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Social media could be used to identify refugees, says fintech founder

A panel at the Innovate Finance Summit 2016 discussed ways refugees could access funds, including digital identities, smartphones and peer-to-peer applications

Social media could provide refugees with the official identity they need to cross borders and register for aid, said John Edge, founder of identity systems provider ID 20/20. 

Edge told the Innovate Finance Summit 2016 1.5 billion people in crisis exist without a recognised legal identity, and many no longer have access to official documents.

Edge pointed out that social media services, such as Facebook, look after billons of registered identities every day, and could act as an “at-scale” means for people with no officially issued identities.

"You have – for the first time ever – non-government organisations that are issuing identities used in everyday life," Edge said.

"We are still governed in our mindset that identity is issued centrally.”

Edge said that – while charities strive to provide those in need of aid with an identity and access to funds and banking – they don't have the same resouces as banks to scale systems.

"Centralised innovation is fundamentally flawed when you're trying to solve these problems." Edge said. 

But where technology is emerging to help those in need, money laundering precautions make it difficult, according to Christine Duhaime, co-founder and executive director of the Digital Finance Institute.

To prevent money laundering precautions from standing in the way of helping refugees, Duhaime claimed they shouldn’t apply for low-risk solutions such as those dealing with small transactions made by refugees.

Peer-to-peer applications

Without changes to legislation surrounding anti-money laundering, Duhaime said certain technology to help refugees would "grind to a halt".

One way around this could be to encourage the development of peer-to-peer giving applications, as many of those without a bank account still have a smartphone. 

"If they had access to finance or money of any type, they could pay rent," Duhaime said. 

"The world is getting smaller and we need to think of providing humanitarian aid at an individual level."

Duhaime said banks needed to have a financial inclusion department, to cater for those without existing accounts.

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Ensuring financial inclusion 

Around two billion people in the world do not have access to a bank account, but as Kosta Peric, deputy director of financial services for the poor at the Bill & Melinda Gates Foundation, pointed out: "That does not mean they don't transact.

“They actually lead complicated financial lives.

"An economy that includes everyone benefits everyone, because that's clearly what digital financial inclusion is all about."

Peric said banks and other organisations should see the “unbanked” as an opportunity for business, because people using smartphones and applications such as smart wallets are constantly performing large volumes of tiny transactions.

Distributed ledger technology

"We are seeing the elegance of single, frictionless, super-scalable and secure financial services that will open this," Peric said.

Peric suggested distributed ledgers could contribute to financial inclusion, as they act to securely store a list of transactions made.

"Distributed ledgers are a convenient way to financial inclusion, as a way to implement safe distributed systems without friction,” Peric said

Peric said ensuring a lack of friction is essential to making sure a system works, and merchants need to be on board with tools as well. Governments should get involved too, he said.

"If you digitise money it's very important for people to be able to use it to transact every day," Peric said.

"There will be different business models that come out because of the scale the technology provides."

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