Aadhaar — Why and how an agent of change!
Having worked around Aadhaar we get this question frequently — Why Aadhaar? To answer that and to understand its potential I’ll first try to picture the evolution of civilization to see why “identity” existed in the first place and then see what value Aadhaar brings in redrawing the picture of ecosystem. You may skip the first part and go to second one directly if you are only interested in Identity and Aadhaar.
Part 1 : Evolution of Civilization (A naive hypothetical story)
Adam was the first person on earth. He lived happily, did whatever he wanted to. He traveled in search of food and also managed to save his life from animals. One day he met Eve. They decided to stay together so that they can fight animals together and forage food with the help of each other. But Adam was little lazy and Eve did most of the work. Slowly she started to complain and they both would argue. One day they met PK who claimed that he came from different planet and that his spaceship had left him behind. All three decided that PK would keep track of everyone’s work and things they borrowed from each other. All would follow what PK would say. They came up with set of rules to settle their disputes. They called the set of rules “Constitution”.
Over time group size increased. Everyday they borrowed so many things and took so many favours from each other that PK started forgetting things. So PK decided to give the magic stones he brought along from his planet to the ones who provided services or lent stuff to others, so they could claim food or service back in future with exchange of magic stones. They called it “Currency”.
Whoever in the group was getting food for all or doing any service and didn’t want anything in return immediately PK started giving them Currency and called it “Salary”.
In the group there were experts who knew how to create Huts and started doing it for others in exchange of currency. PK realized a few people who could not afford a hut die every winter, as they didn’t have any work that suited their expertise in the season. So he decided he would provide minimum stuff (food and hut) to everyone and take some part of their earnings/salary. They named it “Income Tax”.
It was difficult for PK to manage so many people so they collectively elected few more people who can work with PK and they called the group “Government”.
People found different ways of earning currencies, doing business and to avoid misuse of currencies and processes government elected a few people to decide rules for doing business so that resources were not misused and called them “Regulators”.
Everyone was doing various kind of exchanges for example — Promise in return of some service, Real-estate to currency exchange, food to currency exchange etc. To keep track of ownerships of various kinds like Land or Promise, Government asked everyone to come to them and do it in front of Government and Government would keep a record about ownership. If there was any dispute government records written on tree leaves were referred.
It was difficult for government to remember everyone’s name and there were chances that anyone could claim anyone else’s name to take advantage. So Government created a record of birthmarks to name of everyone and called it “Identity”.
Whenever there was a dispute for previous exchanges or incidents of somebody not following Constitution, Government created a group to resolve these disputes by understanding the matter properly and called it “Court”.
Few people started claiming that they were not a part of an exchange happened in past so government asked everyone to write the exchange details on leaf and put their thumb print with flower ink as everybody’s thumbprint was different. Government called that thumbprint “Signature”.
Brick by brick civilization evolved and here we stand on the foundation built since human race started.
Part 2 : Role of identity in day to day life
Exchange generally involves at least one of the below:
1 — Ownership transfer ( Materialistic stuff. Also includes Currency)
2 — Services
3 — Promises
Now let’s take a few examples from our daily lives and see if some kind of exchange is involved :
1 — Buying grocery :
Exchange of physical things (Goods with Currency). Possession is enough to claim the ownership.
2 — Taking a cab :
Exchange of service with Currency.
3 — Paying for toll :
Exchange of service with Currency.
4 — Buying train ticket :
Exchange of service with Currency. Ticket is a medium to claim ownership for availing the service.
5 — Buying electronic stuff with warranty :
Exchange of electronic “item along with service promise” with currency. Promise needs to be recorded for future reference, hence consent of promise provider required (Generally that is seal from the service provider).
6 — Signing a document :
Exchange of promise between the user and legal system ( Liability of the authenticity of content is on user ).
7 — ATM :
Exchange of Currency with Promise (Account balance is a promise to pay from bank)
8 — Opening a bank account :
Exchange of promises (through forms and agreements )
9 — Net banking transaction :
Exchange of Promise (Ownership record).
If it’s not a transfer of physical good where possession of it is sufficient to claim ownership, a 3rd party system is used for maintaining the ownership. Immovable property, Netbanking, Promise exchange (Agreements) are a few examples of that. Promises are recorded in such a way that they can be plugged to the Legal system for defaulter cases (Signing agreements etc) . 3rd parties are independent systems and their framework understand only their own domain specific entities hence they map a human to one virtual entity in their system and call it “Account”. To provide access to account, 3rd party system needs to identify the person rightly every time and for negative cases plugging the virtual entity to the legal system, 3rd party needs to collect enough data about the user and the process is called “KYC (Know your customer)”.
If transaction involves either ownership record transfer or Promise exchange, all we need is platforms to take care of the identity coupled with ability to perform transactions by capturing user intent.
What value Aadhaar brings to the system :
Let’s have a look on what value various APIs on top of Aadhaar bring to the system .
Esign : Platform to enable promise exchange by capturing “intent to authorize digital content” with identity.
UPI : Platform to enable currency ownership exchange by capturing “intent to transact money” with identity.
Consent Layer : Platform to enable promise exchange capturing “intent to authorize someone else for an action” with identity. Other person can perform the action by providing “intent to perform the action” with identity.
eKyc : Platform to enable data exchange by capturing “intent to share user information” with identity.
DigiLocker : Platform to capture promise from government to give authorized digital content to the users.
Aadhaar is a platform to prove your identity and a platform ensuring one user can only enrol once in lifetime. If it’s coupled with the platforms to capture user intent and perform actions, any sort of exchange is possible digitally. Coupling of Bank account to Aadhaar and LPG account is one of the existing examples where ownership of currency is transferred from government to the citizens as subsidy, also middlemen and ghost accounts are removed.
Mapping user Account on a platform to Aadhaar not only opens doors to perform transactions digitally but also for interoperable communications across the ecosystem. Wherever there is “Promise involved in the exchange” it comes with risk as well and “Trust” is calculated by businesses for such transactions. That’s where many lending companies are innovating currently. Think of a system where previous transactions like Payslips, Bank Statements, other property details etc. are available with user consent at one place, how well “Promise exchange” with risk assessment can be done.
Food for thought
Whatever domain we are working in, if we closely see we are dealing with identity in so many ways. Renting, Lending, Attendance systems, Voting systems, Train Flight Movie tickets, Toll gates, e-Wallets, Retailers as ATM are few direct examples of applicable use-cases.
Aadhaar is a platform which connects all the dots we see around and complete eco-system becomes connected, which was distorted earlier. Aadhaar can be the answer to Facebook’s Net-Neutrality argument if every user’s mobile number is mapped with Aadhaar account and per month free data is given to his number. Then finding ways to monetise around this setup.
There are enormous use-cases in-front of us. I believe 5 years down the line picture of India will be totally different and this is the right time to reimagine and recraft everything. We have an empty canvas in-front of us and I hope we use the opportunity well and draw a beautiful picture on it.