The move towards digitalisation has been apparent throughout the security documents industry on an almost constant basis. The market that encompasses products such as payment methods, personal ID documents, ticketing, brand protection solutions, tax and postage stamps and corporate documentation is forecast to experience major changes during the five-year period leading up to 2026, according to Smithers’ latest study, The Future of Security Documents in a Digital Age to 2026.
The impetus for the transformation towards a digital age is likely to come from key performers: governments, businesses and consumers. From the present to 2026, businesses and governments will continue to invest in new digital technologies, thereby accelerating the trend towards fully digital societies, as well as adopting greater digitalisation in many types of security documentation. An estimated $6.8 trillion will have been invested into digital transformation by the year 2023, market research shows.
Consumer access to technologies such as the internet and internet-enabled mobile devices (e.g. smartphones) continues to represent one of the main factors driving the move towards digital security documentation. Greater investment in infrastructure and rising income levels in many parts of the developing world continues to increase global internet usage, while penetration of devices such as smartphones also remains on an upwards trend.
Covid-19 pandemic has accelerated many of the industry changes already underway. Notable examples include the heightened demand for contactless solutions in sectors such as payment methods and ticketing, as well as the interest among many of the world’s governments for digital products that can help curb the spread of the virus. These technologies also have a role in restoring economic growth by reducing the need for further lockdown measures.
Leading government action
The role of governments is most evident within sectors such as digital identities, where numerous programmes and initiatives are under way to establish more secure and sophisticated ID systems for citizens. Governments in many parts of the world have also been turning towards digital solutions to help rebuild their economies after the devastation caused by Covid-19. Examples include developing vaccine passports to reopen industries such as air travel. Furthermore, governments also have a major role to play in the anticipated future development of Central Bank Digital Currencies (CBDCs), since they are likely to have the final say on whether their respective countries adopt these as a currency system or not.
Future activity within the sector from 2021 to 2026 is likely to focus upon the further growth of digital ID apps, according to the new research from Smithers. These apps store personal details in encrypted formats, allowing for access via devices such as smartphones. As the sector develops further, it is possible that additional features and facilities will be added to digital identities, such as payment methods and credentials, to create more holistic solutions serving multiple purposes. The trend towards digital identities is also expected to incorporate the use of biometric technologies to provide an additional layer of security alongside existing overt and covert solutions.
Technology progress in business
Businesses have been driving much of the technological advances that has contributed towards the recent digital transformation. Not only have companies been digitalising many of their internal and external procedures in search of greater efficiency, but they have also been at the vanguard of developments such as digital onboarding (online processes allowing individuals sign up with companies or organisations to later access their products and services), as well as technological advances like the introduction of 5G and the Internet of Things (IoT).
Within sectors such as passports, ID documents and ticketing, companies continue to experiment with biometric solutions to improve efficiency and security. Facial recognition systems are one notable example.
The global payments industry has undergone huge changes over the last couple of decades, largely resulting from the arrival of the digital age. Broadly speaking, payments have transformed from physical paper-based varieties such as cash and cheques to more sophisticated electronic methods, such as payment cards incorporating chip technology and bank transfers. The most recent stage of market development has been the adoption across much of the world of what have been termed digital and mobile wallets, largely driven by technology firms such as Apple.
The world’s authorities are working to improve the identity credentials of the global population is ID theft and/or fraud. This now encompasses a wide range of techniques and is usually linked with various criminal activities, examples of which include terrorism, drugs and people trafficking, illegal immigration, etc. The United Nations now estimates the global cost of identity fraud at $7.6 trillion, with the situation believed to have worsened during the Covid-19 pandemic.