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The Race is on: a New Digital Financial Identity for Every Global Citizen

by | Sunday, 2nd April 2017
The second in a series of articles investigating the Global Citizen movement. Who will win this race? The corporate world, the banking world or the world's governments? And why is the Pope involved?

As the Fortune + Time Global Forum at the Vatican last December drew to a close, the world's most powerful companies listened attentively to Pope Francis as he reiterated his call for "a new dialogue about how we are shaping the future of the planet".

A unique convergence of trends now provides an unprecedented opportunity for vested interests to make a coordinated, concerted push towards the goal of a universal digital identity for each individual.

The CEOs of the major corporations knew exactly what the Pope was talking about. For some time, a number of disturbing developments had been casting doubts on their confidence in their ability to continue doing business as usual in the medium term. Brewing popular unrest, evident by the rise of populism and forceful state responses throughout 2016, had been making them anxious about their commercial security.

As if this wasn't enough, there is another storm brewing on the horizon: the dark clouds of teetering currencies, fragile monetary unions and the last days of the dollar as a global reserve currency make for some worrisome economic weather reports. This isn't new: for years, various institutions have been pooling their best talents to come up with an answer, a means of weathering the coming worldwide financial turbulence with the right survival tools.

One such tool looks very promising: blockchain technology, suitable for much more than just money transfers. Small projects are being tested, and the best-known technology, Bitcoin, is already operational and receiving good reviews. Despite some reports to the contrary, many governments and banks are responding optimistically to its potential and are busily exploring ways to put the technology to their own advantage.

However, this hasn't put the large corporations at ease. Far from it. There is still the problem of trust. Banks and other financial institutions like Paypal, Visa and SWIFT serve as middle men in money transfers. These middle men, in turn, are vulnerable to government decisions and economic vicissitudes. Companies resent the cost and slow processing of their money transfers in this murky and cumbersome legacy system, which seems to be on the verge of collapse. As if the Richard Bransons, Jeff Bezoses and Eric Schmidts didn't have enough to worry about already! If only blockchain technology could be implemented under the watchful eye of a trusted neutral party, then it would be the perfect partner to a global financial identity for all of mankind: the means of payment to match the account system. (In the Czech republic, implanted RFID chips are already being used for individuals to make contactless transactions with Bitcoin.)

Finally, there is one more factor occasioning the drive towards a global financial identity at this time. The great reaches of the third world, with its riches and vast potential for growth and profit, has increasingly been a thorn in the sides of these big boys and girls. The more rural an economy, the more independent the people are — trading in cash or barter, choosing their own methods for agriculture, business, or healthcare and education. Reaching these untapped markets would provide companies with vast commercial possibilities. But without a centralised digital economy, companies are powerless to plug into this potential for profit; a worry for corporations at a time when the West's population is aging and in some cases becoming poorer and more sceptical of corporate motives.

A key consideration which may not be evident to Western readers is that in many developing countries, immunisation rates far outstrip birth registration takeup. This is what largely explains the corporatist drive for universal vaccination: it provides the best entry point for universal digital identity.

So, when the Pope showed himself to be on the corporations' side in seeking a solution, his invited audience was more than happy to pledge in response:

We are committed to bringing the rural poor into the 21st-century economy[,]

they may well have been thinking: "This pontiff is marvellous — His Holiness really understands our predicament!" So they continued in like vein:

More than 2 billion adults in emerging economies do not have access to basic checking or savings accounts, with women [and] the rural poor more financially excluded than others. Refugees fleeing violence cannot begin to rebuild their lives without access to banking.

Still, there remain obstacles to achieving the World Bank's goal of Universal Financial Access (UFA) by 2020. Among these are the ongoing challenges of servicing hard-to-reach populations.

Here is what we propose: Jump start underserved markets. Companies will support initiatives to produce digital identities for the one-fifth of global citizens who lack one. [bold type added]

The big players put this undertaking right at the top of their list of priorities, because a digital financial identity will be the key to receiving (or delivering) their products: vaccines, schools, clean water and agricultural products such as GMO seeds.

But the corporations are not the only organisations with an interest in a digital identity system that promises to give them more elbow room in the markets. Banks and governments are thinking along similar lines. Take the United Nations and its ID2020 collaborative, "[...] creating a hub to harness the world's best digital identity technology to provide a legal identity for all":

The United Nations has recognised that identity is a necessary and fundamental human right and has included "provid[ing a] legal identity for all, including birth registration by 2030" as one of its sustainable development goals. (UN target 16.9)

It is notable that from 2017 to 2020, the work of the ID2020 collaborative will focus on two areas: developing and testing the best technological solutions for digital identity; and working with governments and with existing, established agencies to implement these solutions.

And the banks have their own version: A Blueprint for Digital Identity — the Role of Financial Institutions in Building Digital Identity [PDF].

Extraordinary developments. There remains one question: who might be able to unite all these diverging interests and efforts? Who is able to curry enough favour and generate enough trust to be accepted as the Lord Protector and Patron of all Global Citizens? Perhaps that is the reason why Pope Francis has shown such an interest in the touted benefits of the digital global identity project.

The source for all three quotations above is the executive summary of the United Nations' ID2020 "concept for public/private partnership".

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