apidays LIVE JAKARTA - Connecting the Digital Stack How National ID accelerates the digital economy Rahul Parthe, CTO of International Biometrics Indonesia

1. How National ID
Accelerates
Digital Economy
By: Rahul Parthe
www.interbio.id | www.tech5.ai

2. How National ID Accelerates Digital Economy by Rahul Parthe
Trust is the keystone of commerce/trade and
trusted identities establish that trust.

3. How National ID Accelerates Digital Economy by Rahul Parthe
About Rahul Parthe
Key Roles:
• Architect BSP India Aadhaar (1.3B+
people enrolled with tri-modal
biometrics)
• Architect Indonesia National ID
(196M+ people enrolled with tri-
modal biometrics)
• Architect BSP Turkey National ID
(Target 70M, 35M+ enrolled with 2
modalities)
Current Positions:
• CTO, International
Biometrics.
• Co-Founder, Tech5
SA.
Past: Identix, L1 Identity
Solutions,
Morpho(Idemia)

4. How National ID Accelerates Digital Economy by Rahul Parthe
What is identity?
• Identity is the fact of being who or what a person
is.
• Identity describes a set of unique characteristics or
attributes that distinguish one individual from
another. Typically those attributes are derived from
name, date of birth, physical traits (biometrics) and
a variety of social factors including home address,
occupation and so on.
• In many countries, citizens are issued the identity
numbers/document when they are born which
continue to be used throughout their lives.

5. How National ID Accelerates Digital Economy by Rahul Parthe
Why is Identity Important?
• Identification plays an important role in facilitating
the interactions of individuals with other individuals,
their government and private institutions to operate
in a structured society.
• Without a robust means of proving one’s identity,
exercising one’s basic rights, claiming entitlements,
accessing a range of government services,
conducting many daily activities and participating in
growth could be hampered.

6. How National ID Accelerates Digital Economy by Rahul Parthe
Categories
Identity Systems or Identities can be broadly categorized as follows:
• A foundational identity is usually created as part of a national identity
or similar scheme, which is based on the formal establishment of
identity through the examination of qualifying (‘breeder’) documents
such as birth records, marriage certificates, and social security
documents .
• A functional identity is created to address the specific needs of an
individual sector (for instance, the healthcare or transportation sectors).
• A transactional identity is intended to ease the conduct of financial or
other transactions (either face to face or across the Internet) across
multiple sectors.

7. How National ID Accelerates Digital Economy by Rahul Parthe
National ID
• National ID is a foundational ID as it is generally
issued to all the citizens of a country and sometimes
even includes permanent and temporary residents.
It becomes the basis for other functional ID
systems.
• Many countries have some form of national ID and
they are increasingly becoming electronic (e-NID) or
digital ID. In this age of digital transformation, a
National ID is most effective in the Digital/Electronic
form.

8. How National ID Accelerates Digital Economy by Rahul Parthe
Guiding principles of National
ID
Vision and Mission: Institutions implementing, should
define a clear vision setting out the goals it aims to
pursue, and a mission detailing on how to reach those
goals.
Social Inclusiveness: Should be inclusive so that its
services can be provided to or accessed by the entire
community.
Trust, privacy and Security: Ensure adequate
safeguards for the privacy of users and guarantee an
appropriate level of information security in order to gain
a high level of trust among users and stakeholders.
Uniqueness of IDs: Ensure that people can only get one
digital identity.

9. How National ID Accelerates Digital Economy by Rahul Parthe
Guiding principles of National
ID
Sustainability and cost optimization: It should be
developed keeping into consideration the need for
economic sustainability of the system.
Interoperability: Should consider the requirement of
interoperability to ensure the ability of different systems to
exchange information and queries.
Economic and Social Prosperity: Should foster economic
and social prosperity and maximize the contribution of the
digital environment to sustainable development and
social inclusiveness.
Identity as a platform: Should foster the development of digital ID as a platform, so
that users can plug it into any domain and use it.
Maximize Adoption and Reach: Creating ecosystem to encourage citizens to
participate by maximizing reach, trust, services and convenience

10. How National ID Accelerates Digital Economy by Rahul Parthe
Establishing Uniqueness
• Registration/Onboarding/Deduplication:
• Biometrics have become the popular way of ensuring uniqueness in a
national ID system.
• Multi-modal biometrics ensure inclusion, as a single modality may not cover
the entire population.
• Face, fingerprint and iris are the most used biometrics to perform
deduplication.
• Verification
• Face offers the most convenient / cost effective way of verification but has
privacy concerns.
• Fingerprint technology is gaining traction due to the advances in touchless
capture approach using mobile phones. Privacy is still a concern.
• Iris is the most private and accurate modality, but its coverage is limited in
authentication due to the requirement of a specialized scanner.

11. How National ID Accelerates Digital Economy by Rahul Parthe
Digital Identity
• Gov and commercial organizations value trusted digital ID
because without them the digital economy cannot function
effectively.
• The most effective Digital ID are derived from National ID (e-
NID) with combination of some other functional
identities/attributes.
• With e-NID in place governments can take the lead in
promoting high value, trust-based, digital economic and social
interactions.
• e-NID also helps the public and private sector in extending
eCommerce and creation of an entirely new peer-to-peer
interaction and economy with appropriate regulations in place.
The value of the B2C sector of the online economy worth is in excess of $1 trillion, most
transactions are now carried out between parties where neither is physically present
Digital Identities can be verified digitally anywhere anytime.

12. How National ID Accelerates Digital Economy by Rahul Parthe
e-NID Benefits for the users
• Improving convenience and user experience by
effectively removing some of the barriers that
make public services complex and hard to access
for users.
• Reducing cost of access to services by offering
convenience and flexibility. Users can cut the
indirect costs of accessing services. Reduces the
amount of paper documentation required.
• Improving citizen inclusion by enabling people
who might not be able to obtain identity
documents to participate fully in their
communities.

