The Rise of the e-State – A Story About Estonia

Shimrit Tzur-David | June 20, 2018

We are approaching a future where our physical identity and digital identity will merge.

Today, our biological traits, behavioral markers, and other characteristics are used to identify us in the digital sphere, affecting more and more aspects of our daily lives.

The numbers on this shift in identity authentication are pretty clear.

In a recent IBM study surveying citizens from the North American, European, and Asia Pacific countries, 67% of participants stated they were confident using biometrics tools as a form of authentication, and almost all (87 percent) said they would be willing to use these technologies in the future. Even more, telling was this: the overwhelming majority, 75 percent, of young adults think that the more traditional password is obsolete as an authentication method.

What this and other research in the industry has revealed, is that changes in preferences are being driven by a tricky dichotomy when it comes to authentication. Users have to contend with the h need to achieve high-security assurance while finding a way to incorporate easy access. At an enterprise level, whether in business, government, or any other organization, this means keeping assets safe from intruders, while ensuring the smooth flow of operations.

The future workforce will require as a system that provides a hassle-free high assurance authentication that will balance usability with security.

The rise in popularity of alternative methods, such as biometrics and facial recognition, can be seen as a direct result of growing public awareness to the risks of password-based authentication and the threats they pose to digital identities.

The industry of information technology is starting to realize that a higher level of authentication can be used to give easier access to a larger variety of services, and fundamentally change the way organizations operate. And this change is not limited to the private sector.

The Rise of the e-State

Imagine a country where you never have to wait in line for any government services. Where any bureaucratic task, at the individual or organizational level, easily accessed digitally. Imagine a place where you could:

  • Open a business
  • Pay Texas
  • Vote
  • Check medical records and change health insurance
  • Submit any type of government form or request and sign them
  • Execute bank transactions

all from your smartphone or laptop.

Think of the time you would have saved and the resources. Sounds a bit too good to be true.

Now stop imagining and lets head to one of Europe’s most technologically advanced countries, Estonia.

A few years back Estonia experienced substantial economic hardships. The 2008 recession hit the country hard. Unemployment reached double digits and the country found itself in a real financial bind.

Estonia GDP per capita

The government lacked the funds to maintain its own services, pay employees and support its bureaucracy.

Unlike most European countries that were hit by the 2008 economic crisis, Estonia decided that the answer was to drastically cut back on government expenses. Policymakers began strategizing on how to optimize functions and make the government as cost-efficient as possible.

The answer?

Move operations to the digital sphere. Estonia transferred all official services to the cloud, taking the country’s governmental administration into the future.

The first step was to issue a new form of individual identity authentication. The government launched a nationwide program to provide a secure 2048-bit ID-card to every Estonian citizen.  Shortly after, the government released a Mobile-ID authenticator that requires an encrypted sim-card, allowing the citizen to safely use any government service with the highest level of security. The availability of both a hard token option in the form of an ID card and a soft token method in the mobile app, assured high acceptance rate among the population’s diverse age groups.

Utilizing high assurance authentication, the government replaced all its services with e-services, allowing the country to:

  • Save an average of 6 work days per citizen
  • Drastically reduce government overhead
  • Provide a hassle-free experience for its citizens
  • Remove bureaucratic roadblocks and become the easiest country in which to open a business in Europe
  • Optimize any process that requires identification – from banking to processing medical forms, to filing taxes

What started out as an attempt to fix the country’s financial crisis, ended up producing the greatest revolution in national scale organizational efficiency in Europe’s history. In addition to saving mounds of paperwork, officials say that move to digital has elevated the countries annual GDP by 2 percent. Indeed, the overall economic growth in Estonia over 2017 was the fastest its been in five years. This was almost entirely a result of advances in the digital communications sphere, supported by growth in programming and software development, all triggered by the government initiated digital identification program.

But beyond just higher chart numbers, Estonia’s revamp brought a transformation to the country’s entire business environment. The new e-government opened the door for Estonia to establish itself as a startup hub and a friendly environment for entrepreneurship and foreign businesses. There are some 21,000 foreign “e-residents” of Estonia, all of whom can conduct business in the country without setting foot in it.

The story of Estonia is a powerful example demonstrating how high assurance authentication can remove bureaucracy and open optimize the provisioning of services, support growth, foster business innovation, and attract foreign investment.

Estonia GDP growth

Applying the Model to the Enterprise

Now, let’s move from the .gov domain to the private sector.

Companies today use digital authentication to authorize both employees and clients to execute a wide spectrum of actions on the network, from transferring data to making payments.  The more seamless and secure the authentication process utilized by a company, the more services–at a quicker pace, and with fewer costs– it can offer to its users. Achieving a high level of authentication efficiency not only protects the organization’s data, it also allows its users to do more.

What Estonia’s transformation has shown is this is not just a theoretical possibility, but an implementable, real-world solution.

E-signature technology has already been shown to have saved countless manpower hours and resources for enterprises across the world. Just like digital authentication revolutionized processes and bureaucracy for the Estonians, it can open up business options that were not available in the past by slashing costs and making services more easily accessible to customers.

High assurance authentication methods are the next big leap for the business world.

Organization leaders seeking to find the right authentication tools for their enterprises will mean homing in on the solution that combines strength with ease of usability. Some solutions excel in security but are cumbersome and complex to use, interfering with workflow, and ultimately compromising employee effectiveness. Others are easy for users to engage with, but are fundamentally weak, and in the end, are leaving users exposed.  Finally, companies will need a scalable solution that can accommodate an entire organization.

Like Estonia, an organization that utilizes advanced authentication technologies can bring their business operations to the next level, allowing users to access more services and reduce overhead while improving the user experience for both employees and customers.