SPI Insights

This digitization trend will impact individuals and offer opportunities

The world is changing rapidly, and technology is morphing so quickly that individual lives are being impacted in ways that may have escaped notice. Staying abreast of life-changing trends has never been harder. One more recent trend is worthy of note – a steady shift toward all individuals having digital IDs.

Numerous states have either adopted, or are in the process of considering, digital identification technology for citizens. States that have already implemented digital IDs include Iowa, Alabama, Colorado, and Arizona. Other states such as California, Nevada, and New Jersey have recently adopted legislation authorizing the issuance of digital IDs.

These identification systems offer many benefits, but, despite that, there has been significant controversy and pushback from groups and organizations that dislike the trend because of privacy concerns.

Digital IDs are currently being utilized for fraud protection and for health and safety purposes in response to COVID-19. Louisiana’s digital ID system, the LA Wallet, has expanded to include proof-of-vaccination on its mobile app. The system allows individuals to download COVID-19 vaccination records and keep them available on digital ID apps. Additionally, the states of Alabama and Ohio are using digital ID systems to protect citizens from identity theft and fraud. The state of Nevada is implementing digital identity technology as a deterrent to unemployment fraud.

A few states that earlier banned vaccine passports because of privacy and security concerns have now adopted the use of digital IDs. Florida, for example, will launch a mobile ID system this year although the state banned the use of vaccine passports. Similarly, Texas is considering a digital ID pilot program even though the Legislature limited the use of vaccine passports.

Travelers on many airlines are now being asked to show proof of vaccination status, which for some will be integrated into their digital ID app. And, tech companies are preparing to offer digital IDs to mobile wallet applications. The digitization trend is gaining strength quickly.

The Department of Homeland Security (DHS) recently issued a request for information (RFI) to gather information related to security standards and requirements for mobile/digital driver’s licenses. The agency plans to use the information gathered to determine if digital IDs comply with the Real ID Act and whether federal agencies will accept these credentials.

Real ID requirements create a minimum-security standard for driver’s licenses and ID cards. Federal agencies are required to only accept Real ID compliant forms of identification. As a result, citizens now need a form of identification that is Real ID compliant to enter any federal facility or board federally regulated aircraft. DHS has outlined a phased enforcement schedule and timeframe, and approximately half of the states are already in compliance with these standards.

As always, with governmental agencies making changes, there will be an abundance of contracting opportunities. Examples of what to expect follow.

 
California
The state of California, in the most recent legislative session, a bill authorizing the Department of Motor Vehicles to conduct a pilot program for digital driver’s licenses and identification cards. The current estimate for a pilot program is $1.1 million. The Department of Technology on behalf of the Department of Motor Vehicles is seeking contractors for the Digital ID project.

 
Florida
The Florida Legislature recently passed SB 1324, which requires the Department of Highway Safety and Motor Vehicles (DHSMV) to create a pilot program in order to establish a secure and uniform system for issuing digital driver licenses and identification cards. The bill authorizes the DHSMV to work with private sector contractors to create an electronic credentialing system.

 
Indiana
The governor of Indiana recently signed a bill authorizing the Bureau of Motor Vehicles (BMV) to issue digital driver’s licenses and identification cards which will be stored on a mobile application created by the BMV. The agency has not yet completed the work required to develop and roll out the digital IDs and mobile application. Interested contractors should check with the agency for future opportunities.

 
Nevada
A bill passed by the state’s legislature and signed by the governor, SB 204, allows the Nevada Department of Motor Vehicles to establish an electronic branch office capable of issuing cards, certificates, or licenses in electronic form.

 
New Jersey
Legislation authorizing the New Jersey Motor Vehicle Commission (MVC) to issue electronic driver licenses is currently awaiting the governor’s signature. The recently passed legislation NJ A5433 requires the MVC to create a mobile driver’s license and identification card system. Contracting opportunities will follow.

 
Pennsylvania – Exploratory
Public officials in Pennsylvania have been discussing the creation and implementation of a mobile ID system the past couple of years, but there has been no legislation passed yet. Pennsylvania officials, however, have indicated a significant interest in learning more about digital IDs and most believe the state will move forward in the not-too-distant future.

 
Digitization is impacting government data and services significantly. The only thing slowing down the digitization trend is funding. With anticipated federal funding for technology modernization, the trend will move more quickly. Digital IDs are the future, and the only questions remaining are what individual states will allow or require for the public.