Biometric enrollment with feature phones to promote financial inclusion in Africa

The potential of biometrics captured on feature phones, the importance of regulatory sandboxes and the need for more flexible identity verification requirements were discussed in detail in the third part of ID4Africa’s four-part Mobile ID4D series, focusing on “Enabling Use Cases”.

The executive chairman of ID4Africa, Dr. Joseph Atick, began the event by repeating his earlier call for governments across the continent to review Tanzania’s and Nigeria’s approach to partnership with MNOs, as explored in the previous live broadcast, and to consider similar policies . This episode has already been played a record number of times on YouTube.

Details were then given of the expanded general meeting in Marrakesh, Morocco in June and how it was adapted to the current circumstances. Plenary sessions on The Identification Arena and The Solutions Forum will be held on June 15th, followed by four workshops on specific topics on June 16th and summary livecasts on June 28th and 30th. The workshops will cover digital public infrastructure and digital stacks, frictionless borders, achieving 100% legal identity by 2030, and ID communication and awareness strategies.

Participants from more than 80 countries are expected to attend the ID4Africa 1022 Annual General Meeting Biometric update will report live on site.

Non-native mobile biometrics on the rise

In the first session, Tech5’s Rahul Parthe and GSMA’s Bart-Jan Pors discussed mobile biometric technology. The capabilities of mobile devices that people already have are critical because, as Pors puts it, “Identity infrastructure can typically be investment-intensive, adoption is complex.”

One of the biggest challenges in leveraging these capabilities lies in the variety of devices on the market, says Parthe. Onboard biometrics often do not meet the necessary standards to serve as a digital identity capture device, but Parthe believes the necessary solutions are already on the market. Enrollment and verification with fingerprint biometrics on cell phones without peripherals is coming soon thanks to contactless fingerprint technologies, he says. Atick points to the major impact this development could have on enrollment campaigns and government procurement for digital IDs.

Parthe presented an overview of contactless fingerprints and explained the US National Institute of Standards and Technology (NIST) NFRaCT tool, which assesses the quality of biometric capture and could eventually be used to certify contactless fingerprints. Tech5’s internal research on 26 devices using the tool showed that “a near-zero error rate can be achieved with a 10-finger swipe, which would be typical of your civil registration system,” Parthe said.

He also revealed that the FBI could start accepting (contactless) fingerprints from mobile devices by the end of the year.

Device diversity and other challenges remain, however.

The GSMA Inclusive Tech Lab, which represents Pors, offers a platform for service providers called “Biometrics for All” or “B4LL”. This helps companies conduct testing of biometric solutions in a secure environment so they can evaluate vendor claims and effectively implement mobile digital identity projects.

Tech5 is also still working on Iris biometrics, Parthe says, and in response to a crowd question, he further noted that the company and the entire industry are working on decentralized and offline authentication to protect user privacy.

Another listener asked how to target people with low literacy skills or low-end devices, which Pors says B4LL is targeting with its tests and resources.

Before the segment ended, Parthe predicted that enrollments using contactless fingerprint biometrics could potentially begin by the end of this year for a large program involving tens of millions of people.

Financial inclusion in detail

Despite the 2017 Findex finding that 69 percent of people worldwide are financially included, up 1.2 billion from 2011, according to Saloni Tandon, MicroSave Consulting, 1.7 billion people are still excluded from financial systems. Hundreds of millions of them are in Africa.

There is great potential for mobile assistance, but much remains to be done to bridge this gap. Tandon identified two common approaches; targeted field teams and self-registration via mobile phone. Mobile technology is not a silver bullet for financial inclusion, Tandon points out, because the supported model does not address the “oral segment” of society, and the self-powered model does not help vulnerable groups for whom access to mobile technology itself is a barrier.

The importance of understanding how to deal with undereducated people, the need to better support grievance processes and repeated use, and the general need for personal human interventions were the key takeaways from the presentation.

Anita Mittal from the World Bank then presented the India Stack and its digital ID system, Aadhaar, as a mechanism for financial inclusion. India’s Jan-Dhan, Aadhaar, Mobile (JAM) strategy helped increase bank account coverage in the country from 53 percent 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 takeaways included the usefulness of using a mobile number as a financial address and the importance of regulatory sandboxes, which were a recurring theme throughout the live broadcast.

The role of the partnership approach in lowering mobile data prices was also mentioned.

“You can’t build identity authorities that don’t talk to cellphone operators anymore,” warns Atick.

Sandy Rheeder of Mukuru Africa, which offers a fintech platform for African consumers, says that for the financially excluded, a digitized financial profile holds more value than a transactional account, which people used to making payments with physical cash often do going a step too far. Essentially, this review again 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 there are no device barriers to get started. Rheeder then recalled biometrics for all parts 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 can’t submit documents through it. Mukuru takes a risk-based approach with low requirements for accounts with a limit of R2,000 per month (about $137). Selfie biometrics are used for the next step, an account with a limit of 25,000 rand. Remittances are particularly important for bringing Africa’s marginalized into financial systems, Rheeder explains, because receiving the remittance is often their first digital transaction.

Sharanya Thakur from Gravity and Priyanka Patel from the Kenya Red Cross Society spoke about their organization’s partnership providing a Self Sovereign Identity (SSI) for the distribution of relief supplies and the use of a “guardian” agency, in this case the Kenya Red Cross, to store and share information when a transaction is initiated by the data subject.

They suggest that this model can reduce duplicate data collection and associated 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 spoke about the need for a more fluid conceptualization of identity, based on layered credentials and data rather than the “snapshot” provided by a static identity. Digital IDs or proxies are becoming more important than bank accounts for financial inclusion as fragmented regulations continue to increase 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 achieving the intended outcome, Cooper warns regulators.

Smile Identity’s Mark Straub, who conducted 12 million identity verifications in Africa last year, advocated a strong framework for public-private partnerships with clearly defined roles.

He argues that while governments are best placed to provide citizens with basic ID, tasks like verification should be left to private providers like Smile, who can use national authorities’ data without collecting it themselves. Atick agreed that this would reduce the amount of challenges and risks taken on by underfunded government departments.

With only 0.3 payment accounts per capita in Africa and not all of them “fully KYC compliant”, any successful model needs to be able to scale quickly like in India.

Gillian Hammah of Databank Group, a Ghana-based investment bank, explained the importance of mobile as almost all of the country’s investment opportunities can be 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 also raises the conundrum of accessibility versus heightened KYC requirements. The channel is limited to 15 seconds per session and cannot be used to upload documents.

Graduated KYC levels are therefore needed, according to Hammah, along with collaborative databases, fee caps for electronic transactions, stronger data protection and cybersecurity.

Atick states that regulations such as KYC are sometimes incompatible with local practice.

Partly because of these challenges and the distance between many people in Ghana and investment institutions, Hammah said a huge amount of money is being moved digitally in Ghana, but not invested.

The next ID4Africa livecast event will be held on April 27th and will be on “Mobile ID in Advanced Economies”.

Article Topics

Africa | biometric registration | Biometrics | contactless | digital identity | Financial Services | ID4Africa | Identity Verification | KYC | mobile biometrics | onboarding | smile identity | TECH5