Indonesia Embarks on Digital Identity Revolution
In a bid to accelerate financial inclusion and enhance cybersecurity, Indonesia is set to revolutionize its digital identity landscape.
Enhanced Infrastructure
The government has proposed significant investments in network and cybersecurity systems, as well as reliable application programming interfaces (APIs) for Proof of Identity (PoI) or Proof of Address (PoA) services. The enhanced infrastructure will facilitate third-party access and enable private sector players to utilize verification services available on the national ID infrastructure.
Rules of Engagement for Private Sector
To achieve this goal, the government must define a standardized set of rules of engagement that foster a robust rules-based ecosystem. This includes:
- Publishing a standardized list of requirements for different levels of verification services, enabling industry players to choose from a setlist based on their needs.
- Open APIs will enable developers and service providers to connect securely and seamlessly to the national ID database.
Pricing Strategies
Countries around the world have adopted different pricing strategies for digital identity services. Some consider it a public good, while others adhere to a hybrid approach where access is free for public institutions but charged nominally for private sector players.
Indonesia has the option to adopt a similar strategy. A tiered cost structure can enable different levels of access, with estimated costs per request ranging from IDR 400-800 (USD 0.03-0.05) for authentication services to IDR 4,000-7,000 (USD 0.28-0.47) for e-KYC services.
Data Protection
To ensure the protection of customer data, Indonesia needs to speed up the establishment of a personal data protection law. The proposed verification services must adhere strictly to mandated data protection protocols, mitigating risks related to abuse of personal data and increasing confidence among policymakers and consumers.
The implementation of data protection protocols could also enable open banking services, allowing users to share or protect their personal data while accessing a range of digital services.
Conclusion
Indonesia’s proposed investments in digital identity infrastructure are expected to yield significant cost savings in both public and private sectors. The government must define rules of engagement for the private sector, adopt a pricing strategy, and ensure the protection of customer data to accelerate financial inclusion and promote innovation in digital identity solutions.