Just to mop up the final discussions at the White House #FinTech summit, there was a fourth panel on financial inclusion. This panel comprised, from left to right:
This was also an interesting panel, with Franz from PayPal noting that, “the best way to shut down corruption is to digitalise cash”. This is so true. Vikas built on this by recognising that mobile services such as Easypaisa in Pakistan and M-Paisa in Afghanistan move money straight from government accounts to the account of the target user. This is a very powerful driver, as the user is in control and the middleman, which, in several economies is a corruptive influence, is avoided or ignored. That is a key. As Greta noted, making “customers feel empowered and in control is a key, which is what drove M-Pesa” in Kenya.
Blockchain for identity
The panel went on to talk about blockchain for identity. Combine blockchain digital identities, based on a mobile biometric fingerprint or eyeball, with a mobile wallet that has interoperability and standards, and you have a transformational moment. You can see this in Tanzania, where operators are building the rulebook, and you can then see a near-term future arising out of Africa, where a cheap mobile identity scheme takes over the world (as blogged about the other week).
This cheap and easy digital identity programme is actually being pioneered by India, where Aadhaar, the digital identity card rolled out by the Indian government to almost a billion people so far, has laid the bedrock for a mobile financial inclusion programme that is truly transformational. Aadhaar has taken years to roll out – it’s not finished yet – but is the basis for the Universal Payments Interface (UPI) that allows any Indian to pay any other Indian via a mobile, cheaply and easily. The UPI was launched in early April and lets users use their mobile as a way to authenticate identity, essentially turning the phone into a debit card that can be used anywhere.
A few other discussions highlighted how government also has to compete with tech developments. For example, after the HealthCare.gov disaster, US government has hired more techies and rock star developers from Silicon Valley than banks. Around 300 techies joined USDS after the HealthCare.gov disaster, and the CFPB (Consumer Financial Protection Bureau) is one of the most technically advanced government departments, according to many.
Four pillars of cybersecurity
In a separate discussion, Anjan Mukherjee, counsellor to the secretary of the US Department of Treasury, talked about cybersecurity and outlined that there are four pillars to the US government approach to cybersecurity.
First, there is the Financial Services Information Sharing and Analysis Centre, which networks 7,000 banks and non-banks to share knowledge of their cyber defences. Second, there is the NIST framework, which allows standardisation for cybersecurity to take place. Then there are lots of simulations of cyberattacks run by various agencies, and finally the Treasury proactively targets to shut down threats.
This work is important because a cyberattack on the financial system can have a ripple effect across the whole economy. This is why the G7 has a cyber working group, co-chaired by The Treasury and Bank of England, to develop a common cybersecurity framework of best practices that will be universally applicable to banks, financial institutions, fintech and tech providers (and more).
Big data can help
Roy L Austin Junior, deputy assistant to the president for urban affairs, justice and opportunity, talked about civil rights and big data. This was intriguing, because he mentioned the data about hate crimes in America. Roy noted that the department gets race crime data from 2014. It’s out of date when they get it. It’s also probably not accurate. For example, in 2014 the data stated that there were 759 hate crimes in California. How many in Alabama? Nine. In Mississippi? One.
That doesn’t sound quite right, but it’s the only data set the Department for Urban Affairs, Justice and Opportunity has to deal with. In an impassioned speech, Roy made clear that this has to change, and that big data can make that change.
So there you go: a comprehensive update of the White House Fintech Summit, which I felt privileged to attend. The whole day was organised by the one and only Adrienne A Harris, special assistant to the president for economic policy at the National Economic Council, and a good friend. Adrienne also summarised the day in her own blog. Here’s to the next time. Cheers, Adrienne.
READ NEXT: The challenges of mobile financial inclusion
– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Main image: SWEviL, Shutterstock.com