Estonia becomes the first country to create a fully digital vehicle registration service with the help of tech company DriveX.
“Transport Administration has a great opportunity to create Europe’s first fully digital registration system in cooperation with DriveX, considerably simplifying the first registration of Estonian citizens’ and companies’ vehicles,” Joel Jesse, the Director of Mobility Management Services at Transport Administration, said. “Thanks to this, we will definitely save money and customers’ time and will be able to make operations faster and more efficient, as customers will not need to come to one of our service offices any more physically.”
AI-assisted digital customer service
Until now, first vehicle registration – meaning the registration right after a vehicle has been imported to Estonia in most cases – has only been possible by visiting one of the offices of the Transport Administration. This year, a new self-service environment will be launched, allowing fresh passenger car owners to take photos of their vehicles and upload them without leaving home or work. The vehicle has to be taken to a Transport Administration’s office only if any additional checks are needed.
The DriveX system helps to create good quality photos, supplemented by trustworthy metadata, allowing the employees of the Transport Administration to evaluate if the vehicle complies with all the regulations. For the customer, the system is intuitive and easy to use. Interactive instructions and AI technologies, such as computer vision, are used to ensure the quality of the result.
As the need for digitalisation across Europe grows, there has been interest in DriveX’s innovative system from other countries.
DriveX’ founders
A significant step in e-state solutions
“About 116,000 vehicles are registered in Estonia every year,” Rauno Sigur, CEO of DriveX, commented. “In all of Europe, the figure is around 32 million. Therefore, the market potential is immense, and the demand for a digital vehicle registration solution is growing. Implementing our imaging technology at Transport Administration, Estonia will once again take a significant step forward in developing the e-government and make the vehicle registration process many times more efficient.”
DriveX is an Estonian startup founded in 2019. Its vehicle inspection systems are already in use at several international insurance companies. This far, the company has raised 1.2 million euros of investment.
The year may be 2023, but even in digital-savvy Estonia, many entrepreneurs still do business as if it were 2008. Invoices are most often sent via email, typically in a PDF file, and just exchanging goods can result in mounds of messages and files, what some call digital garbage.
A new initiative led by the Estonian Ministry of Economic Affairs and Communications aims to change this status quo. It is called a real-time economy and supports a digital ecosystem where transactions occur in real time. Rather than sending emails or even relying on paper invoices, companies will exchange digital, structured, machine-readable data in standard formats. Such exchanges will occur automatically in the background, giving companies full assurance that the data will arrive seamlessly at the right place at the right time.
Rolemodel Finland
According to Sirli Heinsoo, head of the real-time economy at the Ministry of Economic Affairs and Communication, the effort to standardise business transactions has continued for some time. Inspired by similar efforts in Finland, Estonian companies began exploring the idea of creating a real-time economy ecosystem over a decade ago. In 2016, several firms received the first of several EU grants to investigate the issue. It soon became clear that the private sector could not implement a real-time economy ecosystem alone, and the state needed to be involved.
“What was needed was a fundamental change of thinking in the public sector and a focus on reducing the administrative burden on entrepreneurs to make their life easier,” noted Heinsoo. She said that while the public sector has strived to reduce the administrative burden of its institutions, it hadn’t been thinking about entrepreneurs enough.
Heinsoo joined the ministry at the end of 2019 to oversee the project, and in 2020, a vision for an Estonian real-time economy and a work plan was published. The overarching goal is to improve productivity by standardising and automating the way data is exchanged, both between companies, as well as with the state. Real-time data exchange solutions include e-invoices, e-receipts, data-driven reporting to the state, and other financial and non-financial data exchange mechanisms, such as e-waybills, created when goods are transported across national borders or digital product passports in the near future.
By shifting to fully digital transactions, participants in a real-time economy should become more efficient in operations and obtain a better understanding of their data, which could be used to improve future services too. Meanwhile, the state can carry out automated business reporting and use such high-quality data to compile detailed and more precise statistics, which could be used for better data-driven business decisions.
Towards standardised and shareable data
Electronic invoicing is a core component of a real-time economy. Estonia is moving to the European standard for e-invoices, making it easier to invoice clients in other EU countries. The state has also pitched in to support the adoption of e-invoicing by making grants available to entrepreneurs and organising workshops on e-invoicing. Electronic receipts are also important, and Estonia intends to adopt a new European e-receipt standard when it is completed later this year. The government will offer similar incentives, funding, and workshops to support the rollout of e-receipts, according to Heinsoo.
