Bleeding will also cost companies, is it worth it? The end of birth numbers through the eyes of experts

The introduction of generic identifiers has been planned for a long time, but has been constantly postponed. Originally, the birth number was supposed to disappear from documents as early as 2020, now it is expected to be the end of 2024. Over time, it should cease to be used as an identification number in all departments, for example in the health sector, by 2030.

The Czech Republic plans to replace social security numbers with Meaningless Directional Identifiers (BSI), Client Identifiers of Natural Persons (KIFO), Agenda Identifiers of Natural Persons (AIFO) and Liaison Identifiers of Natural Persons (SIFO). They should not include any sensitive personal information, such as date of birth, from which age can be deduced, or gender.

According to the calculations of the consulting company Grant Thornton, the costs of implementing the system alone will amount to 11.4 billion crowns, and the total costs will rise to 56.2 billion, with the vast majority of them going to the private sector. According to the study, the real costs could be even higher.

“Replacing the system of birth numbers with identifiers in an unstable global-economic situation represents a significant financial burden for both the public and private sectors. Both entrepreneurs and institutions are struggling with high inflation. Any higher costs in the current situation can be liquidating for the private sector,” warns Grant Thornton, adding that now is not the right time for a revolutionary transition to a new system. He compares the situation to trying to change the engine of a moving car.

In addition, the decision to limit birth numbers was made at the level of the Czech Republic and does not result from the legislation of the European Union. The proposal was created before the introduction of the general regulation on the protection of personal data GDPR, which in itself strengthened the protection of personal data in both the private and public sectors.

One of the arguments for generic identifiers is the alleged dissatisfaction of citizens with providing their social security number. However, a survey by the IPSOS agency refutes such a claim. It follows from her questioning that 86.6 percent of respondents do not have a problem with providing a birth number for identification.

It is therefore a question whether the introduction of a new system – moreover, in such a short transitional period – is currently necessary at all, moreover, at a time when the state is looking for ways to save every crown. Another large financial burden, which will not be compensated in any way by the state, can also cause huge problems for the private system.

Do you think it is necessary for the Czech Republic to gradually abandon birth numbers? How much of a complication will the transition to general identifiers be for the state and for companies? And are the expected costs in the order of tens of billions worth it?

Pavla Břečková

vice president of AMSP CR

I lack a plausible structure of the costs required for the change, but in the media space I do not consider the amounts mentioned to be too small. The purpose is apparently to ensure greater privacy of citizens, so that the date of birth is not visible from the number / identifier.

For a price in the billions, it is truly a generous undertaking! Especially if I take into account that today in practice we have a problem even with the fulfillment of the most basic stones of the letter of the GDPR, and we witness more or less absurd scenes, for example, in hospital waiting rooms and the like. Citizens’ privacy is remarkably violated, for example, by the police, who, if they only need you as a witness, despite owning a data box, will go around you to all your known addresses, or even “decently” ask your neighbors.

The identifier instead of the birth number sounds almost funny also in the context of the mandatory publication of the address of permanent residence of each shareholder in the commercial register, against which AMSP CR has had reservations for many years. Just as intimate is the annual disclosure of all sensitive data of our companies in the Collection of Documents, in full detail – you will find this rarely.

When we have all this settled civilly, and there is no other priority for funding on the horizon, then maybe I will also lean towards the identifier.

David Pirner

consultant, Grant Thornton

It is a political decision. It is understandable that the protection of personal data of ordinary citizens is becoming an important issue in today’s digitized and connected society. However, after the introduction of the GDPR, the original purpose of restricting the use of social security numbers from 2009 lost its urgency.

I believe that the threat to the very existence of individual companies is minimal, however, the timing and required speed of change can be a great burden for selected companies in the current economic situation. At the same time, there is a risk that rising costs will negatively affect private sector investments in service development, which will then affect their clients.

Every change costs something. If we want to live in a democracy built on protecting the rights of each one of us, we must be prepared to bear the associated costs. From my point of view, the only question is the appropriate choice of priorities and sufficient communication towards the public. And this is not just a matter of this government.

