Time spent working at investment banks gave Husayn Kassai and his partners a close look at what they concluded is a “broken process” for everyone involved, from the institutions providing services to the consumers who are being underserved.
“The precursor to financial exclusion is identity exclusion,” said Kassai, chief executive of Onfido, a London-based identity verification company.
With almost 2 billion people in the world currently financially excluded, he sees finance moving toward a world where consumers can be verified both remotely and robustly. Only then can financial services reach the undeserved, whether they are immigrants, young adults, or citizens of underdeveloped countries.
“The reason why technology can play such a crucial role in in addressing that is that essentially anyone, anywhere in the world — as long as they have access to a smartphone or device with a camera and government-issued identity documents — they are now able to be verified,” Kassai explained on the latest episode of the State of Identity podcast.
For now, fixing that “broken process” remains a challenge — thanks, in part, to existing regulations that were written for a world where identity is verified in person. But Amit Sharma, cofounder of Empowerment Capital, said he has seen hopeful indications that things are changing.
In the U.S., he said, regulators and decision makers have seen the need for financial inclusion and expanded services, at least in a broader sense. Elsewhere in the world, he noted, some markets are a bit more progressive on the issue than others.
“We have seen, I think, a cautious optimism,” Sharma said. “And now you just have to have regulations that help adopt some of these newer technologies.”
In his view, technology will bring in more participants into the financial system, transparently, without compromising key factors for individuals, such as privacy concerns.
Eventually, he, Kassai and others believe that solving the issue of digital identity will not only expand the availability of financial services, but also help make everyone’s life easier. Because the current system, they say, is rather antequated.
“It just seems very out-of-date,” Kassai said, “for you to have to find your utility bill, walk down to High Street, queue up in a branch, and be verified face to face.”
For more, subscribe to the State of Identity podcast, and stay tuned for new episodes published every week.