Almost every day, we’re active in the online world. This makes our online presence just as important as our physical one. Online activities include using social media, making transactions, ordering food, and shopping online. All of these rely on our digital identity.
Understanding the importance of digital identity is essential for verifying our authenticity in the digital space. In essence, your digital identity is the online equivalent of your real-world identity.
To understand digital identity in this hyper-connected world, let’s dive into the explanation below!
Digital identity is a unique representation of a person, organization, or device in the digital realm used to prove identity and grant access to online services or systems.
According to the World Bank, digital identity is a set of attributes captured and stored electronically to represent a person and used in digital transactions. These attributes can include biometric data (like fingerprints or facial recognition), demographic data (such as name and date of birth), or credentials (like digital tokens or electronic certificates). Meanwhile, the NIST (National Institute of Standards and Technology) defines digital identity as a unique representation of a subject involved in online transactions, consisting of identifiers, authentication credentials, and the association between users and the devices or data they use.
Many people think of social media or bank accounts as digital identities, but they are not the same.
An account is the result of using a digital identity to create a profile on a platform.
Digital identity is the foundation used to create and verify the owner of that account.
Example: When you create an account on a digital banking app, you’ll be asked to verify your identity using your ID card and a selfie. Your ID card and face are your digital identity, while the bank account is a product created using that identity.
These are digital identities issued by the government, such as the Indonesian e-KTP, used to access public services like BPJS (social security), tax services, and more. These IDs are typically linked to biometric data such as fingerprints or facial scans and connected to national databases.
Financial identities include bank account numbers, digital wallets, or mobile banking apps. These accounts are usually verified with ID cards and biometric data for security.
These include digital identifiers like fingerprints, facial recognition (Face ID), and iris scans used for authentication in digital systems.
Social media accounts like Facebook, Instagram, or LinkedIn are digital representations of ourselves online. These accounts are used for interaction, sharing information, and even logging into other platforms via “Login with Facebook/Google.”
Devices like smartphones and laptops have unique identifiers (IMEI or MAC addresses) that can be used for verification. Some services bind accounts to specific devices to enhance security, such as device-based authentication.
Digital identity is especially beneficial in the financial sector by improving access to various financial products. However, its advantages go far beyond that:
Digital identity stores comprehensive information about a person—from personal details like name, birth date, and address to sensitive data such as medical history, financial status, and legal records. All this information is stored digitally and can be securely accessed by authorized institutions when needed.
This system makes data retrieval and verification much faster and more efficient. It also supports transparency in administrative processes that involve personal identity.
Digital identity speeds up administrative procedures across sectors like healthcare, civil registration, education, finance, and legal systems. With your data already in the digital system, there's no need to bring physical copies like ID card photocopies or family records.
Administration becomes easier with a one-time data entry, facial scan, or fingerprint automatically retrieving all necessary information. This reduces waiting times and streamlines public services.
Digital identity plays a major role in validating online transactions. For instance, biometric verification can be used to approve a transaction, or a digital signature to sign documents.
This validation also applies to social media and other digital platforms, where verified accounts receive a "verified" badge to help users distinguish real accounts from fake ones and reducing the risk of online scams.
Digital identity acts as a safeguard against cyber threats like identity theft, phishing, and account takeovers. Biometrics such as facial recognition and fingerprints offer more secure authentication than passwords or PINs.
Not to worry, digital identity data is usually managed by official institutions or certified digital identity providers, which are subject to strict data protection regulations.
According to World Bank data (2021), 51% of Indonesians still lack access to formal financial services. The 2021 Global Findex survey revealed that 66 million adults in Indonesia do not have bank accounts. As a result, they rely on informal financial services that carry high risks.
Digital identity bridges this gap. With just an ID card and facial verification, people can open bank accounts, apply for loans, enroll in BPJS, or access government aid programs—all online.
As a certified digital identity solution provider, VIDA offers the VIDA Identity Stack, a technology suite designed to ensure digital identity security, including:
Using technologies like face liveness and document liveness, VIDA accurately and quickly verifies identities, ensuring users are legitimate.
VIDA replaces passwords with biometric and device-based authentication like VIDA FaceToken and VIDA PhoneToken. This makes the system more secure against phishing and social engineering attacks.
VIDA employs AI and liveness detection to identify suspicious activities such as deepfakes and injection attacks during user sessions.
Digital identity holds great potential for building more inclusive and secure services. However, this technology must be accompanied by strong data protection systems and digital security education.
Solutions like those provided by VIDA form a crucial foundation to make digital identity the gateway to more inclusive services.