Just the other day, I was reading a series of reports by Boston Consulting Report (BCG). Normally, such reports use statistics like a drunk using a lamp-post - for support than illumination. But these reports are an exception! The report on India particularly
fascinated me. According to BCG, the next big opportunity for banks is the 'billion ' unbanked customers in countries like China, India, Brazil and of course Africa. India alone has more than 135 million housholds that are outside the purview of the banking
sector. Thus far, there has been no real effort to reach out to this segment as a profitable segment. They have always been patronised and the banks have been condescending than anything else. But now with the changed scenario and 'sub prime' wallop, banks
have to review their outlook towards the massive unbanked.
One of the biggest issues for a bank in any country is the issue of identification of an individual. Most countries don't have a social security ID or a voter's ID (well, in a lot of countries you don't get to vote!) that a banker or any other authority
can use to identify its customers. How does the banker know it is dealing with Mr or Ms XYZ and continue its relationship with the customer?
Well, I have an answer - formalize the MOBILE number and use it as Citizen ID! We all know that mobile phone penetration is the biggest story of 2007. For e.g. India added 52 million NEW mobile connections in October! China and Russia also continue to
add new connections that exceed the population of a lot of countries. So, what can we do - simply ride on the mobile telephony structure and use mobile numbers for identification. Of course, to get around issues like change in owner, selling your connection
needs to be addressed. But governments can simply pass regulations to treat the mobile number and its issuance to run like a Citizen Id system. Not only will this save the governments the huge cost of putting a citizen ID system in place but also ensure that
citizens always carry their ID with them! The SIM card is already a secure Chip ; so the security side is taken care of. The bureacrats may turn around and say - why should we use something not created by the State? My response would be; in this age of outsourcing
and public-private partnership, it is time for governments to wake up and take off the blinkers.
So, bankers and MSP operators; go for it - promote your mobile numbers as a secure citizen ID. It is safe, secure and also a great social equalizer!! Despite what the Dan Browns of the world may say; your number is no different from my number!.
Food for thought - bon appetit!