IAMIA touts Aadhaar potential, calls on UIDAI to initiate multi-stakeholder consultation
The Aadhaar system could transform India’s financial services industry, including banking, insurance, lending, and payments, by enabling paperless identification, according to a statement by the Internet and Mobile Association of India (IAMIA).
Biometric authentication may be the best way to empower India’s illiterate or semi-literate population, according to the statement, since language differences often make communication challenging.
The IAMIA also says that using a paperless platform could reduce the costs of banking products by two to three percent, and of insurance products by between 20 and 30 percent. Furthermore, by eliminating the need for time and human-resources intensive paper-based KYC or authentication processes, Aadhaar removes a cumbersome burden on start-ups in the industry. The deep penetration of mobile internet services, along with Aadhaar-based eKYC and e-sign will enable hundreds of millions of Indians to access financial services, according to the Association.
Recent analysis shows that paperless applications result in a 300 percent higher conversion into disbursed accounts, the IAMIA says, and the biggest barrier to the financial industry’s potential for tenfold growth is its reliance on legacy paper-based systems.
The IAMIA also acknowledged the legitimacy of some criticisms of the Aadhaar program, with RBI (Reserve Bank of India) mandating paper-based KYC a year after e-KYC based on OTPs. The group called on the UIDAI to initiate a multi-stakeholder consultation to take a collective approach to making improvements.
“The association is keenly aware that there are certain basic problems with the security aspect of Aadhaar. Many social groups have also hinted at possible misuse of Aadhaar data. The UIDAI is cognizant of these facts and have taken certain steps to prima facie address such concerns,” the IAMIA said in the statement.
As previously reported, India’s new chief election commissioner recently suggested that Aadhaar be used for elections, even as the program faces a constitutional challenge in court.