Digital Identity: the missing link in Jordan’s financial digitalization journey
By Maha Bahou
CEO of JoPACC
Across the world, Identity is being recognized as a human right. Millions globally are denied access to services because they are unable to provide proof of their identity. Jordan is blessed to have a robust, and ubiquitous national Identification Schema that has largely protected Jordanians from such injustices. That being said, given Jordan’s widespread efforts towards digitalization, the paper-based identification schema has created significant friction for consumers accessing various services where identity authentication is required. Furthermore, during the COVID-19 Crisis, citizens all around Jordan were unable to prove their identities to access essential financial services was it not for the Central Bank of Jordan’s emergency measure to reduce KYC requirements on mobile wallets and allow online registration.
This does not have to be the case. In the age of technology, consumers should be able to prove their true identities without having to leave their homes, which will inevitably ease complex and laborious procedures on citizens, and significantly accelerate the speed of administration of financial relief and measures by the government, in the event of future crises. More importantly, this convenience should not come at the expense of the safety of the financial system.
At JoPACC, we envisage a solution to this predicament, one that guarantees citizens and residents of Jordan their right to identity in the digital world, while increasing the measures in place to protect their sensitive information. The Digital Identity and eKYC (electronic Know Your Customer) project aims for a unified financial identity platform for individuals and businesses, facilitating the ability of financial institutions to digitally obtain KYC information, required by the Central Bank of Jordan (CBJ), and enabling all residents and citizens of Jordan to access financial services remotely and securely through purely digital channels. The eKYC Platform builds on five primary pillars, which denote its core functionalities:
- Financial Digital Identity validation, verification, and authentication:
The platform will enable consumers to establish trusted proof of identity. This identity will comprise both the KYC information required by the CBJ with verification, validation and authentication of individuals’ identity through biometric and ID document authentication. This will be done via integration with the Jordanian Government Service Bus and The Civil Status and Passport Department records.
- Traceability and Immutability of access to identity information:
Due to the sensitivity of the data, all actions undertaken on the platform will be recorded in an immutable manner by leveraging current technologies such as blockchain infrastructure for recording actions and access on the platform.
- Protection of consumer’s data, and consent-driven access:
Access to any personal information will be granted by the owner of that information (the consumer), and will be administered by them through stringent consent management, in compliance with domestic and international regulations and best practices.
- Safe and secure storage of data:
The storage of client information will take place safely and securely, in compliance with any and all Central Bank/ Governmental regulations on the matter, and international security best practices.
- Omnichannel support and interoperability:
The platform aims to increase access to financial services. Therefore, it will be interoperable with different devices/operating systems for omnichannel support. The unified platform should provide standard API integration with the government, data provider entities, non-governmental entities, and the platform participants.
The Digital identity and eKYC platform ensure a single functional financial identity for each consumer in Jordan, eliminating replication of data across institutions once and for all. Not only does this protect the financial system through higher levels of transparency and data consistency, it also simplifies financial services for consumers and facilitates their usage. Furthermore, it enables consumers to keep their information up to date across the entire financial sector through one channel. The benefits of this platform for Jordan transcend the microlevel, where such a platform will improve Jordan’s standing as a safe, and secure financial market. This will have a direct positive impact on Jordan’s global credit and risk assessments, which will position Jordan as an attractive investment hub and will reduce the cost of compliance by financial institutions, which will lead to higher innovation and development across the financial sector. In fact, looking at similar implementations in other countries, the platform can unlock economic value equivalent to 3 to 13 percent of GDP by 2030.
Most importantly, the platform can prove to be especially valuable for the Jordanian Government and humanitarian agencies in a number of ways. This, at its core, is due to the fact that the eKYC platform provides a Functional Identity. This will enable governmental agencies’ better-monitoring capabilities and more prowess in detecting and preventing financial criminal activities. This is especially the case due to the ability to onboard legal entities to the platform, where electronic identity verification for businesses (such as eCommerce providers) can mitigate the risks of fraud and money laundering. The Government stands to benefit from this platform in the execution of government-to-person/business payments with certainty of the true identity of the recipients, as well as serving the Government’s goal of financial inclusion. Given the platform’s scalable nature, other information can also be included in the customer’s identity profile including (health, education, wealth, lands, vehicles, assets, and records, etc…), and can assist in all citizens’ enrollment to eGovernment and conventional governmental services (medical care, educational services…). Furthermore, this platform can pave the way for services such as eVoting, ePolice Portals, Smart Cities, employment services, public transportation services, and many more.
The platform holds the potential of serving various stakeholders in the Jordanian ecosystem. The Jordanian people and businesses, financial institutions, governmental agencies, non-governmental agencies, medical establishments, and many more can stand to reap the benefits of a seamless and secure identity verification. Given that this is supported by an advanced consent-management mechanism for customers sharing their identity, it also extends unparalleled transparency for consumers on the ways in which their identity data is used, and empowers them with the agency to control this. Through this platform, JoPACC aims to connect the full cycle of efforts and initiatives aiming to increase access to financial services in the Jordanian market. Additionally,
it aims to empower individuals and businesses with their right to a universally accepted, secure, and holistic proof of identification that is appropriate for the digital transformation of the world around them.
As financial services join in the global international migration to the digital world, it is of paramount importance to ensure that the problems we faced in the physical world are not part of that migration. In today’s complex world, proof of identification is no longer a bureaucratic procedure or mere paperwork. It is arguably as important as the identity itself. As agents around the world persevere towards eliminating inequalities and injustice, they must keep this important factor in mind. We at JoPACC recognize individuals’ right to identity and are working to ensure the actualization of this right for both citizens and residents of our beloved Jordan.