Balázs Némethi - Financial Inclusion & Disenfranchised Identification

Perfect. Good morning, everyone. And welcome to the second day of the conference in my presentation. I'm going to go back to what we started yesterday on, on talking about the different problem that we have in identity and, and bringing away the conversation from enterprise identity and, and serving the top 1% of the population and focusing on someone who, who are very often left behind. And if everything works right, the presentation will start with a short video that I believe will help to understand of who we are going to focus at refugees.

And, and just a few numbers about, about what the problem is in the EU. Today. There are as many refugees as two Manhattans. I believe many of you have been there. It's a very big business city. There is around close to 3 million refugees hosted in EU countries, but the problem is a lot bigger. There are as many refugees globally, as many people in Australia, which used to be as jail city, but, but these people are actually on the move. They are many cases stateless.

They have to, they have to be on the minority side of every population they, they arrive at, but they are also part of an even bigger group. The forcibly displaced persons who are, might be internally or, or anyway for forcibly have to be moved from where they originally live at. And the number of this is that every hundredth person on the word is today. Forcibly display. This is what yesterday was mentioned. It's there are more people for days today than following the second word war. And as you could see on the video, this is just going to get worse because we are facing climate change.

But my presentation is about financial inclusion in relation to identity. And today in 2017, there are every force people out of every person out of seven and four and a half person is unbanked. That's ruin 2 billion people because identity is important to actually access finance because without a legal identity or without an accepted identity, or without any proof of your identity, you are non-existent. And as a non-existent person, there is no way you can access today's financial ecosystem.

The word bank summarizes that the financial inclusion is that it's not only an ability to actually access finance, but a way to create prosperity and dignity because people are the best way to know what they need and access to finance can enable them to store their wealth and deploy it in ways that they decide is the best for them. You many have heard of the sustainable development goals developed by the UN many question, are they good? Are they bad?

But there is one important role is that identity is important in many of these goals, because identity is a core layer that if people are not identified, there is no way they can be Veed for services and support that they would receive other other ways. So for example, if a children is not identified, he's not going to be missed from school, neither from education, neither from healthcare or food supply, because he's not on the map. So providing identity to people can really help to create equity and help to re reduce the gap between the top 1% and the rest.

Now, a few weeks ago, I had the opportunity to attend the cent a G 20 event that focusing on financial inclusion. And, and I came to a realization that why we know that there are gov organizations such as the ver bank, or U N H C R, who, who is facing many should with financial inclusion or the virtual program, or many of these supernational organizations who are cross working globally, helping people in many different ways.

When it comes to financial inclusion, central banks also have a very big focus on solving their country's own financial inclusion, but actually there are borders and the borders create different legislatures and, and rules around what can be done in a country. So when we come back to the original topic of refugees, we realize that once someone crosses a border, they will be of, they will be presented to a different problem of being financially excluded because the government, the central bank has different development goals, different goals to solve the problem or, or not at all.

So once you are, Oh, sorry. Yeah, that too. So once you are crossing a border, you are just screwed again. So there is no 65 million forcibly displaced person. When we come to financial inclusion, there is 1 million in one country and then another million in another country. And they are always going to be such a small minority who might leave the country that many central banks that no ways to actually deal with this problem.

Luckily, there are very good opportunities to solve financial inclusion, such as, from that started in Kenya. It's an airtime mobile operated banking solution. When people can send money to each other as a text message, it's been very successful, but it's missing the identity layer. And while it's actually solve financial inclusion in the country, currently, it has a problem of growing abroad because there are many prepaid cards in the system where people can just upload money and cross and send it in the system.

So without the identity layer, it can't grow to an international level and they can't tolerate to send money as a remittance service because they just don't know the source of the money, or there is ATAR, and I'm not going to go into the identity part of ATAR, but the effect on financial inclusion, because since the lunch of ATAR, there is 350 million people opened a form of bank account in India. This is by far the most effective financially inclusion solution. And even if it's not all the way led by the government, it is actually a solution.

