Governments and organizations have strived to make the world a better place for many years. The introduction of smart cities is a significant leap towards achieving this goal. Smart cities are built on the idea that integrating digital, physical, and biological systems within a city will become more efficient overall. To support this, these cities rely on a technology called digital identity.

Digital identity is how all of these different systems can talk to each other in a standardized way so they can communicate and exchange information. With digital identity, people don’t have to worry about finding information about various public services because everything is available at a single touch on their smartphones or other digital devices.

What is digital identity?

Digital identities are managed and controlled by the organizations that create them. They represent entities in online interactions with other organizations, individuals, or devices and are associated with various attributes such as physical characteristics, skills, social network profiles, online presence, etc.

For smart city initiatives to be successful, every person in the city must identify themselves digitally to take advantage of smart city services. This means that they need a secure, private and portable way to assert their identity online at all times. Using traditional methods of identification, such as government-issued ID cards with magnetic strips, are not an ideal solution in this case because they do not provide these three essential qualities.

How it will work in smart cities

The advent of the digital identity will be a pivotal event in the future of cities and the world. Digital identities, when combined with a smart city’s connected devices, will empower city dwellers to have greater control over their lives. This power will be used to improve services and resources that are currently available.

Here are ten ways the digital identity will work within a smart city.

1. It will allow hotels to check your booking, room, and payment preferences

The digital identity platform will allow hotels to check customers’ booking and preferences in real-time and offer personalized services such as room upgrades and transfer services. If the customer decides to avail of such services, the customer may also be allowed to make payments using a credit card or cryptocurrencies.

2. You won’t be required to show your passport at the airport anymore

Digital identity will make travel easier for everyone. It will help with security and convenience by making it possible to verify your identity without the need for physical checking of documents and IDs.

In fact, in November 2021, Delta Air Lines launched a new digital identity program at Hartsfield-Jackson Atlanta International Airport. The program allows T.S.A. PreCheck members use facial recognition to check a bag and board their domestic flight.

3. You can go to the hospital without bringing a physical form of identification

All hospitals, clinics, and other medical establishments can ensure secure storage of information that unauthorized personnel cannot access. This secure system can prevent fraud or any identity theft.

The digital identity system can help patients store all their medical history and records, which they can access anywhere and anytime with sealed authorized access.

4. It will help prevent financial fraud and expedite instant loan approvals

Digital identity will be a massive boost in efficiency, convenience, and security for the financial sector. An individual’s credit history and personal information can be easily stored on a blockchain, allowing lenders to draw up credit histories, credit records, and credentials for potential and existing borrowers.

It will help non-financial institutions prevent financial fraud as well. By using blockchain technology and biometrics as part of their digital identity solutions, companies can verify an individual’s identity before issuing a loan or making other decisions that impact their finances.

5. It will help reduce congestion during rush hours

Digital identity will collect individuals’ information and find people who have similar routes, destinations, and travel times. It can be tied to an app that will send notifications regarding accidents, traffic jams, and other road-related problems. For example, the app detected a fatal car crash near Cupertino, California. This information will be sent to all users living near the affected area, causing them to avoid the highway and thus avoiding congestion.

This system can also be used daily during rush hour and is expected to reduce the number of cars on the road.

6. It will provide a more seamless authentication process for payments

With digital identity, payment transaction processing becomes faster and safer for merchants and consumers. Merchants can reduce chargebacks because they don’t rely on users to input the correct billing details. Consumers get the convenience of a one-click purchase without having to key in sensitive information each time they make a transaction.

7. It will give personalized advertising based on the data collected about you

The more targeted your online ads are, the more effective they tend to be. Digital identity means advertisers can serve relevant ads to people who fit their target demographic.

8. It will make parking more secure by monitoring who is coming and going

Ticket vending machines are one example of digital identity technology in action. They can collect data about when customers enter the building and how long they stay, potentially identifying employee fraud and waste.

9. It will prevent cheating and fraud in the gaming and gambling industry

Verification is one of the core problems in the highly competitive gaming and gambling industry. It’s an effective way to verify the identity of gamers and bettors to prevent cheating, fraud, money laundering, and underage gambling.

The potential market for digital identity solutions is enormous — the market for casinos and gambling was estimated at roughly 265 billion U.S. dollars in 2019, up from the previous year. In 2021, the market was forecast to reach 230.86 billion U.S. dollars, up again from its low point in 2020.

10. You can use your digital identity to register for programs available in the city

Applying for city programs is often done by filling out an online application. Instead of remembering a bunch of information like address, phone number, and email, you can use your digital identity to register for programs available in the city. It allows you to use the same information and privacy settings wherever you go.

Final thoughts

According to Juniper Research, the market for digital identities is expected to reach 8.1 billion by 2025, up from 1.3 billion in 2020. Digital identity is integral to the future of smart cities. As we move into the smart city era and technologies overlap, it will play a growing role in our lives.

We will be built around data, analytics, and highly personalized services in the near future. Cities will need to manage their citizens’ digital identities and provide trusted services to achieve this.

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