Digital ID infrastructure will speed up financial inclusion push in Pacific Islands region

For Pacific Islands nations to effectively implement their digital transformation agenda and advance financial inclusion, putting in place the right digital public infrastructure (DPI) is pretty much fundamental.

In an opinion piece, the Head of Oceania for banking messaging network provider Swift, Suresh Rajalingam, posits that to advance digital and financial inclusion among countries of this region, inclusive digital ID is a centrality.

This means the countries in that part of the world must begin to take steps to build foundational identity and digital ID systems, the official says, citing the example of Samoa which is in the process of establishing a digital ID system through a financial inclusion project funded by the World Bank.

The payments professional also argues that with digital identity infrastructure, these nations can establish legal and digital ID systems capable of facilitating access to services especially in the financial sector. This, he says, will help deal with the issue of identity verification which is currently “costly and complex.”

According to Rajalingam, the lack of such identity infrastructure has a negative impact on the economies of these countries beyond just the financial sector. It can affect their international trade participation, he argues, and can also lead to a limitation of economic opportunities.

Given that tacking the lack of inclusive digital identity infrastructure is sufficiently challenging, leading to a debanking crisis which was elaborately discussed during the Pacific Banking Forum in Australia in July, the writer suggests a spirited collaboration not only from countries within the region but from financial institutions and international development partners.

“Enhanced collaboration across the Oceania region, particularly with Australia and New Zealand, can play a pivotal role in advancing digital identity initiatives for the Pacific Islands,” he opines.

He adds that “these countries have strong connections with global financial markets and could support Pacific nations in developing low-risk digital identity systems, essential for increasing their financial inclusion.”

While considering such partnerships and support from committed international partners as an important step, the Swift executive says it is also vital for these nations to invest in building strong digital identity frameworks to help them “connect with the global financial ecosystem.”

Already, a country like Australia is showing that it can play an important role in supporting the development of critical digital identity infrastructure in the Pacific region.

It was reported in July that the Australian government plans to spend $3 million to support Pacific countries in their digital ID development endeavours. The government said at the time that it was part of a plan to counter the debanking crisis in the Pacific.

The funding is meant to “develop digital identity infrastructure and improve compliance with regulations,” as part of the push to build interoperable identity system, facilitate access to banking services and contribute to the fight against money laundering and the improvement of criminal justice.

Article Topics

digital ID  |  digital identity  |  digital public infrastructure  |  financial inclusion  |  Oceania  |  Pacific Islands