And I don't know how many of you have heard of as Tony. I hope many, definitely many of you, the very important thing is that recently Jack ma the founder of Alibaba has announced that they are going to support the Estonia program to allow people all around the world who has identity to open a business in Estonia, because it's just a lot easier to allow countries, allow people in another country to open a business that make the country's government digital and smooth. So people in the local country can open very fast businesses. And this is because we are going towards globalization.

A globalization that basically creates migration and migration is something that I believe that at least half of the room is not from Germany because we came in here and we have the opportunity to actually go out and shop because we have a bank card because we were able to prove our identity, but there are other people who are crossing borders and they could be among us, but they can't go and buy anything because they can't have a bank account.

And, and this is what we are looking at of how it could be solved to avail people to the financial ecosystem at some level, so that they can have opportunities. This is a picture from my home country, Hungary. This is how it looks actually. Now there are two board, two lines of fans around the country or at the south border, because we don't want these people to enter our country. And we say that, yes, we are saving Europe from the influx of refugees, but this is just nonsense. Hungary actually is facing a really big number of shortage on, on work.

And, and most of the people who are coming are a lot well educated than those are in Hungary. And this is just like a side note why this project actually started. So who we can trust the video asked, and, and we can trust something generally, which is verified, which is known, which has a big brand name, which is accepted by many. And then we will trust it because we just know that many other people already using it and trusting it. So we should have no fear using such a solution.

And by creating an identity system, which is not only local, but a global identity system that can be verified by not only governments, but agencies that are working with these people and local organizations so that everyone can understand that using this sort of identity is not only a one time off show, but this is actually a global solution that can be created and accepted by many organizations. That's our goal. We are creating, Takao a banking solution that would enable people to access a form of finance. It's an identity system that can be created by anyone using your digital footprint.

And since we are focusing on the refugee crisis in Europe, starting with Europe, we know that they have smartphones.

So they have a very strong digital footprint that we can use as the base of their identity and using other organizations and method to actually verify this identity on the way as they move by collaborating with different organizations and methods to actually verify further and further until the point when they receive a status and they can be part of a society in their destination country, we use severity and we use a level of blockchain that will be later described by Danielle, from Microsoft in two presentations from now of how entity can be achieved.

We use governance because while all these organizations will be able to attest to this one identity, we don't want these organizations to be able to access each other's documents. So there will be one identity management belonging to the user.

However, the different governance will enable these organizations to use the same identity system, but different parts of it, what they added into the identity and interoperability, because we, we understand that this will be an identity system that they start when there is a problem. However, when they arrive, there will be a different digital identity providers provided by a different company. So we want to enable these people to use the same digital identity and enter the 21st century when people will have a digital identity very soon. And I'm open for questions.

And I came here because this is a very hard task. We are dealing with regulations. We are dealing with global organizations whose speed is comparable to a glass year, and we are a little startup. And we have been achieving a lot during last year, since the journey actually started on this conference. And the more help we can have, the better we can solve this problem. So anyone is willing to help us. You can find me during the day or at the hashtag, which is at NAL. Thank you very much, Very ambitious project. Thank you.

What are the technical requirements for people for participating in that, in that banking infrastructure? Let me call it oh, financial infrastructure. So it's going to be a smartphone access.

This is, this is what we brought as a line because smartphones can create enough digital data that we can use as a base. Okay.

And, and our initial focus is in Europe where, where everyone really has a smartphone among refugees. Okay. And we also believe that in the global level, a lot of people we'll have smartphones earlier in their hands with access to internet and or GPS than identity. But what do you do with the there's one problem with crossing borders, where you lose access to the wireless network? Right. So we don't need constant access. The app can store data. It has offline functionality. It will have, it's not ready. Okay. Just Okay. Very good. Thank you. Thank you very much.