Financial Inclusion: An Industry User’s Perspective on eID · Industry User’s Perspectives on eID Systems • Inclusive: Basic official identity credentials are widely and easily

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Financial Inclusion: An Industry User’s Perspective on eID

Tilman Ehrbeck Partner Omidyar Network November 20, 2015

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Overview

•  The Financial Inclusion use case

•  Desirable eID features from an industry user’s perspective

•  Imagining the ultimate impact (through Financial Inclusion lens)

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Half the world excluded

~60% with

informal jobs

40+% below $2/day

~50% w/out any

social security

coverage

40+% w/out formal

financial account

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100.0

19.4 13.5 12.7

0

20

40

60

80

100

120

Branch Teller POS-Based Cash Merchant

Mobile-Based Cash Merchant

Mobile Wallet

- 87%

Cost reduction potential for financial services Total lifetime channel costs per transaction by channel in US$

4 January 29, 2016

US$ (indexed to 100)

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Concerns about integrity of financial system

Global standards: •  Know Your Customer

(KYC) requirements o  Anti-Money Laundering

(AML) o  Combating Terrorism

Finance (CFT) •  FATF guidance & oversight •  Real risk of o  Country-level sanctions o  Multi-billion dollar

provider fines

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ID layer as foundation for emerging “India Stack”

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Impact of “India Stack”-enabled eKYC Acquisition cost comparison for India online investment provider

0

20

40

60

80

100

120

Paper KYC eKYC + Digital Contract

100

26

US$ (indexed to 100)

- 74%

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Industry User’s Perspectives on eID Systems

•  Inclusive: Basic official identity credentials are widely and easily accessible

•  Foundational: ID as a ‘platform’ for accessing services and opportunities as well as legal rights and entitlements

•  Some degree of integration: Few/one ID program(s) is likely to result in more cost-effective system(s)

•  Proportionate: Different levels of certainty and assurance needed for different types of service

•  Multi-stakeholder collaboration: Federated models pull information from multiple sources across government and third parties without sharing data

•  Standards-based: Credentials are devised to meet standards prescribed by legislative or regulatory frameworks

•  Respect for user privacy and control: Programs allow users to choose and control how their data is used, shared and managed and should understand their rights

ID for all

Versatile & flexible

Needs-driven

Legitimate & regulated

Innovations leveraging e-money infrastructure

Source: CGAP

Water

Energy

Agriculture

Transportation

Health

Microfinance

Insurance

MOBILE MONEY

10