of records and preventing easily falsified physical ones.

Data backs it up. According to the aforementioned ACAMS/RUSI survey, 86% of the compliance industry respondents view digital ID as a positive innovation, and 87% said that they would in particular trust digital IDs issued by the government. Furthermore, respondents felt that digital IDs could solve many common problems in identification, such as labor intensive identity authentication, the use of forged or fraudulent documentation, the lack of proper documentation and the inability to conduct processes in person — all while streamlining onboarding processes and lowering costs.

The experience of COVID-19 is a case study in the potential of digital ID as an innovative way to cut down on financial crime and identify theft, and certainly to streamline administrative processes. While issues of privacy and proper use should certainly be debated and respected, the promise of digital ID in providing more efficiency and security makes it well worth the exploration. The sooner the U.S. embraces digital IDs, the better prepared we will be to weather the next national crisis — whatever it is and whenever it strikes.