Biometrics capture with feature phones to boost Africa’s financial inclusion
The potential of biometrics captured on feature phones, the importance of regulatory sandboxes, and the need for more flexible identity verification requirements were discussed at length in the third part of ID4Africa’s four-part Mobile ID4D series focused on ‘Enabling Use-Cases.’
ID4Africa Executive Chairman Dr. Joseph Atick began the event by reiterating his previous call for governments across the continent to examine the approach of Tanzania and Nigeria to partnership with MNOs, as examined in the previous livecast, and consider similar policies. That episode, he noted, has already been replayed a record number of times in YouTube.
Detail about the augmented general meeting in Marrakesh, Morocco in June and how it has been adapted for present circumstances were then shared. Plenary sessions on ‘The Identification Arena’ and ‘The Solutions Forum’ will be held on June 15, with four workshops covering specific topics following on June 16, and summation livecasts held June 28 and 30. The workshops will address digital public infrastructure and digital stacks, frictionless borders, achieving 100 percent legal identity by 2030, and ID communications and awareness strategies.
Attendees are expected from more than 80 countries for the ID4Africa 1022 General Meeting, and Biometric Update will provide live on-location coverage.
Non-native mobile biometrics on the rise
The first session featured Rahul Parthe of Tech5 and Bart-Jan Pors of GSMA on mobile biometric technology. The capabilities of mobile devices people already have are critical, because as Pors puts it, “identity Infrastructure can typically be investment heavy, roll out is complex.”
One of the main challenges to utilizing those capabilities is from the variety of devices on the market, Parthe says. Onboard biometrics often do not meet the necessary standards to serve as capture devices for digital identity, but Parthe believes the necessary solutions are already in the market. Enrollment and verification with fingerprint biometrics on mobile phones without peripherals are coming soon, thanks to contactless fingerprinting technologies, he says. Atick points out the major impact this development could have on enrollment campaigns and government procurements for digital ID.
Parthe presented an overview of contactless fingerprints, and explained the U.S. National Institute of Standards and Technology’s (NIST’s) NFRaCT tool, which evaluates biometric capture quality and could eventually be used in certification for contactless fingerprints. Using the tool, Tech5’s internal investigations on 26 devices showed “near-zero error rates can be achieved using a ten-finger capture which would be typical for your civil registration system,” Parthe said.
He also revealed that the FBI may start accepting (contactless) fingerprints from mobile devices by the end of the year.
The diversity of devices and other challenges remain, however.
The GSMA Inclusive Tech Lab, which Pors represents, offers a platform for service providers called ‘Biometrics for All’ or ‘B4LL.’ This helps organizations perform tests of biometric solutions in safe environment so they can evaluate vendors’ claims and implement mobile digital identity projects effectively.
Tech5 is also still working on iris biometrics, Parthe says, and in response to an audience question he further noted that the company and the broader industry are working on decentralized and offline authentication to protect user’s data privacy.
Another audience member asked how to engage people with low literacy levels or lower-end devices, each of which Pors says B4LL addresses with its testing and resources.
Before the segment ended, Parthe predicted that enrollments with contactless fingerprint biometrics could begin possibly by the end of this year for a large program involving tens of millions of people.
Financial inclusion deep dive
Despite the 2017 Findex finding that 69 percent of people globally are financially included, 1.2 billion more than in 2011, 1.7 billion people are still excluded from financial systems, according to Saloni Tandon, MicroSave Consulting. Hundreds of millions of them are in Africa.
There is high potential for mobile to help, but much still to be done to address that gap. Tandon identified two common approaches; targeted field teams and self-enrollment through mobile. Mobile technology is no silver bullet for financial inclusion, Tandon emphasizes, as the assisted model does not address society’s ‘oral segment,’ and the self-operated does not help more vulnerable groups, for whom access to mobile technology is itself a barrier.
The importance of understanding how to engage with under-educated people, the need to better support grievance processes and repeated usage, and the overall need for personal human interventions were key take-aways from the presentation.
