Refugees receiving their UNHCR financial assistance using an iris-enabled ATM. Photo courtesy of Cairo Amman Bank.
2018-06-23

Financial inclusion of Forcibly Displaced Persons (FDPs): What is the role of FinTech?

Community empowerment, blockchain and financial inclusion: The Rohingya Project approach

By Muhammad Noor, Managing Director & Founder, The Rohingya Project 

The Rohingya are a stateless people.  Being stateless means lacking the basic elements of identity.  These include a passport to travel, or a national identity card to open a bank account. They also include a birth certificate to prove that your son or daughter is actually your son or daughter. The vast majority of Rohingya lack these instruments of identification. Simple tasks become arduously difficult, and yet this is the reality for nearly three million of Rohingya.

The Rohingya Project is targeting a central issue the Rohingya diaspora face as a result of statelessness: financial exclusion. Many second and third generation stateless Rohingya live a shadow existence in their host societies and encounter significant obstacles in generating a livelihood and keeping themselves out of poverty. The goal of the Project is to create the foundation for a viable economic future for the Rohingya and connect them to opportunities to learn, equip and empower themselves. The Project seeks to bring the Rohingya inside of the exploitative ‘dark economy’ where they currently reside - lacking credit history, job access or fair wages - into the mainstream economy of today and the digital economy of the future.

The Project takes a multi-pronged approach to tackling financial exclusion. The first approach, in cooperation with our FinTech partner Ata Plus Sdn Bhd, is through the creation of a secure and international Waqf-based ecosystem, to offer those Rohingya who for years have been sidelined, a range of financial applications and other services to encourage collaboration, innovation and entrepreneurship. Among the applications include apps to allow Rohingya to create their own personalized profiles and open themselves to freelance opportunities across borders, to manage projects and crowdsource the funds to build these projects, and other apps for resources and consensus-building across the diaspora.

A second important approach is through a regular series of training and capacity-building programs offered to Rohingya, in particular to Rohingya youth, through our dedicated Rohingya Training Center. These programs focus on vocational, management, accounting and digital skills to ensure that our Rohingya have the tools to develop their own career profiles.  Another critical part of tackling exclusion is through financial representation. Rohingya lack institutions that represent their collective interests, especially on the economic front. Having a viable community-led project interact hand in hand with financial institutions and government actors can greatly assist the process of financial integration of Rohingya into host economies, and open access to them to both the labor market and credit.

Since our launch last December, we have achieved a number of milestones and partnerships to lead to the realization of our vision. We have officially partnered with Pro-Civis, a Swiss e-government service to look towards the design and execution of the Blockchain-ID and registration system for the pilot phase of our project estimated in early 2019. The Rohingya Project has also engaged in an applied research partnership with the Henry M. Jackson School of International Studies at the University of Washington, USA to produce a soon-to-be-published feasibility study exploring the implications for our project within the international legal and financial framework. Along with this, the Rohingya Project continues to collaborate with international agencies, such as recently with the UNHCR by conducting a financial survey of stateless Rohingya based in Malaysia.

We realize that this is a huge undertaking. Beyond our own organizational capacity, it will require the resources and coordination of many stakeholders in the international community to accomplish what we are setting out to do.

Taqanu: Global financial and social inclusion through self-sovereign identity

By Balázs Némethi, CEO of Taqanu and Digital ID Advisor for the WEF

Today, technological advancements such as automation, artificial intelligence, and transparency-preserving technologies like blockchain make it easy to set up a very low-cost platform for new customers such as refugees. However, it is important to note that service delivery problems such as the financial illiteracy of the target group, is still likely to cause hurdles for most new and established businesses since they must balance profit-making objectives (e.g. calculate run rates), with targeting a very under or unserved segment of the population. However, bold and sometimes under-regulated services tend to be able to solve problems at a societal level or are easily scalable, rather than only offer siloed solutions that aim at just a fraction of the population. Potential lies in digital identity for its ability to empower users by providing them with sovereignty, while boosting the opportunity for businesses through significantly lowering their costs of customer acquisition and of compliance with KYC requirements.

Taqanu is a globally accessible, secure and self-owned blockchain-based digital identity platform. It runs alongside a railed attestation network called the Abacus Fabric. The Public Ledger reliably keeps track of all secure identity transactions to prove identities and to ensure trust.  Currently, the platform stands at the lowest level in any technology stack, underpinning an ecosystem of services and offering a decentralized privacy-first scalable identity infrastructure with a baked-in consent mechanism. We concluded that infrastructure services that are available on the market today, can only partially fulfil our collectively predetermined requirements on how an identity system should interact with services built along and on top of it.

