Page 15 - FIGI: e-KYC use cases in digital financial services

2 INDIA 2�1 India Stack
Building on the Aadhaar functionality, the India Stack
In India, the Aadhaar program, provides a unique has open and programmable capabilities with four
identifier (a random 12-digit number) to the resi- distinct layers:
dents. A DFS provider can verify a customer's iden-
tity using the customer's Aadhaar number and a • A presenceless layer where a universal biomet-
fingerprint and/or iris scan. DFS providers rely on ric digital identity allows people to participate in
the results of Aadhaar authentication without further any service from anywhere in the country.
identity verification, thus simplifying the customer • A paperless layer where digital records move
due diligence process for them. with an individual's digital identity, eliminating
In September 2018, the Supreme Court of India the need to collect and store massive amount of
ruled that a section of the Aadhaar Act related to pri- paper.
vate sector use of e-KYC was unconstitutional. This • A cashless layer where a single interface is avail-
resulted in private sector access to e-KYC services able to all the country's bank accounts and digi-
not being offered. e-KYC use for public services, such tal wallets.
as social assistance payments, was not affected, and • A consent layer, which allows user data to move
continued to be available. To allow use of e-KYC by efficiently and securely, based on user consent
the private sector, a regulation was adopted in 2019 and control.
allowing particularly, DFS providers and telecommu-
nication companies, to use e-KYC. Each layer of the stack is built on a specific technol-
ogy intervention as indicated below:

Table 1: India Stack

Layer Feature Technology intervention
Presenceless Unique digital biometric identity Aadhaar authentication
Rapidly growing base of paperless systems with bil-
Paperless lions of artefacts Aadhaar e-KYC, ESign & Digilocker
IMPS, Aadhaar Payment Bridge (APB), Aadhaar
Game changing electronic payment systems facili-
Cashless Enabled Payment Services (AEPS) & Unified
tating transition to cashless economy Payment Interface (UPI)
Corresponding public APIs under open API pol-
Consent Provides privacy data sharing framework
icy

The data flowing through the various layers of • Aadhaar as a financial destination – so send mon-
India stack can be tracked digitally, providing trace- ey to Aadhaar number instead of Bank Account/
ability. Thus, India stack has ushered in a new era IFSC Code using NPCI's UPI platform.
in delivery of services adhering to the principles of
governance viz., being participatory, transparent,
accountable, responsive, effective and efficient. 2�2 Unique Identification Authority of India (UID-
Building on India stack to deliver financial ser- AI)
vices/facilitating digital payments. The authority responsible for issuing the Aadhaar
number is the Unique Identification Authority of
• Aadhaar as an ID authentication to enable elec- India (UIDAI). UIDAI has been tasked with three key
tronic KYC and opening of customer accounts at functional processes: enrolment, identification, and
very low cost/friction. authentication. Through an extensive network of
• Aadhaar as an ID authentication for transactions. enrolment agencies, UIDAI collects the demographic
(name, date of birth, gender, address) and biometric
(fingerprints, iris scan and photograph) information

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