Lenka Michalcová

lawyer, PwC Legal

The urgency with which the abolition of social security numbers is now being debated gives the impression that its very existence is a security risk of catastrophic proportions. And as such, it justifies extensive conceptual changes with a price tag in the order of tens of billions of crowns. On closer inspection, however, we find that the current legislation offers effective ways to manage and minimize this risk. It is a political decision whether we use them or not.

Birth numbers are undoubtedly overused. A person’s birth number is identified in a number of private law relationships, in all state administration systems, and is usually also his tax identification number. The risk of identity theft can thus be understood as an argument for the elimination of the social security number. At the same time, however, it is possible to consider whether the widespread use of social security numbers is in accordance with the principles of personal data protection. These require that personal data be processed in the narrowest possible scope. One of the alternatives to canceling the birth number can be to increase the emphasis on compliance with this principle.

Critics of birth numbers like to point out that they can be used to determine the bearer’s date of birth and gender. However, they ignore the fact that these data will continue to be explicitly stated in the identity card. In addition, it should be noted that the date of birth is usually the basic identifier of a natural person. Anyone who has the right to request the provision of a social security number usually also has the right to request information about the date of birth. In this respect, the benefits of canceling personal data protection for personal data can therefore be doubted.

Marek Ditz

the leader of the Partners Banka project

Personally, I think that a uniform identifier like a social security number is a very practical thing that makes it easier for companies and authorities to process information. Having a unique identifier prevents errors, especially if family members have the same name and live together.

As a reason for changing birth numbers to a new identifier, the fact that age can be determined from the birth number is usually cited, and this can be sensitive for some citizens. This seems nonsense to me, because the date of birth will continue to be a mandatory part of identification data, for example, when identifying bank clients, according to the law. This information will thus continue to be transmitted. So the whole action is pointless in my opinion.

Vojta Rocek

data expert, Partner of Presto Ventures

The expected costs would be worth it if the reform planned not only to abandon social security numbers, but to introduce a fully digital database of all the data that the state records about citizens and companies – and at the same time prepare a simple way to share this information between private and state entities on wish or as needed. We would stop filling out heaps of forms all the time, and instead, with a simple confirmation in the application, we would allow access to a selected group of personal data of this or that entity on the other side. The discussion over birth numbers in relation to the funds spent would thus become irrelevant.

As part of the search for suitable investment opportunities, we travel throughout the wider CEE region and we usually see the successful digitization of state administration precisely where the local startup scene is considered the state’s leading partner for digitization – that is, as those who set the direction and successfully implement the necessary innovations. A good example is, for example, Estonia and, in the last year, also Ukraine.

The problem with the reforms is not their cost – which in this case is considerable – but their superficiality and inadequacy, and the resulting lack of value that we, the citizens, get back for our money. A truly bold and complete digitization would save tens of billions a year and push the Czech GDP higher, because it would unlock the capacities that are now tied to the management of inefficient communication between the state, people and companies.

Lukáš Kovanda

Chief Economist, Trinity Bank

We will take the calculated costs corresponding to 56 billion crowns with a margin. Thus, the fundamental transformation of IT systems represents the possibility of large and relatively easy earnings for various lobbyists and interest groups linked to politics. The bigger the numbers fly through the air, the more room there is for their easy profit. Above all, for profit at the expense of the taxpayer.

At the moment, however, such an IT transformation does not make economic sense. Both the public sphere and the private sector have to deal with much more important tasks, for example the recovery of public finances or increasing competitiveness. Replacing birth numbers with identifiers will not help anything mentioned, on the contrary. So let’s wait until public finances and the economy are in noticeably better shape and then consider whether to implement the IT transformation. However, it should still be significantly cheaper than the figures shown.

With costs in the tens of billions of crowns, it makes much more sense economically and socially to stay with the current system, which has been working well for many decades and does not bring any major problems, not even in terms of possible misuse of personal data.