National Digital IDs: Convenience vs Risk
By Becky Stacey | 2 February 2026
BISI is proud to present this piece in collaboration with CyberWomen Groups CIC. Through this partnership, we have combined our expertise in political risk with their knowledge of cyber security to deliver a fresh perspective on emerging threats.
CyberWomen Groups CIC is a student-led initiative dedicated to diversifying STEM by supporting and connecting university students interested in or studying cybersecurity, regardless of gender identity.
Summary
Governments worldwide are increasingly introducing digital identification systems to streamline access to services across.
By centralising identity, these schemes shift power toward the state, making systems prime targets for cyberattacks, and tie citizens’ access to services and trust directly to the security and reliability of the infrastructure.
In the long term, a digital ID system is likely to be a high-value target for state-level attacks and organised cybercrime.
Context
Governments worldwide are accelerating the introduction of national digital identity (digital ID) systems to modernise public services, reduce fraud and enable secure online transactions. In the European Union (EU), this was proposed at the European Commission in 2021 as the European Digital Identity (EUDI) Wallet. Member states will make wallets available to every citizen, resident and business by the end of 2026, which will store multiple documents such as passports, driving licenses and qualifications. In the United Kingdom (UK), the government announced plans to introduce a digital ID scheme by the end of the current Parliament (i.e. by 2029). It has been positioned as a cornerstone of modernising public services and strengthening border control, but has spurred debate about civil liberties, data privacy and security.
In a different light, Estonia first introduced a digital ID system in 2002 to connect to its physical ID documents. Citizens use it to vote digitally, file taxes and do online banking; this positions the country as a model for digital governance. All these initiatives are driven by efficiency, economic growth, and digital inclusion. However, central digital systems significantly expand the risk of cyber-attack, raising critical security concerns.
Implications
Digital ID schemes alter the relationship between citizens and the state. Centralised identity infrastructures grant governments unprecedented visibility over individuals' interactions with public and private services. This raises concerns for the future; systems introduced for convenience could later expand into surveillance or enforcement tools. Where public trust is fragile, a single high-profile breach will likely erode confidence in governance and broader digital policy.
From an operational perspective, digital IDs create a single point of failure, elevating risks over privacy and data protection. Outages, software bugs, or vendor failures could prevent millions of users from accessing essential services. In the UK and EU models, where multiple private providers are involved, inconsistent security standards increase complexity and risk. Estonia’s success relies heavily on robust operational discipline, which may not scale easily to larger, more fragmented leadership structures.
Cybersecurity is the most significant risk. Digital IDs are high-value targets for nation-state actors and hacktivists. Unlike passwords or bank cards, identity attributes cannot be easily revoked or replaced once exposed. The UK government has emphasised that its system will be designed with security at its core, using state-of-the-art encryption and storing credentials directly on individuals’ own devices. This means the data isn’t stored on a central database and can be revoked if a device is lost. However, critics have warned that without rigorous testing, vulnerabilities could lead to significant breaches.
Economically, digital IDs may reduce fraud and streamline services, but breaches carry severe downstream costs. Identity theft enables financial fraud, benefit abuse, and long-term personal harm to victims. For governments, recovery costs, litigation, and loss of public trust can outweigh projected savings. Similarly, businesses may be required to integrate digital ID checks into their systems; for large firms, this would be manageable, but for SMEs, the costs of integration and staff training can be high.
Forecast
Short-term (Now - 3 months)
It is a realistic possibility that the initial rollout of EU and UK systems may reveal software bugs, usability issues, or integration problems with third-party providers.
Medium-term (3-12 months)
As adoption increases, it is highly likely that digital ID systems will face cyber threats, including phishing, device theft, and targeted attacks on high-value accounts.
Long-term (>1 year)
It is a realistic possibility that digital ID systems will be high-value targets for state and organised cybercrime attacks. Outages or breaches would disrupt essential services and have lasting economic and reputational consequences.
