Monday March 22, 2021

Digital Identity: Accelerating Financial Inclusion During a Crisis

Person looking at mobile phone smiling, light is reflecting on face in dark room

Since the onset of the COVID-19 pandemic, people around the world have been unable to conduct their affairs in person due to restrictions on movement. In response, governments and the mobile industry have come together to implement policy changes that facilitate wider access to digital financial services.

One of these changes was relaxed Know Your Customer (KYC) requirements for mobile money, which normally requires mobile operators to verify the identity documents (ID) of users face-to-face. KYC (and SIM registration) requirements often act as a barrier for vulnerable populations who lack the required official ID. For millions of people in low-and middle-income countries (LMICs), having a mobile money wallet is their only path to financial inclusion and for receiving life-saving benefits.

Across five countries, the GSMA Digital Identity Programme conducted research to better understand:

  • ID-linked KYC policy changes in response to COVID-19 and how they occurred;
  • the impact of such changes on individuals and financial inclusion;
  • the impact of such changes on public and private sector organisations; and
  • what opportunities these policy changes offer for the future

The research involved interviews with 56 subject matter experts from 31 public and private sector organisations in Colombia, Ghana, Jordan, Pakistan and Senegal.

Based on the research there are some major takeaways for both mobile operators and governments. These are the:

  • Importance of stakeholder collaboration;
  • Push to make some policy changes permanent;
  • Need for a comprehensive identity database; and
  • Significance of digital financial services in digital transformation

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