These puzzle pieces comprise a real-time economy, but the underlying goal is to have standardised, shareable data. “Right now, data just sits within a company’s financial software system,” remarked Heinsoo. “And it is not comprehensible to other systems,” she said. She added that when two companies collaborate at the moment, it often requires the work of several people who manually transcribe data from one system to make it compatible with another.
In the future, all of this data should be interoperable. Heinsoo said that products would also have something like a digital product passport that contains standardised information that is readable via a barcode or QR code. It might consist of what the product is, how much it weighs, or its carbon footprint. All this data would be readable and could be used to compile statistics.
Step by step
Heinsoo stressed that realising the real-time economy will take time. This year, the ministry is working with about 20 institutions to develop a taxonomy for data-based reporting to state institutions and is planning a support measure for the private sector so that they can submit reports in an automated manner. While some Estonian companies have been using e-invoices for years, the ministry will continue to support their adoption this year through grants and workshops, she said. Heinsoo added that e-invoices are the most important base for future data-driven and automated reporting and new value-added services built upon quality and standardised data.
She noted that real-time economy solutions could be used across borders, and international active cooperation is a daily practice in Estonia. For example, the ministry is also engaged in an international project involving Finland, Latvia, Lithuania, and Poland to create a tool to help entrepreneurs submit sustainability reporting, focusing on small and medium-sized enterprises. The effort involved 12 partners and commenced this year.
One additional initiative underway is the creation of a Know Your Customer (KYC) service to help companies expedite the lengthy and expensive process of business partner verification.
Mindset change
According to Heinsoo, private sector involvement in these endeavours is on the rise. Entrepreneurs are becoming more active in implementing a real-time economy as they see such changes benefiting their businesses.
“Today in Estonia, 90 per cent of bills in the private sector are sent as a PDF and by email,” said Ulvi Tallo, founder and CEO of Grow Finance, a Tallinn-based financial services company. “This is an old way of doing things that we need to get rid of,” she said. “It slows down the economy and creates a lot of unnecessary steps, and you don’t send just one email but several.”
Tallo said data would move seamlessly from system to system in a real-time economy. “One document will be sent,” she said, “instead of 10 emails.”
However, getting people to move to a real-time economy ecosystem will take more than just building the infrastructure, Tallo argued. People are used to sending PDFs, and it will take time to change their mentality. Electronic invoices, in contrast, often require some dialogue about how to send an e-invoice, plus exchanging the requisite information to make the transaction. As such, sending an e-invoice needs to be simpler than sending an email with an attachment, Tallo said.“People will always choose what is more comfortable.”
Heinsoo added that people are suspicious of automated solutions and that scepticism must also be overcome, especially as the state does not intend to make such services obligatory. She said there needs to be a “very big change in mentality” to encourage the adoption of real-time economy solutions. The state would like people to view the changes positively and choose the most cost-efficient alternative by themselves.
Tallo also commented on the government’s support of a single KYC service, stating that her company spends a considerable amount of resources on data collection to prevent money laundering and that if such data collection was run via a single system, the process of verifying customers could be conducted much more efficiently.
For the first time in history has a majority of votes in a national parliamentary election been cast online rather than on paper. Estonia elected its parliament in the first week of March, and 51% cast their vote online. Estonia has offered secure i-voting since 2005, and the number of citizens taking advantage of internet voting has gradually increased.
How did I vote
It’s another Monday morning in the office, except the 27th of February is not like any other – it’s the first day of the parliamentary elections in Estonia. I am hosting a delegation very soon at the e-Estonia Briefing Centre, wanting to hear about digital wonders taking place in Estonia.
But it’s the elections! I must vote. Before the guests arrive, I open the laptop and enter valimised.ee to download the voting application. I insert the ID card into the reader, verifying my voting and district eligibility. As I click next, the list of candidates becomes visible. I select my preferred candidate and proceed to confirm. For that, my selection is once more displayed. Upon clicking “vote, ” a window requiring my Pin-2 code pops up, meaning I will seal my vote with a digital signature, a process an average Estonian has performed thousands of times.
It took me around a minute to make my voice heard about whom I want to see govern Estonia for the next four years. It took less time than writing down this explanation.
It’s convenient and safe
I-voting has been available in Estonia since 2005 and relies heavily on strong voter authentication via eID. Since then, five elections of local governments, five parliamentary and three European Parliament elections have occurred. I-voting might provoke mixed feelings about safety and integrity. But one thing is for sure – if there were any doubt our elections might be compromised, i-voting would not be available like it has been for 18 years.
The best part is that you don’t have to trust the process blindly. Here’s how to verify it.
