Last Thursday, the Estonian government approved the European Union’s digital financing package: Tallinn has always supported the overall objectives of the strategy which, among other things, includes consumer access to innovative financial products with less risk and improved access to business finance opportunities. Digital identity is a whole of measures that aim to support security solutions for the use of artificial intelligence, blockchain, and data management.
On September 24, 2020, the European Commission approved strategies on digital finance, retail payments, and proposals for associated legislative acts. As a result of the implementation of the proposals, the rules applied to the financial sector must be made more digital-friendly, as must consumer safety and innovation in the financial sector, while at the same time mitigating the potential risks related to investor protection, money laundering, and cybercrime. The objective of the retail payments strategy is the provision of secure, fast, and reliable payment services across Europe. The strategy focuses on developing a fully integrated retail payments environment in the EU, including the transition to instant payments and the application of the principles of open banking.
The main objective of the legislative proposal for an EU regulatory framework on digital operational resilience is to prevent and mitigate threats to the financial sector, including IT risks. The aim of the legislative proposals on crypto-assets, on the other hand, is to tap into the possibilities offered by crypto-assets, mitigating risks to investors and financial stability. Crypto-assets are digital representations of values or rights, which are transferred and stored electronically: they can act as a key to service, facilitate payments, or be conceived as financial instruments.
In early March, Estonia declared a state of emergency, closing its borders and entering a complete lockdown to stop the spread of Covid-19. And while other countries have rushed to address school closures and disruption of essential services, Estonia has simply continued to use the thriving and resilient digital infrastructure it had spent decades developing. Digital classrooms, online teaching materials, and a wide range of online public services were already in place. But more importantly, Estonians already knew how to access and use them. The small Baltic country has built one of the most advanced digital companies in the world and, in the coronavirus crisis, this factor turned out to be a lifesaving factor. Some public services continued as before because they were already online. Others were quickly adapted to the new situation.
Estonia’s success, as highlighted by the World Economic Forum, should not be limited to the sphere of technological innovation. At the heart of this transformation is trust in public institutions and conviction among Estonian citizens that everyone will reap the benefits of technological progress. Such broad support has led to a digital revolution that is a real lesson for countries around the world and provides inspiration to rethink public services for a more resilient future. During the lockdown, 99% of Estonian government services remained available online. Online options already existed for day-to-day procedures such as registering businesses and properties and applying for social benefits. Some benefits, such as family benefits, are automatically activated, such as the birth of a child and its registration. Digital medical records and electronic prescription services have freed Estonian doctors, nurses, and administrators to fight the pandemic. A strong public-private partnership has facilitated contactless options in everyday life, including at border crossings. Such online services are possible since Estonia has pioneered the use of digital identity. Official decisions are confirmed with a digital stamp and people can sign with digital signatures. These digital versions are equal to physical stamps or signatures under Estonian law.
The Estonian government has enthusiastically embraced digital life. Even before the crisis, the cabinet was able to hold digital meetings, with members using their electronic identity to attend. In the 2019 parliamentary elections, voters cast 43.8% of the vote electronically. During the lockdown, the government organized a global online hackathon, asking people to address covid-related issues. The results included an automated service for pandemic-related questions and a platform that matched volunteers with people in need of practical help. In Estonia, 87% of schools were already using electronic solutions before the crisis. Estonian teachers are trained in digital education and internet security. The country has set itself the goal of digitizing all teaching materials as early as 2015. The country also came first in Europe in the PISA 2018 test, which measures the educational performance of adolescents around the world, and attributed this success in part to the digital strategy. Wireless internet access is available almost anywhere in Estonia and almost always free. Together with seven other Nordic countries, Estonia provided free digital education tools to support other education systems during the pandemic. At the beginning of the lockdown, schools lent computers and tablets to students so they could access their virtual classrooms from home. Many information and private companies have also donated second-hand devices to pupils.
This is in stark contrast to many other countries around the world, which have frantically tried to move to digital education after the closure of schools and universities. Estonia’s digital resilience extends to higher education. When the world went into lockdown, the University of Tartu switched to distance learning in a single day, since all digital materials were already in place. Countries around the world have rushed to emulate this digital strategy. But Estonia’s digital success has not happened overnight: it has been the result of decades of investment and experimentation, and it goes far beyond the technological sphere. The key ingredient is trust. Estonians trusted their government to build a digital system that served and protected everyone. Privacy is enshrined in a number of laws and regulations: Estonian citizens have always been the owners of their personal data, including health data, and can check online who has examined them; civil servants may not examine or use this data without reasonable justification; citizens can also block access to their health data. The collection of public data follows the principle “only once”: officials ask for all information, such as a change of address, only once. Other public authorities then retrieve this information from a central register, without having to approach the person anymore. In this way, citizens do not have to fill in the same bureaucracy over and over again.
The Estonian experience shows that digitalization has never been an objective in itself, but a tool to make life easier and better for all citizens. This required the implementation of specific laws to ensure their beneficial use, and also required constant political will. In the current crisis, confidence and foresight have borne fruit. Tallinn’s success is often presented as an innovative digital project: in reality, it is a shared vision of inclusiveness, fairness, and respect for individual rights. They are at the heart of Estonia’s social contract and also form the basis of public-private partnerships, tools, and values that will last well beyond the pandemic and will be indispensable in building the most resilient societies of the future.