After gaining independence from the Soviet Union in 1991, Estonia, one of the smallest nations in Europe, was left with little public infrastructure and virtually no commercial activity. It needed to build high-functioning government services for its residents and the nascent private sector. As a solution, the Estonian government has doubled its investment in technology, including aggressively in its efforts to bring services and citizens online. In 2003, it launched the first version of its e-government portal, which offered secure online access to a handful of government services. Already in 2012, as McKinsey pointed out, Estonia’s 1.3 million residents could use electronic ID cards to vote, pay taxes and access more than 160 online services, from unemployment benefits to property registration. Private sector entities, such as banks and telecommunications companies, also offered services through the state portal, which were incentivized to invest in maintaining the infrastructure. Not surprisingly, the country has one of the highest rates of internet connectivity in the world: over 75% overall and almost 100% for people over the age of 35. Then how technology took Estonia to the next level?

As already mentioned, the offers of the state portal are not limited to services provided by the government. Citizens can use the system to connect with private sector entities, such as banks, telecommunications providers, and energy companies. X-Road, a secure data access platform that connects existing databases, allows users to access data seamlessly from different sources. X-Road does not require you to create new databases or integrate existing databases into a master database. Rather, all data remains separate: each government agency keeps its own, in its original format, on its servers. X-Road can also connect to the databases of private companies, thus allowing electronic ID cardholders to access both private data and government records through a single interface. When banks in Estonia realized that the government-designed e-ID authentication system was the most secure of the alternatives, they began requiring customers to use government e-IDs when they transfer large amounts of money. Today, customers can access their bank accounts directly from the state portal. They can also claim movie loyalty rewards, buy bus tickets, pay bills, and renew medical prescriptions.

Since the system would require an initial investment of about 50-100 million euros, the government knew it needed a critical mass of users, quickly. When the portal was first launched, services were limited. To attract users, the government offered a 30% discount on public transport to people who would register with the e-ID system. The number of electronic ID cardholders increased by 213% in 12 months. At the same time, the government wanted to develop a system that could address privacy issues. Estonia had to ensure that residents understood and felt comfortable with the use of their data. The architecture of the e-government systems has been integrated with an audit function and legislation to allow citizens to control the privacy and the use of personal data. Everyone can review the entire history of the investigations carried out, including those of police, banking, and health. If a user does not recognize or approve a request, he can lodge a complaint with the Estonian Information System Authority. In 2009, internal controls led to the suspension of a police officer for inappropriate access to public records.

Residents of Estonia may choose not to make their data accessible. A user’s medical records, for example, are available by default for viewing by all authorized physicians, so that they have a large database for common conditions and treatments. However, patients can block access to electronic health records. This type of system, according to the government, has significant advantages, but may not be viable in countries that place greater emphasis on personal privacy rights.