Over 1 billion people in the developing world lack any form of officially recognised identification, either paper or electronic-based. This identity gap is a serious obstacle to participation in political, economic, and social life. Without a secure way to assert and verify one’s identity, a person may be unable to open a bank account, vote in an election, access education or healthcare, receive a pension payment or file official petitions in court. Furthermore, inadequate identification systems mean that states will have difficulty collecting taxes, targeting social programs, and ensuring security.
Today’s guest on No Ordinary Business, Bonaventure Wong, is here talking to us about the identification challenge and about how mMobility, a non-profit organisation is tackling this issue.
GINA: Welcome, to No Ordinary Business, Bonaventure!
BONAVENTURE: Thank you for inviting me to speak with you, Gina.
BONAVENTURE: In the late 1990s I founded a company in Hong Kong that sold pre-paid cards to a niche market of domestic workers from the Philippines. I subsequently sold that company to a Hong Kong telecom. After that, I moved to Dubai and established another start-up. My business at that time focused on outsourcing the interconnect and billing between telecom carriers. Unfortunately, 9/11 happened and when our largest funding was held indefinitely because it was going to the Middle East - that introduced me to the geopolitical problems in the world and terrorism. After that, I joined a private family office to one of the UAE royal families, which led me to Morgan Stanley on the Middle East desk in 2008. My responsibility was to build a corridor of investment opportunities from the Asian market to the Middle East market.
I was looking after the clients based in the Middle East and the onboarding of new clients. While satisfying the Bank’s due diligence and KYC (Know Your Client) requirements, the process took months the lack of third party information of clients background.
GINA: I recall, after 9/11 due diligence and KYC requirements for international financial institutions became very stringent. Increased compliance requirements for AML (anti-money-laundering) and anti-terrorist financing complicated onboarding new clients. I can imagine this was particularly challenging for clients coming from the Middle East.
BONAVENTURE: Onboarding clients in the financial sector started to take three to six months just to know whether the bank’s Compliance department was going to accept the client and their funds. During that period clients began to become increasingly frustrated, especially high net worth individuals who felt the process was intrusive. This didn’t gel well with them. Being in the Middle East, that didn’t help at all as there was that additional layer of concern. In addition, banks with existing client relationships would not share their due diligence with other banks. So every time a client would go to a new bank, they would have to undergo the same process over and over again.
All of this led me to try to figure out, how, now that we are in this digital economy, how to use technology to create a way to verify identity more seamlessly. I saw this was possible, by the development of robo-advisory and other financial technology that was coming into play, a lot of banks back office work could be done seamlessly over a web application. That started a whole new era of financial management surpassing the traditional systems. Fintech began to change the way that banking will become in the future.
GINA: Was this the initial inspiration for mMobility?
BONAVENTURE: Yes, our focus was initially to look at how we can streamline the onboarding process using the digital economy and fintech, which was booming. We also saw that the convenience of fintech came with a cost, a lack of security. Today's applications are set up where each application obtained your complete personal information, which allowed hackers to identify the application with the weakest security to obtain your personal identifiable information. With this information, hackers were able to open bank accounts or apply for credit cards in your name.
GINA: Identity security breaches have become a huge problem. How do you address this issue?
BONAVENTURE: To tighten security, we need to move away from what you know to what you have, basically through mobile device and biometrics. Initially, mMobility was focused on enhancing the identity verification process in a secure, seamless manner.
So we considered how do we bridge between the physical and digital world and make it user-centric? We looked at alternative technologies out there. Blockchain has entered into the marketplace rapidly in the last two to three years. We saw blockchain as a way of creating a secure global identity network based on infrastructure where no one single central authority can control it.
GINA: And you saw blockchain as a platform that could facilitate seamless identity authentication that would serve the needs of various commercial enterprises to onboard new clients?
BONAVENTURE: Yes, the decentralised design of our blockchain allowed attribute providers to share data without revealing it and with no central authority. This ability enables any attribute providers to link without worrying that privacy and security have been infringed.
GINA: How did you get to thinking about how this technology could serve a broader social purpose - what led you to the social mission?
