National Digital ID’s Use in E-KYC Across the World
BANDAR SUNWAY – If Malaysia were to pursue a National Digital ID (NDID) agenda, it pays to reference other countries that have already taken steps to do so.
Some countries have implemented a basic NDID system, while others are still working towards that goal. Regardless of the stage of implementation, e-KYC is an aspect that crops up constantly in many of these systems — hinting at NDID’s important role in making e-KYC much more effective.
Singapore
Managed by the Government Technology Agency of Singapore (GovTech), SingPass is the island nation’s NDID platform launched in 2003. It allows citizens to access about 1,400 digital government services involving 340 agencies.
The Singpass app was first launched in October 2018 and has opened up the doors to a multitude of use cases, such as incorporating fingerprints as biometric authentication as opposed to passwords and tokens.
The way institutions adopt NDID as part of their e-KYC process is unique. It uses MyInfo Personal — a service and database built for the purpose of verifying the user’s personal data, allowing financial institutions to verify identities through the service alone without requiring additional documents.
In terms of security features, Singapore is also said to be the first country in the world to use facial verification in its national identity scheme. This cloud-based feature was incorporated in 2020 and is equipped with anti-spoofing features. With the app currently having over 2.5 million users, this feature is currently being used in kiosks located in tax offices and banks.
Regarding data privacy concerns, GovTech’s senior director of the project Kwok Quek Sin said in an interview that such a system is better for individual privacy because companies no longer need to collect any biometric data from users.
“We don’t really restrict how this digital face verification can be used, as long as it complies with our requirements,” he says.
“And the basic requirement is that it is done with consent and with the awareness of the individual.”
Arab Countries
Earlier this month, the United Arab Emirate’s Federal Authority for Identity and Citizenship (ICA) has started issuing an electronic version of the Emirates ID.
The e-ID is made available on the ICA UAE Smart app, and authorities call on applicants to use e-IDs until the physical card is prepared. Authorities assure that the e-version of the card is as valid as the physical one.
Currently, the ID is not used as part of e-KYC implementation within financial institutions. However, it is currently used to gain access to government services, register for mobile operators, utility services and pass through immigration checkpoints.
There is also a great chance that this e-ID will see prominent use amongst financial institutions in the near future. In February last year, the Arab Regional Fintech Working Group released a report highlighting recommendations for Arab Countries to develop their own Digital ID and e-KYC programs.
In the report, it highlights that the first customer interaction for financial institutions will set the tone for the entire banking relationship, and it is essential to move away from the lengthy, cumbersome paper-based processes. Providing an omnichannel digital customer experience is described as “a true game-changer”.
India
In January this year, India’s Electoral Commission was discussing the prospect of using e-KYC as part of their voting process by linking Aadhaar — the world’s largest Digital ID database, with EPIC — the nation’s Voter ID card. Later that month, they formally launched the e-EPIC (Electronic Electoral Photo Identity Card) programme.
Minister Ravi Shankar says that the digitalisation of voter-ID cards will have a special significance in the upcoming polls within five states in the country. This marks a shift from e-KYC being mainly viewed as a commercial tool, to one that is able to dictate the outcome of a nation’s election.
Yet, this move is shrouded in controversy. Since last year, the Electoral Commission suggested that an eKYC platform be created, and the government stated intentions to amend the Representation of People Act to enable it. Local media outlets warn of a looming risk of voters without Aadhaar being disenfranchised.
The Electoral Commission is also planning trials for a remote biometric voting system. The system is said to involve white-listed IP devices on dedicated internet lines, transmitting data from biometric devices with web cameras. Votes will be recorded on a blockchain, and the system will be set up at designated venues for those wishing to vote remotely, and operate during a predetermined time period.
Despite e-KYC usage within the political space, issues regarding e-KYC use in the private sector have yet to be ironed out. Despite the nation’s Supreme Court ruling that Aadhaar cannot be made mandatory for private sector services, the nation’s HDFC Bank has done exactly that.
Similar to Singapore, authorities had also introduced the Aadhaar Paperless Offline e-KYC with the goal of reducing identity theft and fraudulent activities. It is an online authentication facility to verify the identity claims of the Aadhaar cardholder, and has been used by mobile operators since 2015.
