Unlocking the unbanked cyber id

By Stephen Ufford, CEO

Imagine living a life without any digital or financial footprint. Your bank account? Gone. Your credit history? You never had one. What if you disappeared tomorrow? Nobody beyond your immediate network would know. Your life history would vanish with you.

If you’re reading this article, the thought of existing without any footprint is unfathomable – but for billions of people around the world, it’s an everyday reality.

Imagine the woman in Africa who walks four miles a day to pay her electricity bill – or the recent American immigrant who works two jobs to make ends meet for his family. Although these individuals would be deemed “trustworthy” in most people’s eyes, companies that make risk assessments based on today’s footprint are unable to transact with them. This is because they live in a physical cash economy, where value is stored and transferred through tangible assets, such as cash, jewelry or livestock. Transactions made in a physical cash economy leave no digital record of their financial history, which prevents companies from serving this customer segment.

The Federal Deposit Insurance Corporation (FDIC) estimates that nearly one-third of the United States population – 106 million people – is either unbanked or underbanked. Of these individuals, it’s estimated that 25 million don’t have a credit score.

Cyber ID data (CID) provides a digital footprint from sources, such as social networks, ad networks, mobile and ecommerce sites, which can be used to address the very basic question, “Is this person who he claims to be?”

CID has the power to radically impact financial access for unbanked citizens. For instance, in China – which relies on alternative social networks to Twitter, Facebook and YouTube – there is a strong link between social media and how people use their money. Social media plays a significant role in Chinese commercial life, with peer recommendations driving purchases of products and services.  As Leesa Schrader, consultant at the Consultative Group to Assist the Poor, points out, applications and services that connect social data with payments are growing at a significant pace, albeit under rigid state controls.

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