BONAVENTURE: The social mission arose through our research. In the developing world, approximately 1.5 billion people live without formal identification. We realised that there were many countries didn’t have an electronic system for national identification including the US. Instead, they rely on drivers’ licenses (which not everyone has) or passports (which even fewer people have) or the social security number (which doesn’t work because it doesn’t have a photograph attached to it). We saw this as a much bigger issue and felt that our model could serve both the developed and developing countries.
On the other hand, you have places like Hong Kong, China or the United Arab Emirates in the Middle East, that have electronic identification in their current civil registry system with biometrics that is linked to the chip on the card. The problem is that in the developed world, civil registries and the rest of the community of industries within the jurisdiction are disconnected. That disconnect is the greatest problem we face right now in developed countries.
GINA: So describe briefly how the mMobility infrastructure works?
BONAVENTURE: We are building a user-centric enterprise blockchain identity infrastructure by linking users data from the authority that issued them that are distributed on different systems, on different storage devices, on social networks, on corporate servers, in government databases. Our core identity authentication is provided through mobile networks.
If there are many duplicated silos of complete personal identifiable information out there, it increases the chance of hackers obtaining your information. Our infrastructure has a unique attribute; one can share data B2B2C without revealing the data itself. All sensitive data are retained at the entity that created that set of data, example civil registrar, has your name and birthdate, passport authority, will only have passport number/expiry date and not your name or birthdate, which would be linked to the civil register.
GINA: Where are you finding the 1.5 billion people without formal identification living?
BONAVENTURE: They are across Africa, South East Asia such as Malaysia, Indonesia, and Bangladesh. India has been working on it for the last 9 years and has signed up 1.2 billion people so far. Believe it or not, South America has a better system in place.
GINA: I was curious when you didn’t mention South America in that list.
BONAVENTURE: Actually, they are doing quite well. I think that countries that want to keep a close eye on their citizens tend to have good identity tracking systems in place. The US is unique too despite being a developed country doesn’t have a national identification card in place.
GINA: I don’t think Canada has one either, have you looked at Canada?
BONAVENTURE: You’re right. Canada doesn’t have one either. There is no national identification card.
GINA: Is that because of concerns over violating privacy rights?
BONAVENTURE: Yes. People are more sensitive to privacy concerns. Contrast that with China. China is the most monitored country in the world. There are more CCTV cameras in China than anywhere around the world. People are used to it.
GINA: It is greater per capita than in the UK?
BONAVENTURE: Yes, it is because in the UK monitoring occurs mostly in the metropolitan areas, whereas in China the cameras are scattered throughout rural areas as well. Basically, in China, all you have to do is show them a photo, and they can find you within 10 minutes.
We spoke to people in countries like China, and their understanding of privacy is determined by culture. They don’t feel like it is an infringement of their own personal space.
Conversely, if you look at the US and Canada, privacy is an important priority and goes to the heart of quality of life. There is a geopolitical element of privacy associated with more democratic countries. It is interesting how the world works.
In Europe they are much more advanced with national identification systems in place – in Estonia, Norway, for instance, they all have national identifications.
In Africa the barrier to establishing national identity is cost. It costs a lot to set up this kind of system. Also, citizens are all spread out. Government changes so frequently as well. None of this helps.
GINA: Can you elaborate on the unique challenges that arise from a lack of formal identification system and then explore the challenges that arise for displaced persons such as refugees? I imagine the issues are different. What problems arise in each of those scenarios?
BONAVENTURE: We look at the world in two parts. Our research reveals that on the one hand there are governments that are building digital identity systems because they see the cost benefits. These are typically wealthy countries. They have ample resources and local talent.
Then you have other areas in developing countries where nothing is happening. Who is helping the developing economies without formal identification processes or the refugees? It is the NGOs like UNICEF for instance, and they are building their own database of identity data or the ID2020 alliance, but it is challenging for them because often they have to persuade individuals to sign up, who have not had any prior identification.
GINA: ID2020 is a public-private partnership dedicated to solving identity challenges through technology, correct?
BONAVENTURE: Yes. There are all these pockets of NGOs that are doing their own work in these countries. The challenge isn’t about connecting to the user; the NGOs know how to do that. Rather, the challenge they have are how to onboard these individuals, because it is hard to explain to someone who doesn't have an identity the benefits. These are people who have been living without an identity for years. It is a way of life that they don’t understand, so education is very important. They need to understand that identification gives them access to services like healthcare and education.
