Individuals can use digital identification, or “digital ID,” to be verified unambiguously through a digital channel, unlocking access to banking, government benefits, education, and many other critical services.
Programs employing this relatively new technology have had mixed success to date—many have failed to attain even modest levels of usage, while a few have achieved large-scale implementation. Yet well-designed digital ID not only enables civic and social empowerment, but also makes possible real and inclusive economic gains—a less well understood aspect of the technology.
Digital identification: A key to inclusive growth
In new research, the McKinsey Global Institute (MGI) develops a framework to understand the potential economic impact of digital ID, informed by an analysis of nearly 100 ways in which digital ID can be used, with deep dives into seven diverse economies. The potential for economic value creation could be significant as “good” digital ID increases inclusion, formalization, and transparency while promoting digitization, however risks need to be addressed.
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