13. How National ID Accelerates Digital Economy by Rahul Parthe
e-NID Benefits for the public
sector
• Improving service delivery by enabling governments to
deliver services to their citizens more efficiently, helping
institutions target the population with welfare and social
programs, and giving governments the necessary tools to
reach the least accessible and most remote areas.
• Reducing the cost of service delivery by allowing the public
sector to cut the cost of providing services to citizens.
• Reducing leakages and losses by implementing a direct
channel to the final beneficiaries, removing the middle
layer and eradicating ghost identities.
• Improving security by serving as a powerful tool for policing and crime prosecution
and can greatly increase the effectiveness of combating certain crimes (such as
identity fraud, tax fraud, etc).

14. How National ID Accelerates Digital Economy by Rahul Parthe
e-NID Benefits for the private
sector
• New revenue opportunities can be created for
both public and private sectors, kick-starting a
virtuous cycle that helps the whole economy
thrive and grow.
• Reducing the cost of service delivery by reducing
personnel, physical delivery points, paperwork
and the time needed to complete transactions.
• Increasing customer base by offering convenient
and fast onboarding process for new users and
expanding the geographical reach.

15. How National ID Accelerates Digital Economy by Rahul Parthe
Key role of ID Verification
To establish trust for transacting, the ID framework should
offer means of conveniently and securely verifying identities
of the parties involved. Common options are:
• Free or paid APIs for identity verification services by a
central authority. Paid or for-profit approach allows the
institution to sustain and offer better Quality of Service.
• For countries with weak infrastructure, technologies that
offer fully offline verification are a must. Does not have
to be smart card based.
• Identity Exchanges vs single source are gaining more
traction as IDs derived from multiple sources have
proven to be more useful.

16. How National ID Accelerates Digital Economy by Rahul Parthe
Mobile ID + Physical Form
• With a mix of online services/API plus mobile ID
population reach can be maximized.
• National ID in a Mobile ID form can blur the lines
between a digital and physical credential driving the
effective use of the Identity framework.
• Technologies that allow presenting Digital ID with or
without the need of a mobile device (optically readable)
are the most effective in increasing the reach solving the
last mile problem.
Due to high global penetration rate, at-least one of the parties
transacting has a mobile phone.

17. How National ID Accelerates Digital Economy by Rahul Parthe
Direct impact on digital
economy growth
• e-NID plays a key due the fact that it provides the framework for
ensuring trust by enforcing security and privacy while reducing
friction and maximizes reach and coverage at the same time.
• Reports say, extending coverage of e-NID could unlock
economic value equivalent to 3% to 13% of GDP of developing
countries.
• e-NID frameworks that reduce dependency on the infrastructure
status of the country further accelerates the growth.
• e-NID encourage digital business models and thus enable
leveraging the economies of scale.
• Most important, in the current COVID-19 and post pandemic
scenario it is also helps people to transact safely which is
helping economies survive.

18. How National ID Accelerates Digital Economy by Rahul Parthe
Steps taken to accelerate
adoption
• Investment in the prerequisites for developing digital
economy, such as mobile broadband infrastructure, efficient
payment systems, fintech friendly ecosystems and
electronic signature infrastructure.
• Promoting digital verification, including biometric systems.
• Expansion of open API—publicly available means for
developers to access identity services so that new
applications can communicate and interact with one
another.
• Adapting Legal and regulatory frameworks to make the ecosystem conducive
and ensure a competitiveness.
• Incentivizing usage of digital Identities based services by subsidizing
transaction cost and providing tax breaks.

19. How National ID Accelerates Digital Economy by Rahul Parthe
Digital ID Accelerates Digital
Economy
reducing risk of fraud
ease of compliance
faster growth(ease of
on-boarding)
reduce operational
cost
cashless
By offering following benefits to any institution using
Fintech
increase revenue
competitiveness
fine tuned offerings
cross border
transactions
audit trace, analytics
speed of transactions
security
better customer
experience
sustainability
safety and
transparency.

20. How National ID Accelerates Digital Economy by Rahul Parthe
Digital ID Accelerating
Digital Economy
Making digital financial
services easy for population
that do not have the
privileges to access
traditional options such as :
• transaction accounts
• credit
• savings products and
insurance
• micro banking
Larger coverage
• over geographies
• income/education levels in
society
• users
• services

21. How National ID Accelerates Digital Economy by Rahul Parthe
Key take away points
An effectively implemented
National ID program
becomes the basis for a
good Digital/Mobile ID.
The benefits offered by
digital and mobile ID not
only promote inclusive
growth but also increase
convenience allowing a
larger percentage of the
population to transact.
Beyond coverage it further
enhances the framework
to offer a larger variety of
products and service to the
existing population base
leveraging the economics
of scale.
All this results in
accelerating the digital
economy and sustain
growth.

22. How National ID Accelerates Digital Economy by Rahul Parthe
References
• https://www.itu.int/dms_pub/itu-d/opb/str/D-STR-DIGITAL.01-2018-PDF-E.pdf
• https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-
identification-a-key-to-inclusive-growth
• https://blogs.worldbank.org/psd/how-can-digital-financial-services-help-world-coping-covid-19
• https://www.gsma.com/identity/wp-content/uploads/2014/10/GSMA-SIA-paper_FINALNov-
2014.pdf
• https://www.usaid.gov/sites/default/files/documents/15396/IDENTITY_IN_A_DIGITAL_AGE.pdf
• Digital Identity Toolkit, A Guide For Stakeholders, June 2014, WBG

23. How National ID Accelerates Digital Economy by Rahul Parthe
Thank you“
“
www.interbio.id | www.tech5.ai