It may seem like digital identity is only really starting to blossom recently in the developed world, as consumers grow increasingly wary of their online transactions, with each passing headline on cybercrime. As people in those developed markets start to take greater precautions – and solutions allowing individuals and enterprise to prove who they are online start to scale – it can feel like a welcome change, but a recent one. Surely, one might think, that process is some time off in the developing world? Can the market for these technologies possibly be there?
Our seminar in Barcelona last month on The Future of Digital Identity explored this issue, among others: how operators can bring what is already enabling swift development in eCommerce and smart public services elsewhere to the developing world. As is so often the case in life, the reality is rather more subtle than a cursory thought might suggest – in fact, developing markets are just the place to seed such initiatives.
As Jean Philbert, CEO of Idex Africa pointed out, Africa is not only the continental market at the earliest stage in telecoms – it’s also the fastest-growing. “This industry has a remarkable opportunity to help unit the continent’s currently fragmented market of $3.5 trillion – there is business to be done in Africa, and we are ready to collaborate.” Operators can achieve social good here, in ways that make good business sense. “Identity is about much more than birth registrations and national ID when it comes to emerging markets,” explained the GSMA’s Market Development Director Sham Careem. “These are essential elements, but there are many more layers with which to build here which can deliver both real and lasting value to consumers in emerging markets, and sustainable commercial models for mobile network operators.”
There are in fact specific areas of challenge which make developing markets especially fertile soils for commercial investment in digital identity. Stacy Stubblefield, Co-Founder of TeleSign, set out quite what the problem looks like. “Web and app companies have a hard time knowing much about people they’re trying to bring on board, because the kind of questions you ask them can be easily faked – you can’t even verify their IP address. And this is most true in emerging markets – ride sharing, food delivery, businesses like these are taking real risks in these markets and it can be difficult to get going for that reason.”
Operators have that certainty about who their customers are that other players generally lack – having required them to identify themselves on opening their accounts, and being able to assess attributes like location, account type and financial history. They are therefore the natural gatekeepers of digital identity where other sectors who lack KYC need assistance. “Mobile network operators are the obvious choice to verify data,” declared Ms Stubblefield. “They give banks a run for their money! Access to operator attributes makes all the difference – frankly, that’s what we need.”
And where this does happen, the potential for positive change is genuinely enormous. “Part of me feels we spend too much time on what could go wrong in these markets,” reflected Steve Polsky, CEO of Juvo. “Money being laundered, identities stolen, companies going bust. I’d like to focus on what could go right – think of the power we could unleash if a whole new chunk of the world’s population could be equipped with viable identities to give them access to the services that already improve our lives.”
The gains to be made here are not only to the individual lives made easier, more enjoyable or indeed longer by the ability to verify identity with confidence. The countries they live in, and the world as a whole, could see enormous benefits were users in emerging markets not held back in this way. “Four out of every five people live in a pre-paid world, because the information on who they are is missing or incomplete,” pointed out Mr Polsky. Where people can prove who they are quickly and easily, they become far less of a risk in all manner of economic considerations, and with that is unlocked all manner of routes to bettering their condition and those of their communities.
When you no longer need to pay upfront for every service you use, and every order you make, you’re no longer kept on the ground by the ready cash you have – and that means your own business initiatives can be developed, which might otherwise have remained a dream. “The wind is at all of our backs if this can be done, and it can be done through smartphones,” explained Mr Polsky; “once we can get people a solid digital identity, they can move upstream to all kinds of digital capabilities – as an industry that means we can create whole new ecosystems, and beyond that we unlock the economic power of hundreds of millions of people.”
To do that, people in developing economies need not only to be able to nurture their entrepreneurial potential directly, through things like financial agility – they need to navigate the infrastructure of society in ways many of us take for granted. As Mr. Philbert explained, lack of reliable identity in much of Africa hampers all manner of social services – in education, healthcare and more, if you can’t target interventions according to knowledge of the people you’re trying to help, it’s hard to make much progress.
“All of this now depends on people being connected,” Mr Philbert told the room. “In fact Africans often have a harder time identifying themselves in their own countries than do their international visitors. I’ve been speaking to young people recently who have had to contend for months with the corruption of officials just to get a passport – delays of this kind deny all kinds of economic opportunities to them.” By contrast Mr Philbert himself was, through digital identity, recently able to renew his Rwandan passport in exactly 120 seconds.
The seminar last month was heartening, with too many examples of how digital identity can improve lives to consider here. Juvo’s Steve Polksy encapsulated the panel’s key takeaway in his concluding remarks: “don’t think of digital identity as just a value-adder or one-off service – by doing this you’re helping your core business. There are additional revenue streams, but by helping people move on upstream economically, you’re adding huge value to the relationship with you over its lifetime, and that’s hugely profitable for operators.” To know that the value added here is shared across all parties is truly gratifying, and we very much look forward to seeing it progress in the years ahead.