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Prime Minister Yoshihide Suga has made it a priority to push for the digitalization of not only the government but also the private sector in an effort to transform the economy and society. And the digital agency, slated to be launched next year, is expected to be at the vanguard of what is becoming Suga’s key policy as leader.

On Wednesday, the government set up a preparatory office for the creation of the agency with around 50 staff.

“I will make sure that everyone including the elderly and babies will be able to receive the benefits of digitalization,” digital transformation minister Takuya Hirai, who heads the preparatory office as well, told reporters Wednesday.

The coronavirus pandemic has highlighted a need for drastic reform after the protracted and problem-ridden distribution of one-off ¥100,000 handouts to all residents in Japan cost the central government a whopping ¥150 billion.

In the government’s view, a key part of this vision for a digitally transformed Japan will be increased uptake of controversial My Number cards offering an array of expanded services.

What will be the mission of the digital agency?

The new agency is set to play a role as a control tower for digitalizing the government’s administrative work and unifying the IT procurement of ministries and agencies.

It is also tasked with drastically expanding the usage of the government-issued My Number identification cards so that the public can access various government services online without needing to visit their local city hall.

Digital transformation minister Takuya Hirai attends a working session for the launch of the government's digital agency in Tokyo on Sept. 19. | KYODO
Digital transformation minister Takuya Hirai attends a working session for the launch of the government’s digital agency in Tokyo on Sept. 19. | KYODO

“By making various administrative services accessible via smartphone 24 hours a day, 365 days a year, people can spend their time for more productive purposes and improve their quality of life,” which would ultimately contribute to raising gross domestic product, Hirai said.

Suga has said the related legislation for the creation of the agency will be submitted for approval during the ordinary Diet session that begins early next year.

Around 50 bureaucrats from the trade ministry and other ministries and agencies are initially staffing the preparatory office set up under the Cabinet Secretariat, with plans to add about 10 staff from the private sector in the near future.

What is a My Number card?

All residents in Japan including foreign nationals who create a resident certificate for the first time in Japan are issued a unique 12-digit My Number, and can request to have the associated card issued for free to make various administrative services accessible online.

The My Number notification will just confirm the holder’s number, but My Number cards can be used as identification as well. The plastic card, which contains an IC chip, allows administrative organizations to accurately identify each individual and prevent fraud in relation to taxes and social insurance payments.

It can also be used as an online identity authentication for the one-stop administrative service Mynaportal and also allow card holders to acquire official resident certificates at convenience stores, for example.

Expansion of the authentication service to the private sector using the My Number card is in the works, such as for opening a bank account online.

Why does usage of My Number cards remain low?

Since My Number cards began to be issued in January 2016, around 25 million, accounting for about 20 percent of the population, have been issued to date.

One reason behind the low uptake is that the usage of the card is limited, which is why the government is planning to expand this significantly in the future.

Prime Minister Yoshihide Suga attends a meeting in Tokyo on Friday to discuss the use of the My Number personal identification system and the digitalization of administrative work. | KYODO
Prime Minister Yoshihide Suga attends a meeting in Tokyo on Friday to discuss the use of the My Number personal identification system and the digitalization of administrative work. | KYODO

For starters, individual health care insurance card information can be added to the My Number card from next March, and possibly that of a driver’s license at some point in the future.

Another reason is people’s deep-rooted worries over invasions of privacy and the leaking of personal information if a My Number card is lost because they mistakenly believe that the card holds highly private information related to taxes or social security. That raised concerns among the public over what the government could do if it unilaterally controls and collects citizens’ personal information in one place.

The government, however, dismisses such worries and says no private personal information is stored on the IC chip. The government also made sure that no one government office can have access to all of a person’s private information, adding that the decentralized management of personal information at various administrative offices and businesses makes the chance a leak of personal information “extremely low,” Hirai said.

It is also extremely difficult to get the card under an assumed name, and the unlawful use of My Number card, such as receiving pensions or tax refunds using someone else’s identity, would be difficult, as the application procedures would require other identification documents besides the My Number card.

To encourage people to acquire My Number cards, the government launched the Mynapoint incentive program in September, rewarding card users with shopping points if they link their cards with a cashless payment service.

The government has set a goal of more than doubling the cards issued so far by the end of next March and aims to have almost all residents own one by the end of March 2023.

How did the coronavirus pandemic serve as a reminder that Japan is behind other countries in digitalization?

The government’s ¥100,000 payouts to all residents in Japan in the wake of the coronavirus pandemic prompted many to obtain My Number cards and apply for the benefits online.

Digital transformation minister Takuya Hirai attends a working session for the launch of the government's digital agency in Tokyo on Sept. 19. | KYODO
Digital transformation minister Takuya Hirai attends a working session for the launch of the government’s digital agency in Tokyo on Sept. 19. | KYODO

But many rushed to the municipal offices to get the cards only to be told that they had to wait one month to get it, something that jarred in an age when the same-day issuance of credit cards and cash cards has become the norm, Kaori Iwasaki, senior economist at Japan Research Institute, said.

“Originally, online applications using My Number cards would have been a good opportunity to increase public interest in My Number cards, which had been sluggish, and to push up the acquisition rate,” she said in a note.

“In reality, however, problems arose one after another, and in some cases the payment of benefits for online applications took longer than for mail applications. As a result, people saw the My Number system as ‘unusable.’”

To avoid similar problems, the government is considering submitting bills to the Diet to link My Number cards with bank accounts to make prompt payouts possible in the future.

How are people’s lives going to change because of the My Number card?

The government is pledging to make people’s lives easier by combining My Number card with a variety of services in the future.

Logging in to an internet banking website, smooth ticketless entry to a concert hall, evacuation instructions in times of disasters and easy checkups on pensioners through cable TV are all part of the envisioned future usage of the My Number card.

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