building digital infrastructure for a billion

BUILDING DIGITAL INFRASTRUCTURE FOR A BILLION

AADHAAR & INDIA STACK

@pramodkvarma

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1.2 Billion people

<3% pay income tax

70% under $2 / day

400 Million migrants

Photo credit: Hoang Long Ly, 2014 CGAP Photo Contest

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1 Billion mobile connections

350 Million Internet users

200 Million social media users

India is rapidly going digitalSource: various publicly available documents

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$50 Billion every year!

2.5% of GDP

India spends huge amount as direct subsidies ...

Source: various publicly available Govt documents

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20-40% leakage

1% of GDP wasted

... but, leakages are massive

Source: various publicly available Govt documents

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Tackling large societal problems

Pipe vs Platform

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Large scale social problems require

"unbundling of the problem"

and creation of "shared digital infra"

as "public good" on top of which

"innovative solutions" can be "assembled"

to meet diverse contextual needs.

Internet GPS

OS Smartphone

Maps Payment

Cloud Infrastructure

Disruptive solutionsride on

shared infrastructure

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Aadhaar & India StackA set of digital infrastructure platforms as public good to

allow solutions to be assembled by the ecosystem

NameDoB/AgeGenderAddress

Mobile/Email

1234 5678 9012

Foundational

Minimal

Unique

Lifetime

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Aadhaar - Identity for a billion

A ubiquitous digital identity infrastructure for all

Source: http://uidai.gov.in

Source: http://uidai.gov.in 11

950 M

600 M

300 M

100 M

50 M

1085 M

Currently at 1.15 B

At peak, processed ~2 M enrollments a day!

Currently processing ~1 M enrollments & updates a day!

1 Billion in 5½ years

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Aadhaar - online identity services

Enabling online authentication and e-KYC to a billion people

ELIMINATES

PHYSICAL PRESENCE

Are you who you claim to be?

ONLY a yes/no answer

Anytime anywhere

ELIMINATES PAPER BASED

KNOW YOUR CUSTOMER

ONLY done with authentication

No more fake documents

Anytime anywhere

Authentication Electronic KYC

Source: http://uidai.gov.in

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Now at 600+ M a month

25+ M a day

The Aadhaar system can authenticate 100 M transactions per day!

7+ Billion authentications in 6 years

Source: http://uidai.gov.in

eSign - Digital signature for a billion

Application Service Provider (ASP)

1.Online request for Digital Signature

2. Request for PoA/PoI Data

4. Online Instant Digital Signature

Issued

3. PoA/PoI Through eKYC

eSign Service Providers (ESP)

UIDAI (for Aadhaar

eKYC)

Residents needing to sign a

document

Interoperable, Open API based, multi-provider, digital signing protocol, legally protected under IT Act

14Source: http://cca.gov.in

Interoperable, Open API based, multi-provider, documents & data exchange framework

Digital Locker Framework

Source: http://dlai.gov.in

Validation & Assurance

Virtual Payment Address

Minimal Issuer/Acquirer Cost

Ubiquitous - Bank accounts

Easy Immediate Payments

Timely Notification

Unified Payment Interface

Push & Pull Payments

@Every one with a bank account can send money to any bank account in India!

Real-time postingFunds are not locked!

Immediate notifications of the payment made

Payments can be initiated by payer or payee.

Real-time validation of the account and balance

No need to disclose account information.Allows account portability, enhances privacy.

Smartphone replaces card and PoS machine!!

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Inter-operable, multi-provider instant money exchange framework

Source: http://npci.org.in

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● Structured consent artifact and log system

● User controlled data sharing, data flow, and data retention

● Separation of data and consent flows

● Consistent with current legal frameworks

Electronic Consent Architecture

Data Consumers (Banks,Credits Providers etc)

CONSENT Collector

Data Providers(Banks,Telco,Hospitals,etc)

Consent Flow Digitally signed consent artifact

Data FlowSecure data sharing based on consent

Framework to give control of digital footprints back to people

Source: http://dlai.gov.in

Aadhaar Auth Aadhaar eKYC

eSign Digital Locker

Consent Framework Unified Payment

India Stack isan open infrastructure

built by Indian Government which unbundled

identity, signature, money exchange, document & data exchange allowing apps and solutions to be built easily

Mobile, Internet, GPS, Cloud18

GOVT SUBSIDIES

BANKING, INVESTMENTS

& CREDIT HEALTHSKILLS &

EDUCATIONCOMMERCE

India is also building other layered platforms

1. Goods & Services Tax Network (GSTN)

2. Bharat Bill Pay System (BBPS)

3. Electronic Toll Collection System (ETC)

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GSTN will process

~5 B invoices a month across

7+ M businesses!

