Stephen Ufford

Why Financial Inclusion May Well Depend on Cyber ID Data: Digital IDs are quick and cost-effective – but more data on unbanked customers is needed

Until recently, there have been few options to help provide the world’s 2.5 billion unbanked with access to basic financial services. But that has changed dramatically in recent years, with mobile phone use skyrocketing in emerging markets to the point that India will become the world’s second-largest smartphone market by 2016, surpassing the United States and exceeded only by China. With the advent of mobile money service providers like M-Pesa, it’s now easier to open a mobile bank account in Kenya than it is in Kansas.

Thanks to mobile access and the new impetus behind financial inclusion among governments and the development community, encouraging signs of progress are visible in countries around the world. To take just a few examples, India’s latest financial inclusion initiative, the Pradhan Mantri Jan Dhan Yojana, has made great strides with 136.8 million new accounts opened. In the West African country of Côte d’Ivoire, mobile money adoption has truly taken off, with a 240 percent increase in new active customers last year. And in Tanzania, the central bank actually surpassed its original financial inclusion goals and is aiming even higher in its new strategy.

But despite all of these advances, there are still obstacles to be overcome in bringing financial stability and security to the unbanked.

In early March, the Bill and Melinda Gates Foundation highlighted two of these obstacles and challenged financial technology developers to address them: data collection and merchant solutions. The data collection challenge is to develop technology that captures data related to digital financial services, and the merchant solutions challenge is to encourage greater use of mobile payments in emerging markets.

These challenges resonate with me because data provides a person with a digital footprint, which can be used to create an identity – the goal of our work at Trulioo, the global ID verification company I launched in 2011. We are tackling one of the most ambitious challenges in identity verification, aiming to establish a digital ID for the entire global population. Achieving this goal would have a profound impact, particularly on the unbanked, helping us achieve our parallel goal of building greater financial inclusion worldwide.

In spite of its tremendous potential for advancing financial inclusion, digital finance is held back by the lack of a reliable way to verify the identities of those who want to open bank accounts. Nationwide biometric ID initiatives, such as India’s Aadhaar project, provide excellent protection against fraud, but they are very expensive and time-consuming to implement. However, there’s an alternative to biometrics that’s not only more cost-effective, but can also be implemented quickly using existing data.

In a world that’s increasingly digital, more of us are active online, which creates a new way people can be uniquely identified. As we create social media profiles, interact in peer-to-peer marketplaces, and place orders through online stores, we have created a digital footprint that can be used to reliably identify us. This new digital footprint is referred to as cyber ID data (CID).

By fusing both traditional identity data (from credit bureaus, government, utilities and telcos) and CID (from social media login, mobile use, ad networks, ecommerce, etc.) into one solution, our technology will help enable the world’s unbanked to fully participate in the global economy by removing the restrictions placed on them due to a lack of traditional identity documentation.

But to expand their financial access, we need to catalogue more unbanked people’s data. Trulioo currently has about 140 data partners, and we’re seeking to build upon that through programs like our Fuse Developer Fund. This fund provides seed money to encourage independent mobile application developers to build an API around their user data to provide Trulioo with access for ID verification purposes. The types of mobile apps that could participate include everything from horoscope apps to dating and photo apps – and pretty much any mobile app that provides user data that can be used for ID verification, like names, dates of birth, emails, addresses, etc. And the benefits to these participating app developers extend beyond the initial seed money: When Trulioo works with clients to help verify the identities of their customers using CID, part of the proceeds that we collect from that transaction is shared with the app developer whose data was used for the ID verification.

Because we take privacy seriously, we do not store any data nor do we share it with third parties or use it for marketing purposes. We use the data for ID verification purposes only, and the user data remains with the developer, in which the customer has already voluntarily entrusted it. In turn, this data will help power Trulioo’s cyber ID component for online identity verification, particularly in developing countries where traditional proof of identity doesn’t exist, and where CID represents a useful alternative. The ability to verify identities using CID is especially appealing to businesses seeking to expand into these emerging markets.

The fund was created to spearhead efforts to bridge the digital divide by fusing traditional data and CID to increase identity verification coverage in developing markets. By increasing the use of CID for verifying identities of the most challenging demographics, we intend to leverage mobile application user data to provide coverage for more people in more places in conjunction with our existing bank-grade anti-money laundering (AML) and Know Your Customer (KYC) identity verification.

Trulioo’s Fuse Developer Fund provides an excellent opportunity for those who are seeking to generate revenue from their mobile apps to also give back to the global community by furthering financial inclusion worldwide. To find out more about the developer fund, visit

Stephen Ufford is founder and CEO of Trulioo.

digital payments, financial inclusion