Page 24 - FIGI: e-KYC use cases in digital financial services

a) Key management: The ledger significantly sim- gramme (UNDP) and leveraging more than 2,500
plifies tasks traditionally associated with certifi- identity registration sites across the country, the civil
cation authorities and PKI systems. registration efforts leading up to the election yield-
b) Audit trail: Where needed, the ledger can record ed near-universal official identity coverage for Sierra
transaction proofs for legally or economically Leone's adult population.
consequential events. Working with Kiva, a US-based nonprofit focused
c) Economic model: The ledger can implement and on financial inclusion, the NDIP has helped migrate
enforce payment flows associated with identi- the identity data in the NCRA database into verifi-
ty-related transactions. able credentials held by citizen-controlled and -per-
missioned digital wallets. As the NDIP wallet infra-
These technological tools can enable the user to structure is integrated into the financial sector, any
manage his or her information and to decide exactly adult citizen with an NCRA-issued identity creden-
what is disclosed and under what circumstances. A tial will be able to securely authenticate their official
well-designed DID system can allow the user to con- identity with FSPs to support e-KYC for new account
duct many identity-verification and authentication opening and ongoing customer due diligence (CDD).
transactions over "zero-knowledge" protocols that
mathematically prevent information leakage and can 5�1 Kiva Protocol – System Overview
even thwart privacy-violation threats that arise from The Kiva Protocol implementation in Sierra Leone
event correlation. has a three-layer architecture to enable citizens to
Service Providers benefit from lower costs and a securely share authenticated official identity creden-
much higher level of assurance in every verification tials with the financial sector to support KYC and
transaction, plus auditable verification proof that CDD compliance.
may be indelibly recorded to a distributed ledger.
Verifiable Credential Issuers can not only save sub- 5.1.1 Public utilities
stantial costs related to paper-credential issuance, The foundation of Kiva Protocol is a network of
but, owing to the payment-handling capabilities of nodes supporting a public decentralized identity
distributed ledgers, can build entire new businesses (DID) registry. This registry provides the foundation
based on incremental revenue accruing through use of trust in the digital credentials used to verify iden-
of their issued credentials. tity.
The next sections examine two examples of
decentralized ID system used for biometric registra- 5.1.2 Trusted connections
tion and e-KYC. The next layer of the architecture enables trust-
ed connections through authentication services
and wallet services. For authentication, the NCRA
5 SIERRA LEONE'S NATIONAL DIGITAL collected biometric information as part of its iden-
IDENTITY PLATFORM tity registration efforts starting in 2018. All NCRA-is-
sued identification credentials can be authenticated
Sierra Leone launched the National Digital Iden- using a fingerprint bio matcher service developed
tity Platform (NDIP) in August 2019. The NDIP is and implemented in Sierra Leone. Wallet services
an extensible digital identity infrastructure – built enable citizen credentials to be stored in wallets with
using Kiva Protocol's open source technology – that agent communication tools to enable peer credential
enables citizens to present and authenticate official exchange.
digital identity credentials with financial institutions. Together, these tools enable citizens to securely
Once fully integrated into the financial sector and authenticate and access their digital wallet, and then
supported by an appropriate regulatory regime, the send and receive credentials using the wallet agent-
NDIP will provide the foundation for a market wide to-agent communication protocol.
e-KYC utility in Sierra Leone.
The NDIP leverages the identity data collected 5.1.3 Application ecosystem and data exchange
and held by Sierra Leone's National Civil Registra- Using the technologies from the first two layers, citi-
tion Authority (NCRA), a citizen registry created by zens are provided a real-time, secure, user-centric
the Government of Sierra Leone to support broad identity verification process that can support e-KYC.
participation in the 2018 general elections. In part- In Sierra Leone, the NCRA is the issuer of over 3.6
nership with the United Nations Development Pro- million digital IDs, with ID management and adminis-

22 e-KYC use cases in digital financial services