1 B utility bills amounting to

$60+ B a month

BBPS source: http://indiatoday.intoday.in/story/bill-payment-industry-all-set-to-rock-in-services-sector/1/180344.html

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India will go from data poor to data rich nation ...

… and individuals and small businesses will be empowered to use their digital footprints as their "digital asset" to get

access to credit and other services.

Social

Commerce

Payment

Education/ Employment

Healthcare

Digital Platforms

Tax / Business

Consent Framework

Access

Inclusion

Empowerment

Source: UIDAI, NPCI, TRAI Website, Conversations with NPCI, eMudhra, Deity officials

287 MJan Dhan Bank Accounts

Jan Dhan

1.15 BEnrolments

Aadhaar

350 MSmartphones

Mobile

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7+ BAuthentications

Aadhaar

600 MAuthentications/month

500+ M unique ids

340 MeKYC in 3 years

> 1 M /day

399 MAPB Accounts Linked1.2 B Txns worth 4.5 B USD in 3 years

> 3 Me-Sign in 15 months

4.8 MDigilocker users

1+ BUploaded Docs

10M+UPI Txns in 3 months

~400 M USD transacted a month

1060 MPhone numbers

Impact of Aadhaar & India Stack

Large Bank

Retail Customer Onboarding - Reimagining the User journey with Aadhaar, eKYC, e-Sign and Digital Locker

Source: McKinsey & Company - Financial Services and Digital practices

Turnaround Time down from

6 days to 1 hour

Reduced Drop Offs First Time Right> 99%

Branch Capacity

Freed up by 10%Back Office

No longer required23

Large Asset Manager

Source: McKinsey & Company - Financial Services and Digital practices

Transaction Time down from

4 hours to 2 mins

Reduced Operational cost Improved customer retention

Statement Processing time down from

1 hour to < 1 minCapacity

Freed up for lead generation

Reimagining Channel Management - Digital Transformation with Aadhaar eKYC

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Large Telecom

Source: Conversations

On boarding time Time down from

1 day to 4 mins

Saved Rs 15 / SIM issued Saved 15,000 Trees

Onboarding Rate

50M in < 2 monthsCustomer Experience

"Walk Out Working"

Customer Onboarding - Digital Transformation with Aadhaar eKYC

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Elite (11M HHs, 4%)>$37k annual gross HH incomeWealthiest class in India

Affluent (26M HHs, 9%)$18.5k-$37k annual gross HH incomeTop 6-10% of highest income HHs

Aspires (66M HHs, 23%)$7.4k-18.5k annual gross HH incomeMiddle Class- Looking to trade up & aspire to upgrade (Disposable Income - 60%)

Next Billion (103M HHs, 500m, 36%)$3.3k-$7.4k annual gross HH incomeNew Consumers- HHs have some disposable income (33%), total spend $1 T

Strugglers (80M HHs, 28%)<$3.3k annual gross HH incomeHHs with the majority of spend on basic needs such as food, shelter, power & water

India 1: New Consumption PatternsProcess Reinvention

India 2: Unlock Bharat

India 3: Reduce Benefits Leakage

Changing India - one India at a time!

Inclusion

10X reach

10X effectiveness

Banking at scale

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Presence-lessPaperless

Data drivenAlgorithms driven

Network model

Mobile Becomes The Bank!

Investment at Scale

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To increase market size 10x or 50x and bring in mass inclusion, cost of doing business must be brought down!

Source: NCAER-CMCR survey, www.openthemagazine.com, discussions with ScripBox

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Millions of Borrowers

Data DrivenAlgorithm Driven

Consented Data SharingEnabled by Mobile

Electronic ContractsDigital Payments

Credit Marketplaces

Thousands of Lenders

Digital Footprints

Credit at Scale

Skilling at scale

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COMMERCE

TRANSPORTTOURISM CONSENT ARCHITECTURE

DIGITAL LOCKERCOMMON IDENTITY

SKILLS

EXPERIENCE

Networks and aggregators driving mass skilling in several domains

Portable education, skill, and experience records

"India has, without question, made the largest technological breakthrough of any nation in living memory. Its technology

advancement has left even Silicon Valley standing. India has built the world's first national digital infrastructure, leaping at least

two generations of financial technologies and has built something at least as important as the railroad was to the UK or the

interstate highways was to the US." - Raoul Pal

https://twitter.com/RaoulGMI/status/835847520920162304

Primary Education

Health Providers

Logistics

Flow-lendingSavings

Books, TV

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Aadhaar & India Stack provides a

robust foundation to build

innovative solutions to solve

India’s hard problems!

Formalization of Economy

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Thank You!

linkedin.com/in/pramodkvarma

@pramodkvarma