The National Electoral Committee is an independent institution responsible for holding free, general, uniform, and direct voting (offline and online) where every voter has only one vote, and that vote remains secret. The Electoral Committee does not cater to any political power’s needs but rather broadens the participatory democracy for the voters.
I-voting offers an incredible level of transparency and integrity which experts and enthusiasts consistently monitor in real-time, the voting application source code is made publicly available, and several in-depth audits have been carried out on the system’s functioning. Moreover, within 30 minutes after casting a vote, each i-voter can verify with the help of a smart device if their i-vote reached the electronic ballot box correctly. An additional verification mechanism you will never get after dropping your ballot paper into the security box at the polling stati
Misuse of i-voting is also a larger myth than you might imagine. The elderly are the eligible but vulnerable voters group, who, under external pressure, might give their PIN codes and ID cards to the caring staff, for example, in elderly homes. However, hypothetically possible scenario, none of these allegations has been proven despite this matter being the subject of an investigation by the police, the managers of the election, and the Chancellor of Justice.
Also, you can change your i-vote countless times. Not to be confused with casting a limitless amount of votes – changing your one designated vote throughout the i-voting period, in which the vote cast the latest will be counted. Oh! And your right to ballot paper vote still remains! After the end of the i-voting period (in the 2023 Parliamentary elections from February 27th to March 4th), you can still show up at the polling station on election day and make your choice written on paper. In this case, the electronic vote will be deleted.
Check, and then double-check
In 2021 several amendments regarding voting were passed, including enabling the person who has i-voted to change (or affirm) their vote on voting day in the polling station. Hence, i-votes cannot be counted before the polling stations are closed. Once that happens, i-votes are compared to paper votes, double votes are removed (the ballot paper vote remains), and i-votes are anonymised, meaning personal data is extracted. To ensure the secrecy of each vote, the order of anonymised votes is shuffled and re-crypted.
Shortly put – the safety protocol to treat i-votes is deliberately making sure no one can track whom you voted for. Not only is your vote safe, but no one knows it came from you.
Although i-votes are digital, the results are not revealed automatically. The Electoral Committee’s various members holding distributed decrypting keys initiate the i-vote counting process, where digital votes are mathematically verified and the count certificate issued.
In human language, just like paper votes need to be taken out of their respective sealed envelopes and counted by hand, the digital vote is extracted from its digital envelope and run through a counting algorithm; there is no need to calculate every digital vote manually. The first confirmation of i-votes was made public approximately three hours after closing the polling station. The double-confirmation will take roughly the same time, making Estonia’s voting system among the fastest from closing the elections until the publication of results.
The principle of uniformity means that every voter’s vote must have the same weight. In 2005, the Supreme Court found that, in i-voting, despite repeated voting, a voter cannot affect the election results to a greater degree than the voters who use other manners of voting. A vote cast by electronic means is counted as one vote, and in terms of election results, it does not have more influence than a vote cast by a voter using another manner of voting.
The world’s first mostly digital elections
Election participation is not mandatory by the Constitution of Estonia. Every citizen has the right but isn’t obliged to vote. The introduction of i-voting has not previously had a significant impact on voter turnout. The greatest impact on voter turnout has been in voting in foreign states.
In the 2023 Parliamentary elections, the highest voter turnout was registered, amounting to 63,7% of the eligible population.
For the first time in history, more i-votes (51%) were cast than paper votes (49%), amounting to record 313k digital votes registered (The National Election Committee will confirm the Exact percentage of votes).
The record voter turnout surprises Estonians due to the methodology change for calculating turnout from Riigikogu elections. Previously, in addition to the citizens permanently living in Estonia, the turnout reflected only those citizens permanently residing abroad who actually voted. Thanks to the electronic voter’s list, regardless of their permanent residency, all voters will be included in the calculation of voter turnout, expecting the turnout figure likely to fall.
Despite changes in calculation, Estonians are used to electronic services and see them as a natural part of their lives. I-voting is no exception. Although i-voting being available since 2005 already, the argument behind the logic is not any separate e-service, but rather a wholesome ecosystem where people trust the strong electronic identity forming a part of their everyday consumer’s path of public and private services. I-voting to become the majority participatory channel of elections in Estonia reflects a maturing digital state where people change processes to fit their lifestyle better without compromising the values and principles of a democratic, transparent society.
And, of course, you’re curious about who won. Estonians voted for Prime Minister Kaja Kallas (Reform Party) to remain in power, with 37 seats in parliament secured for the Reform Party. And another undisputable win for Estonian democracy is a record-high number of female representatives. A total of 30 women were elected to Riigikogu, two more than in the previous elections!
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