Why Identity Matters: The Road to Financial Inclusion
As the world becomes an increasingly digital place, identity has become more critical than ever. Identity is the gateway to financial inclusion, whether it’s needed to open a bank account, participate in token sales, or send and receive money. The world now favors streamlined payment options where a digital or non-digital ID is a prerequisite.
Read along to find out how identity enables you to become a part of the financial mainstream, and how digital IDs can pave the way for the nearly two billion unbanked individuals around the world to merge with the global economy.
The First Step: Identification
The road begins once your identity is established. Ask any regulator that works with financial institutions and they will tell you that a government-issued ID is a primary requirement before you can enroll in any financial platform.
IDs are not only about opening a bank account. These small documents have a life-changing ability, and not having one will push you to the fringes of society. If you’re seeking work, employers routinely require some form of government-issued identification. When traveling domestically or internationally, a passport or driver’s license is necessary.
Government benefits and programs such as education, social security, and welfare all rely on an individual’s identity. These crucial programs are lifeboats for many, and those without a form of ID are unable to apply.
IDs are a foundational aspect in society around the world, and this is why it’s incredibly difficult to live a prosperous life without one.
Linking Your Digital Self to Mobile Financial Services
Convenience and mobility are the principal advantages of today’s financial services. An estimated 2.5 billion people own smartphones, so it’s no wonder why the vast majority of financial services have integrated apps to their platforms.
In today’s app-based society, linking your debit or credit card to your phone’s built-in wallet has become standardized. As many key factors of our daily lives are integrated into our phones, we further exclude those without access. Just like financial services, most mobile phone providers require identification to utilize their services.
Retailers are increasingly adopting new technology that facilitates rapid transactions, such as near field communication integrated on point-of-sale devices. NFC allows users to merely hold their phone or card up to the device scanner, thus increasing the flow of payments.
Linking financial services to app-based applications also empowers individuals to make purchases online. This mobility has utterly altered the landscape of commerce by transitioning to e-commerce.
Through this modernization of financial services, a significant portion of the population is being left behind because they don’t have the requirements to participate. This technological shift is disproportionately shutting out those without IDs and smartphones.
The world is open to those who can participate in the financial mainstream, but what about those who cannot?
Banking the Unbanked Through Digital IDs
According to the World Bank, over one billion people live without a form of identification. This number alone accounts for half of the two billion unbanked individuals. Since financial inclusion begins with IDs, there must be a focused approach to global efforts in providing new identity solutions.
Digital IDs are seen as the revolutionary stepping stone to transform the lives of countless individuals. Through these initiatives, vulnerable groups will regain their human rights by being included in services that the majority of people take for granted.
Financial inclusion of the unbanked will significantly help the global economy by reducing black market transactions and illegal labor practices. It’s forecasted that banking the unbanked could lead to a $600 billion rise in the worldwide economy per year. This is a significant increase that not only results in the prosperity of the lives of those who were previously unbanked but the world as a whole.
The majority of these unidentified individuals are forced to take labor positions that are both illegal and dangerous. Since society has pushed them to the very edge of the world, they’re left with few options.
In general, unidentified people come from low-income countries, where women are singled out as being the most affected. Being left behind without a way to join the financial mainstream renders an already vulnerable group even more at risk.
Luckily, countries across the globe are uniting to provide digital IDs to end this vicious cycle. Over 160 countries are working under the umbrella of the World Bank’s ID4D initiative. The ID4D is an initiative that provides resources to build a robust infrastructure that supports a digital ID system. The vision of including the over one billion people globally without an ID is rapidly looking to become a reality.
KABN’s Mobile Banking Wallet
As individuals around the world gain access to digital IDs, our platform is readily available and committed to being a leading digital financial service. Anchored by our KABN ID platform, the mobile banking wallet is a one-stop solution to link your digital ID and your cryptocurrencies seamlessly.
One of the many benefits of KABN’s platform is our mobile banking wallet and cryptocurrency-linked Visa card. Our platform enables users across the globe to participate in financial services without borders.
Branded the Pegasus Flyte card, KABN’s prepaid card is spendable anywhere Visa is accepted, online, in-store, or peer-to-peer. Through our mobile banking wallet and Visa card, users around the globe will soon enjoy the benefits of the inclusive platform that KABN provides.