Anita Mittal of the World Bank then presented the India stack and its Aadhaar digital ID system as a financial inclusion mechanism. India’s Jan-Dhan, Aadhaar, Mobile (JAM) strategy helped to increase the coverage of bank accounts in the country from 53 to 80 percent from 2014 to 2017, and mobile payments are doubling every year.
In this system, mobile Aadhaar is used for KYC, QR codes for offline authentication.
Key take-aways included the utility of using a mobile phone number as a financial address, and the importance of regulatory sandboxes, which was a recurring theme throughout the livecast.
The role of the partnership approach in reducing mobile data prices was also noted.
“You cannot build identity authorities who don’t talk to mobile network operators anymore,” Atick warns.
Sandy Rheeder of Mukuru Africa, which offers a fintech platform for African consumers, says that for the financial excluded, a digitized financial profile has more value than a transaction account, which is often a step too far for people used to making payments with physical cash. This assessment essentially re-emphasizes the prioritization of digital identity over payment mechanisms or bank accounts. This, in turn, requires effective onboarding.
Mukuru uses USSD as an onboarding channel, as it poses no device barriers to entry. Rheeder then called back to the biometrics for all portion of the discussion from earlier, saying: “In Sub-Saharan Africa that’s really what we need.”
USSD, she explains, is a great channel, but people cannot submit documents through it. Mukuru takes a risk-based approach, with low requirements for accounts with a 2,000 rand a month (roughly US$137) limit. Selfie biometrics are used for the next step up, an account with a 25,000 Rand limit. Remittances are particularly important for bringing Africa’s excluded into financial systems, Rheeder explains, because receipt of remittance is often their first digital transaction.
Sharanya Thakur of Gravity and Priyanka Patel of the Kenyan Red Cross Society discussed their organization’s partnership providing self-sovereign identity (SSI) for relief distribution, and the use of a ‘Guardian’ agency, Kenya Red Cross in this case, to store and share information when a transaction is initiated by the data subject.
This model, they suggest, can cut down on duplicate data collections and the attendant privacy and security concerns, while making digital ID a source of dignity for users, rather than forcing them to cede control.
Cenfri’s Barry Cooper talked about the need for a more fluid conceptualization of identity, based on layered credentials and data, rather than the “snapshot” provided by static identity. Digital IDs or proxies are becoming more important than bank accounts for financial inclusion, he says, as fragmented regulations continually raise the barriers to participation.
Anti-money laundering (AML) systems that mitigate compliance risk but not money laundering itself will cause significant harm to people’s lives without delivering the intended result, Cooper cautions regulators.
Mark Straub of Smile Identity, which performed 12 million identity verification last year in Africa, argued for a strong framework for public-private partnerships, with clearly defined roles.
He argues that while governments are best-positioned to provide foundational ID to citizens, tasks like verification should be left to private sector providers like Smile, which can make use of the data held by national authorities without collecting it themselves. Atick agreed that this would reduce the amount of challenge and risk taken on by under-resourced government departments.
With only 0.3 payment accounts per capita in Africa, and not all of those “fully-KYC’d,” any successful model must be able to scale rapidly, as in India.
Gillian Hammah of Databank Group, a Ghana-based investment bank, explained the importance of mobile in terms of almost all of the country’s investment opportunities being found in just two regions.
With 88 percent of digital transactions made through USSD in 2021, the institution shows the potential of the feature phone-friendly channel, but it also raises the conundrum of accessibility versus increased KYC requirements. The channel is restricted to 15 seconds per session and cannot be used upload documents.
Graduated KYC levels are therefore needed, along with collaborative databases, fee caps for electronic transactions, stronger data protection and cybersecurity, according to Hammah.
Atick states that regulations like KYC are sometimes not compatible with the practical situation on the ground.
In part because of these challenges and the distance between many people in Ghana and investment institutions, a huge amount of money is moving digitally in Ghana, Hammah says, but not invested.
The next ID4Africa livecast event will be held on April 27, and examine ‘Mobile ID in Advanced Economies.’
Africa | biometric enrollment | biometrics | contactless | digital identity | financial inclusion | financial services | ID4Africa | identity verification | KYC | mobile biometrics | onboarding | Smile Identity | TECH5