Making our decision to establish a new system architecture was as simple as the realization of the system’s simplicity, and this is compelling for most of the parties we are engaging with already. The goal of Taqanu is to enable any organization working with digital identity, to have a tool that is implementable with just a few lines of code and to create an entirely privacy conscious, interoperable, and secured identity service.  This subsequently enables the organisation to then focus on their service offering.  Building services that are designed to link together established systems that are already siloed systems in the first place, is crucial in moving forward to develop new business cases towards serving everyone with financial services, including the forcibly displaced. 

Such systems can level trust and enable high levels of automation, and consequently, cost reduction. The reduced cost of operation and the heightened trust frameworks can enable businesses to target less valuable market segments while keeping Return on Investment (ROI) according to their pre-set standards. Such identity not only benefits businesses but also empowers customers to have consent over their own identity and what is happening to it over time.  Taqanu’s approach is aligned with that of AFI’s in that we seek to bring together different stakeholders to facilitate change.  We offer an open-source (free) technology of our mission-critical identity infrastructure, consequently enabling the actors utilizing it to create interoperability across different service providers without the need for special interoperability consortiums to be established.

How IrisGuard is changing the face of refugee financial inclusion

By IrisGuard

When a family is forcibly displaced from their home, they become physically, emotionally and financially vulnerable.  With the likelihood of remaining in their host country for a number of years, receiving assistance to pay rent or for food becomes a vital lifeline and of utmost importance – one that enables displaced families to lead as normal a life as possible under difficult circumstances.

But providing financial assistance to refugees is fraught with difficulty, as most flee their homes without any form of identification, rendering them identity-less on arrival in their host country.  With the EyeBank® pioneering technology that IrisGuard has developed, the United Nations High Commissioner for Refugees (UNHCR) staff registers the refugee with an iris camera, which only takes few seconds.  Capturing someone’s iris means they are being registered using their most accurate biometric, as a single iris contains more identification information than ten fingerprints combined - and is widely renowned as the most reliable and trusted form of human identity.

The UNHCR registers the entire family on arrival (except for children under 18 months old) and provides them with a trusted unique verifiable digital identity and a dignified method of receiving financial assistance, using uniquely their eyes to withdraw cash at unattended iris-enabled ATM machines or purchase essential food items at iris-enabled retail Point of Sale (POS) check-out counters with the World Food Programme (WFP).  It is guaranteed to be fault-free, so identities cannot be stolen, lost or traded as with a traditional card-based system.  Most importantly, it provides dignity to the refugee families as there is no aid queue, no stigma, and although they are unbanked they can now avail of the same banking services as customers with a bank account, just with their iris instead of the normal bank card and PIN number.

Iris recognition has the ability to empower financial inclusion in more ways than just cash or food assistance.  Refugee remittances from family or friends in other countries can be empowered using this method, as it allows the recipient to be accurately identified, and funds to be passed on even though they are outside the traditional banking system.  And for refugees who want to start their own business, the technology has the ability to facilitate microfinance by creating credit ratings, allowing the opportunity for the unbanked individual to borrow money and become financially independent.

However, the benefits of IrisGuard’s EyeBank© technology are not just limited to the beneficiary.  For international donors, the knowledge that their funds are guaranteed with pinpoint accuracy to reach the intended beneficiary builds trust in the aid system, and can eliminate the negative phenomenon of donor fatigue.  IrisGuard’s operations have shown that prior to installation of their platforms, as much as 20% of transactions have been made to “ghost” recipients, so with the iris recognition system in place, donor funds are stretched further and can therefore assist more needy families.

There are also benefits to the host countries.  Where EyeBank© ATMs and retail POS systems are in place, this is money flowing into the local economy, benefitting both businesses and communities.  IrisGuard systems bridge the gap between donors and beneficiaries, a private sector organisation that is a trusted partner of the UNHCR and WFP, enabling them and their donors to empower the financial inclusion of vulnerable refugees.  This trend of the private sector developing technology to empower the vulnerable is likely to continue, and with the future looking increasingly mobile, IrisGuard’s next development is the world’s first iris-enabled global financial authentication and authorisation system.