GINA: What about refugees? What is the challenge there?
BONAVENTURE: It really depends on the situation. They leave because of war, and they take things with them. It is not like it is a last minute decision, so they bring their identification with them such as physical passport or birth certificate. The United Nations has to process them into the system and find ways to place them in other countries. We are facing a big issue with refugees that are being displaced. Twenty people every minute is being displaced – this is far greater than post World War II. These are people who have driven away from Syria, Afghanistan, Myanmar, Iraq, and Libya, throughout Northern Africa.
The problem with the refugees is such that the host countries receiving them have no idea who they are. They may see a name on a document, but it is meaningless to them. The screening and filtering of these newcomers take so long because they need to verify identity before they can move on and be granted refugee status.
GINA: So they are basically held up because the process that is currently in place or the conventional approach is outdated and inefficient. The process of placing people into their host countries and integrating them into society is delayed because of these inefficiencies – is that fair?
BONAVENTURE: Correct, yes.
GINA: So, how is mMobility addressing these gaps and tackling this problem?
BONAVENTURE: Our goal is to create global social change and improve quality of life through digital identity. We looked at using blockchain and the way we designed it is to link user identity that exists in different systems or different storage devices, social network, and government databases. These data are sitting all over the world. For us, we’ve probably forgotten how much is out there about us. Our offering links those data together and using the user as the central point.
Because of my earlier experience working in the mobile network industry those close contacts give us access to their user data as a grounding point. The mobile network industry will serve as trusted anchors providing the core of our infrastructure. Most people have mobile phones and have established an identity with their mobile provider.
GINA: Can you ground this in an example? For me, I’m sure I have personal data scattered all over the world, I don’t even want to think about. What does the profile end up looking like and how do you get there?
BONAVENTURE: The way we’ve designed our model is a user-centric interface that connects to your data sitting at third-party servers. Using the smartphone users can manage their data that are linked to the infrastructure. For those who don't have a smartphone, it will be a simplified biometric interface that they can use to interact with their service providers. Currently, there is no way that you can access these data or even manage them.
GINA: What type of biometric are you using?
BONAVENTURE: It can be any biometric, such as facial, fingerprint or voice. It really depends on the service provider choice of acceptance.
To illustrate, as a user with a smartphone you will have a wallet application that allows you to manage all the data that is linked to you. You don’t have to go to Facebook and register. By integrating onto our infrastructure, Facebook automatically notifies you and seeks your consent to access your data. Every time a new set of data are linked, we will use your mobile operator collected attributes as the core sample to link to the wallet. The user can choose to give consent to link that set of data for future interaction with your service providers.
GINA: So I can control what is released - the extent of the information about me that is shared?
BONAVENTURE: Yes, that is correct.
GINA: What if I don’t have a smartphone?
BONAVENTURE: The difference with someone who doesn't have a smartphone, is that you cannot manage your data in the same way as someone who does. That is why we are working closely with the mobile network operators and because of dropping hardware prices for mobile phones; it is just a matter of time before we can get the smartphone devices to more individuals.
GINA: So it is a matter of increasing access to the smartphone that will eventually penetrate the markets where they are not currently widely available because of high costs.
BONAVENTURE: It is the mobile service providers that will be driving that change, and as costs come down, access to this technology will increase automatically. Also, don't forget all the other digital economy participants will drive towards 100% penetration.
GINA: How do you know if the information connected to your platform is aligned with the service provider needs? In other words, will it satisfy due diligence requirements?
BONAVENTURE: Through our blockchain design, the service provider is able to set up a smart contract, with criteria they will accept for onboarding, for example. So if for instance, the bank requires that you need biometric fingerprints to identify who you are, and if the civil registry with your biometric is already connected to mMobility infrastructure, assuming the service provider's other requirements are met, the user should be able to onboard within seconds.
GINA: For displaced individuals who are trying to reintegrate into a new society, what hurdles do you have to jump through to get local authorities onboard to accept this as a way of establishing the identity?
BONAVENTURE: The biggest challenge with any data is the ability to share it. Sharing means copying that data. That is a huge issue with any sovereign country. Even within industries, say bank to bank, hospital to hospital there is a reluctance to share data. Our offering depends on sharing data, we do it without revealing the sensitive data, and that can only be done on the blockchain.
