Innovation is necessary to take government organizations to the next level and overcome today's challenges. Current macro trends are creating increased pressures for innovation, requiring the application of technology to assist policy makers in developing responses and solutions to the areas of corruption, efficiency, security and the citizen experience. Among the biggest challenges facing the public sector are the debt, deficit and other fiscal pressures that have built up in the wake of the recent financial crisis. Citi's goal is to help our clients manage their budgets more effectively to achieve best-in class financial management. Mobile money and identity management are two innovative solutions that are assisting our clients reach these goals.
The mobile phone has the power to economically transform the lives the world's poorest people by giving those without bank accounts, the ability to move, pay, collect and store money on their mobile devices. The mobile phone gives the "unbanked" the ability to participate in the global economy. In addition to financial inclusion, mobile money helps governments in emerging and developed markets become more efficient and transparent, as mobile phones are increasingly becoming a way for people to pay for public services such as parking and transportation.
According to a recent Citi GPS Report, Upwardly Mobile: An analysis of the Global Payments Opportunity, there are two facets of mobile payments - the developed market opportunity which is to provide a secure, feature-rich product for smartphone users, and an emerging market opportunity where financial inclusion is the initial use-case driver. An example of the mobile phone as a driver of financial inclusion is M-PESA, a mobile money transfer system in Kenya. M-PESA allows customers without a bank account to make payments and complete other basic banking transactions. Although this kind of mobile payment does not require users to have direct dealings with banks, banks are heavily involved in the mobile payments ecosystem, operating in the background to process funds and safeguard balances.
Mobile payments provide governments and international donors with greater transparency, insight and influence over the disbursement and usage of payments such as salaries, social benefits and pensions. Additionally, mobile collections enable governments and corporates to streamline their operations and remove cash from their processes, thus reducing fraud and improving efficiency.
Proof of an individual's identity is a fundamental issue for governments globally. Governments need to control physical access to their buildings and facilities as well as logical access to their data, systems and processes. They also need to have reliable methods to determine and protect their employees and citizens' identities. The combination of biometric technology along with traditional forms of documentary or photographic identification will transform the government identity management framework. Biometric technologies are automated methods for identifying or authenticating the identity of a person, based on their unique physiological or behavioural characteristics that cannot be changed or mimicked, i.e. finger prints, iris scans, voice recognition, etc. Paper-based documentation is prone to identity fraud, counterfeiting and potential terrorist exploitation; however, biometric technology can help minimize these risks. Furthermore, biometric technology enables rapid electronic authentication, which not only provides greater convenience, but also requires fewer resources with a lower risk of error.
As a result of the added benefits, local and national governments are integrating biometric technologies into public identification processes. For example, along with photographic identification, governments are using biometrics on passports, identity cards and facility access cards. The US government's Personal Identity Verification (PIV) standard has created a mandatory consistent framework to streamline identity management across US government agencies. Utilizing these identity cards allows government agencies to consolidate their vendor / contractor credentials to reduce their costs. This system improves identity management, eliminates escort needs and enables the government to reduce / eliminate temporary badges. By implement such programs, governments can reduce administrative costs, standardize credentials, mitigate risk from a regulatory / technology perspective and improve their overall identity management.
New technologies and innovations create an opportunity for public sector officials to improve their current processes and systems through solutions such as mobile money and biometric technology. By working with banks, public sector entities can implement these solutions to enhance their processes and help make their governments and organizations more efficient and effective.