Page 69 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

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

Figure 8: Federated internet identity architecture

A.2.1 Applications within DFS

One of the most prominent examples of federated identity architecture within the developing world is found in
the GSMA Mobile Connect programme . This service enables multiple and separate mobile network operators
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to provide digital identity services to third parties via the same standards.

To date, Mobile Connect has mainly been applied to online login services, leveraging the due diligence performed
during registration with the MNO to establish an identity and utilising the SIM card as an authenticator. However,
recent expansion of the service to potentially 800 million subscribers across India provides opportunity for
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enhanced application within the field of DFS.
Due to the similarities of the federated identity model to monolithic architectures, many of these applications
remain comparable. However, specific benefits can be drawn from the nature of having multiple service
offerings in the marketplace. For example, the liability risk that would normally be associated with a single
provider is spread across multiple service offerings. This offers the advantage of damage limitation in the event
of a data breach as only a limited percentage of the accumulated data pool will be compromised.

Furthermore, federated architectures enable the opportunity for greater co-operation and sharing of resources
among both public, and private ventures. This becomes particularly interesting when considering the scope
of useful attributes not currently achieving widespread utilisation within the field of DFS.

For example, a 2013 report from the Consultative Group to Assist the Poor (CGAP) revealed a correlation
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between the attributes surrounding a subscriber’s SMS, phone call, and data transactions, and a higher or
lower propensity to adopt mobile money services. With such a strong relationship between mobile data and
DFS, the federated model could be used to bridge the gap between MNOs and financial institutions in markets
where legislation has excluded non-bank entities from offering mobile money services.

A study from the GSMA in 2014 revealed “non-enabling regulation” (regulation forbidding MNOs from leading
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mobile money offerings) was a key contributor to services not reaching their potential in certain markets. By

33 https:// mobileconnect. io/
34 http:// www. gsma. com/ newsroom/ press- release/ gsma- announces- launch- mobile- connect- across- india/
35 http:// www. cgap. org/ publications/ power- social- networks- drive- mobile- money- adoption
36 http:// www. gsma. com/ mobilefordevelopment/ programme/ mobile- money/ is- regulation- holding- back- financial- inclusion- a- look-
at- the- evidence#!

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