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Social protection lessons: Indian interoperability, opportunities for private sector

Social protection lessons: Indian interoperability, opportunities for private sector

India sees an interoperable future for its economy and African countries could benefit from separating population registers and social protection registers and finding new levers to entice people to enrol for national ID, according to experts in their fields.

The interplay and potential synergies between identity registers or decentralized ID and social protection schemes were explored by speakers from development agencies, identity platform providers and international organizations at the Digital Convergence Initiative (DCI) workshop: ‘Interoperability in Action – ID.’

The DCI, led by a steering committee of the International Labour Organization, Germany’s GIZ and the World Bank aims to bring the standards needed for a digital approach to meeting the universal social protection (USP) goals.

These United Nations goals are being championed by the USP2030 movement whose manifesto is: “It has never been more urgent to deliver on the promise of the Sustainable Development Goals, especially target 1.3, to implement national social protection systems for all, starting from a solid floor of basic social protection guarantees.”

India goes from centralized strength to interoperable strength

“No country should have just one ID system,” said Dr. Pramod Varma, chief architect at India’s national ID, Aadhaar, and India Stack, as well as co-founder of interoperable protocol builder, Beckn.

There should be a foundational ID and then functional IDs issued on top. Then other schemes can follow. He used India’s Unified Payments Interface (UPI) as an example.

“Payment was all about interoperability; it was not about launching a mobile app, it was not about launching an internet banking portal, it was about defining what that protocol ought to be so that the ecosystem – the banking ecosystem, mobile wallet ecosystem, fintech ecosystem – all can come together to create innovation on top of that interoperability layer.”

Around 860 million individuals in India have ID-linked bank accounts of which 470 million were opened in the last 8 years. In 2008, only 17 percent had bank accounts. State and federal level social protection schemes linked with the systems have created what Varma called the world’s largest direct benefits network.

Last month, the UPI saw 8 billion transactions and the platform is going international. With biometrics captured for identity registration, users without smartphones or any phone at all can access government services, welfare and banking at local shops and money agents without traveling to towns.

DigiLocker, the India Stack digital wallet, has reached 140 million users and contains 5.6 billion verifiable certificates and credentials. Varma sees verifiable credentials as a way for individuals to keep control of their data and be empowered to share it how they want.

Varma argues not for government-led identity systems with government-issued apps, nor the other extreme of fully private identity products which can lead to walled gardens and monopolies. The sweet spot is a base layer of government and regulators, with and interoperable layer of digital public infrastructure (DPI) on top (APIs, protocols, shared platforms, open networks), then diverse applications and market innovation on top for end-user products.

This interoperable approach, as links dozens of banks via the UPI, has been used for creating an interoperable decentralized commerce network that Varma claims as a world first. For example, farmers can use it to discover the price of goods to ensure they get the best price.

Organizations such as the Open Network for Digital Commerce and Beckn, with its tools to build decentralized networks, are helping India and could help other countries pursue interoperable ecosystems rather than rely solely on government or private sector.

Practicalities and private potential for social protection in Africa

Social protection schemes could be a growth area for private identity providers in Africa, says Dr. Joseph Atick, executive chair of ID4Africa. Social protection and ID schemes could help each other achieve fuller participation, through a sort of symbiosis, said Atick. African countries should avoid using home-grown systems as they can lead to lock-in.

Across Africa there have been successful mass campaigns encouraging people to register for national ID. Supply-side tactics have been used, by making the ID compulsory for various aspects of life such as SIM activation and registration or to access government services or acquire other credentials.

Registration rates are now dropping as national population registers (NPRs) almost cover the population.

“The reason that they reach saturation is that these services have limited ability to attract the most excluded segment of the population that remains outside the NPRs,” says Atick, explaining these groups tend to be poor and rural.

Campaigns to reach the remaining unregistered tend only to reach those already signed up and so ID authorities are becoming more open to initiatives that motivate and entice people to register: demand-side methods.

People have “shown tremendous appetite” for universal health coverage “if the offer is credible,” says Atick, referring to The Gambia in late 2022 and Morocco now.

Social protection and welfare is now an important way to keep ID registrations coming. KYC continues to be the number one driver for ID in Africa, now followed by health and social protection, says the chair.

This is leading to synergies between ID and SP: “ID needs SP to complete its NPRs, SP needs ID for benefit delivery and management.”

There are issues to be addressed: “Foundational ID systems in Africa suffer from structural weaknesses that render them less attractive or less fit for SP programs today.”

The fact foundational identity schemes have not reached total coverage, especially in the areas most likely to need social protection, is hindering ID’s benefits to social protection. ID systems have generally focussed on registering adults and not children, although this is changing.

“SP needs social registers not population registers. While social registers are built on population registers or seeded with unique foundational identifiers, the gap between them is big,” says Atick, noting that much of the investment for welfare goes into beneficiary management rather than ID.

He says that Morocco is building its NPR as a social registry, grouping individuals into households. There needs to be greater twinning of SP and ID, says Atick.

Social protection authorities should be equipped and certified by ID authorities to act as registrars for national ID, able to register a person on the spot: “SP authorities must become registrars.”

Benefit system staff would operate any software within the ID system or links to SP, such as MOSIP. The social protection service must also have KYC functions with a service level agreement for verifying individuals. Here is where a divergence with the ideas of other parties in the workshop, such as GIZ, emerges.

“I believe SP should maintain its own identity authentication engines for SP transactions and not rely on the centralized identity authority each time the beneficiary needs to be authenticated,” said Atick.

“I’m very nervous about centralized authentication engines across all segments” as potentially detrimental to scalability and privacy. “Centralization worked very well in India, but even India is moving away from centralization.”

A separate identity authentication system for social protection would reduce demands on the centralized national ID. Any identity verification used should be easy and proportional. Whether systems use iris or fingerprint biometrics, 2FA or OTP, “all of those should be innovations that private sector should be contributing to and allowing the social protection authorities to embrace.”

Atick says he is excited about social protection systems using verifiable credentials to keep themselves decentralized as individuals can use the VCs to reidentify themselves without having to go through the national ID system again. He encourages countries to create household and social registers. “We need to avoid getting into homegrown MIS [Management Information System] that does that [create social registers] and in many cases where I’ve been involved, I’ve seen the lock-in happening as soon as you launch this program because the person who did it is the only one who’s able to make these modifications.”

A data sharing interface between SP and ID and it compatible with what people find acceptable will allow systems to be updated (XRoad was suggested), but welfare beneficiaries should be able to update their status at the SP system.

The next ID4Africa Livecast on 22 March is dedicated to social protection issues.

MOSIP on standards and voice biometrics

The Modular Open Source Identity Platform is working on ways to make registration into its platform as quick as possible, but keeping it open and interoperable. The Bangalore-based organisation is working with IEEE to publish an international standard on this (B3167), says Sasikumar Ganesan, head of Engineering at MOSIP. Anyone wanting to be involved in this should get in touch.

The team is also working on biometric templates. Ganesan says they want to move beyond face and finger biometrics to improve interoperability. The group is also working on cross-border verification and developing their Inji digital wallet as a tool for anyone to adopt.

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