GINA: And it is your assertion that the financial institutions or other service providers will be willing to accept this third-party verification as satisfactory to meet their own due diligence requirements?
BONAVENTURE: The key to success for us is the integrity of the data that is linked. When you have a civil registry and mobile operators linked as our ‘trusted anchors' it creates data integrity. Remember service providers can choose what data link they accept to meet local regulatory requirements. Also, mobile network operators have been authenticating your devices for over twenty years. They are in an excellent position to provide this authentication not only within their own network but onto our infrastructure as well.
GINA: What’s the value proposition for the mobile operators to getting onboard to your infrastructure?
BONAVENTURE: In the recent years, mobile operators have been looking at how they can increase revenue stream through authentication on third-party applications. The problem with the existing model is that they have to approach every individual service provider. There is a considerable cost associated with getting to the service providers who may or may not be in their country.
We built our infrastructure by allowing a single relationship or connection to the mMobility infrastructure to offer their service to any service provider that is linked to the same infrastructure, regardless of which country they might be. It saves them time and cost in getting to the service provider.
GINA: How does this work?
BONAVENTURE: It is comparable to how mobile networks operate today. For instance, when you travel internationally, you are still connected to a mobile network. When you are roaming, you still have access to data services or to calls even though you are in another international location. This is all made possible because there is an alliance of roaming services across networks that authenticates each mobile phone customer as they travel. That has to be the same scenario when you are authenticating your own identity - you are who you are, regardless if you are in Syria, in Greece, or in Hong Kong. That model is built into our core protocol.
GINA: At what stage of development or operations are you?
BONAVENTURE: We are currently in development and by September will have completed our test net and by the last quarter of 2018 we will be piloting the programme in Dubai and Hong Kong integrating it with the mobile operators and the civil registry in those two places. That allows us to build our protocol infrastructure in those cities making it available to service providers.
GINA: What about working with the NGOs or aid agencies? Have you considered collaboration?
BONAVENTURE: We are members of and talking to ID2020 and are looking at what markets are creating identity registries and exploring how we can bring existing silo data onto our infrastructure. The NGOs are focused on the on the groundwork, and they have done a good job so far. The only problem is that their collected information is disconnected from everything else. Our infrastructure protocol allows them to connect it and so that information that they have collected can now be used for other service providers in the marketplace.
GINA: Have you considered how you can track impact with the target underserved populations?
BONAVENTURE: Two things are happening here. First, you have NGOs that are already creating identification for underserved or refugee populations. There is an obvious social impact there. The question for us is how can we continue that impact once these individuals are onboard by the NGOs, through connecting to our infrastructure can also access other services. That's going to be driven by our application partners in various industries. We see ourselves extending the social impact that the NGOs are already creating.
The second impact goal, which we haven’t spoken about yet, is our social impact tokens. We will retain 10% of tokens for sustaining our operation, and the other 90% is distributed to the market. 45% will be given as grants to businesses, governments, institutions, or non-profit organisations that contribute to the growth of the mMobility ecosystem. The other 45% tokens will be given through the NGOs to the individuals who don't have an identity, incentivising the 1.5. billion people to onboard.
We won't be launching any Initial Coin Offering. We intend to list our token as a social impact token on exchanges to allow the community to continue to support our initiative. The more the community support our token, the more in dollar terms we will be distributing. Of course, we do have utility usage of our tokens, for the settlement between participates, that might be sharing data or authentication and so on.
GINA: It is a whole new way of impact investing.
BONAVENTURE: Yes you don't have to rely solely on foundations like the Bill and Melinda Gates Foundation - this is indeed the power of the community coming together helping people in need.
Stay tuned tomorrow for Part II of our two-part conversation with Bonaventure Wong, co-founder of mMobility.
In Part II, Bonaventure talks about how Millennials will be the driving force behind increased values of cryptocurrencies, why mMobility is structured as a non-profit, how it is generating revenue, and Bonaventure's ultimate vision for social impact.
Bonaventure Wong is the CEO and co-founder of mMobility, a non-profit technology company whose mission is to create global social change and improve quality of life through digital identity.