Page 53 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

3.1.2 Image processing software

Image processing tools can alleviate the need to manually verify the genuineness of paper identity documents.
However, the extent to which providers of DFS could benefit from this type of system depends on the capability
of the software and the level at which it is deployed. For example, during the customer and agent registration
processes for mobile money, time and cost is wasted processing applications which do not satisfy registration
requirements, and image processing software could improve efficiency, depending on how providers chose
to enable access to it:

• Image processing for administrators: When used as part of an administrative management (back office)
suite to verify that genuine documents have been submitted as part of customer or agent registration;
the technology can save time by automating what would otherwise be a manual process, but will not
necessarily stem the flow of ineligible documents being submitted.

• Image processing for agents: When deployed at the agent level, greater time and cost efficiencies may
be achieved through a reduction in false or ineligible document submission, however submitted customer
applications may still be rejected on the basis of validity (i.e. individual is blacklisted on authoritative
rd
database). Call outs to 3 party databases in order to prevent this are possible, but (unlike straightforward
rejection of false or ineligible documents, which can happen offline) would require Internet connectivity
at the point of registration, and in any case, are unlikely to be an appropriate function for agents.

Examples: Aut10tix , Jumio , Mitek .
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1
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1 http:// www. au10tix. com/
2 https:// www. jumio. com/
3 https:// www. miteksystems. com/

3.2 Authentication technologies

Authentication technologies provide a filter allowing only legitimate entities to assert the attributes established
during identification. In addition, low literacy levels in emerging markets exacerbate usability requirements.

3.2.1 PINs
The PIN is the authentication technology that almost all payments in the industrialised world currently rely on
(though there is a gradual evolution towards biometrics, in the form of Apple Pay, Android Pay, et al). Similarly,
almost all mainstream DFS providers currently rely on PINs for customer authentication.
However, there is a commonly held view that many of those at the bottom of the pyramid (BoP) cannot use
PINs reliably, due to illiteracy, innumeracy, lack of familiarity, etc. It is likely that in most cases the issue stems
instead from low frequency of use, since many of these customers will access financial services infrequently –
perhaps as little as once every three months, or even less. Since frequency of use is linked to memory, it should
come as no surprise that PINs are forgotten. Further, the lack of use leads people to write their PINs down,
often on the back of the card or even the mobile phone they’re using. This naturally leads to PIN compromise.

Alongside this, it would appear that global and national fears around terrorism are beginning to have an effect
on PIN use, as the regulatory authorities in a number of countries are deciding that a PIN is not enough, for at
least some financial transactions. For example, in India – and soon in Pakistan – online biometric authentication
for bank transactions, based on Aadhaar, is becoming the norm. Further, the 2015 terrorist attacks in Paris
were reported to have been financed using prepaid debit cards, which reflects a broader issue with payment
cards in that one person (who passes KYC checks) can acquire the card and top it up, whilst another person
uses the funds, with the PIN being forwarded in some way alongside the card – perhaps by post. This is very
difficult to track, and raises the possibility of the increased use of biometric verification of cardholders, to

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