October 1, 2019
You might recollect a story that a couple of months ago, where we wrote about how the statistics on identity are nothing short of alarming – the number of people that lack a concrete identity is close to 1.1 billion. Putting this into perspective – this is roughly one-seventh of the world’s current population. This means that these people would struggle to access even basic services. What problems does this lead to? For starters, lacking identity will make it difficult for those without it to freely avail of governmental offerings and employment opportunities, access finance, or for that matter, even procure a mobile phone. The fact of the matter is, citizens’ access to rights is critical for the growth of any country.
Amidst this identity crisis and the increasing digitization around the world, several companies and governments began to enable the provision of digital identities. In the past few years, the Know-Your-Customer (KYC) landscape has changed. BCG predicts that with an increase in connected devices and digital transactions, the market for identity authentication and fraud solutions will boom. Estimates suggest that there will be an increase from $12 billion in 2018 to $28 billion in 2023. Further, in a focused seven-country study by McKinsey, they found that the full extension of digital identity coverage had the potential to unlock economic value up to 12% by 2030. Of this, about half could accrue to individuals, hence showcasing the opportunity for inclusive growth.
The advantage of digital identity could then be leveraged to improve customer onboarding. At present, the majority of the work is done manually, or through physical identities.
Over 3.4 billion people do not have identities that they can use on a digital channel. This implies that despite the 6 billion having identities, about a third of them cannot leverage it online.
Multiple issues remain, including those of privacy and lack of customer autonomy. Moreover, the digital identity space is scarred by increasing fraud and a lack of legitimate entities. In January 2019, a report found that the programs that employ this technology have only had mixed success to date. Multiple applications have failed to reach the most modest levels of usage. Those applications that were previously in the market relied heavily on cloud storage or national identities.
Furthermore, customer onboarding is still time-consuming, expensive, and a largely ineffective process. At best, a customer faces paperwork, delay, and unnecessary intrusion; and at worst, the consumer is excluded completely. Estimates suggest that it takes close to 30 days to onboard a customer.
Some FinTech players in the market have begun to realize these challenges, and have found solutions to tackle them. In India, there are multiple applications, such as Digio, Signzy, e-Sign, etc. One such product that makes its mark is Kyzo, which is a personal digital identity application developed by FRS Labs. Launched in April 2019, this application enables high-assurance, consent-based, and secure P2P sharing of identity.
The company sets itself apart by primarily being product-focused. Identity verification and KYC have multiple uses cases and follow any individual wherever they go – including investment, insurance, health services, education, or even travel. Since the need is a multitude, any product needs to have an easy integration solution. Kyzo has achieved this with its zero integration process for small merchants and a QR integration for larger enterprises. Soon after its launch, Kyzo even enabled the renewal of library cards in a small town in Southern India.
Moreover, one sees a strong differentiating factor in their concern for the end customer with their motto being “identity should remain a public good.” Their application can be easily downloaded from the online application store for no charge and has a strong security layer to store the data locally and a digital signature certificate that signs all the documents when shared with service providers. This is in contrast to other incumbent players in the market.
Furthermore, it is built on a simple consumer interface with only two options: scan and share. The software behind the upload is designed smartly, such that it automatically recognizes the document and cuts out noise, without any input from the consumer. Sharing is also easily accessible through QR codes which can be generated on the phone itself or through their latest peer-to-peer share for singular documents. Their customers speak for the innovation and quality of their services. Having had over 14,000 downloads in less than 6 months, Kyzo has a high rating of 4.5 on 5 on the Google Play Store.
The other area where one notices this commitment to customers is in the application’s security. Cybersecurity remains a major concern across the globe, especially in India’s digital identity space. The use of Aadhaar, a national ID provided to residents by the government, caused an uproar due to the feared lack of privacy; Kyzo does something different. Before the application is installed on a device, a thorough check on its operating system and security is conducted. Only if the requirements are met – the phone’s operating system being legitimate and the phone having no security hazards – can the application be used.
In a recent interview by the Asian Age, FRS Labs Founder & CEO, Mr. Shankar spoke about the plus-points of Kyzo, saying, “(the app) can be used in multiple ways – face to face, app to app and app to the web. For instance, sharing your KYC documents with banks and other regulated entities can happen face to face by scanning the QR code in the banker’s app which is validated and stored in the core banking systems (if this is what the regulator wants the banks to do).”
Impressive by itself, but then he went on further to say, “Or, you could just scan the QR code at the hotel lobby to share your identity data as a digitally signed PDF with the hotel manager. We foresee that it can be used by governments, individuals, companies, schools, hotels, casinos, car rentals, and virtually any place where your ID needs to be shared safely.”
The company’s innovative approach is also seen in the responsibility they take towards privacy. The application stores the identity on an encrypted platform on the user’s phone itself, setting itself apart from its competitors. There is no cloud storage, which leaves no scope for mass hacks or leaks. Even the company does not track its users and identities. This ensures that at no point are all the identities of all its users compromised simultaneously. Kyzo is designed such that each user has a unique private key. Importantly, the algorithms used by the developers to create the key is also unique to every single user. Hence, even in the unlikely situation that one user is hacked, the possibility of multiple users being hacked is impossible.
The fact is identity is a private good, and digital identity should be a public good. FRS Labs and Kyzo are strong proponents of exactly this – they are not reinventing a new identity here; simply converting the physical ID to a secure and private digital ID enabling millions to partake in the digital ecosystem. This, in turn, can reduce the cost of doing business, bring more economic opportunities for more people, and turn the wheels of the economy. With their innovative solutions, the company looks to solve a fundamental problem that plagues half of the world today.
We’ll keep tracking Kyzo and other products in the digital identity space over the next few months and continue to bring you the very latest in updates.