Sam Maule, Carlisle & Gallagher Consulting Group

A chance encounter with a young homeless girl in Istanbul forms part of one start-up’s ambition to create fintech opportunities for those truly in need.

At Sibos 2015’s Innotribe session on ‘Leveraging modern payment platforms for accelerating social impact’, Sam Maule, emerging payments practice lead at Carlisle & Gallagher Consulting Group, begins the talk with his very personal story and how ‘he walked on by’ and didn’t initially help.

This ‘life-changing’ event in Turkey made him wake up to the disparity between the rich and poor, the effects on migrants, and how that can all be changed.

Now he doesn’t walk on by and works with the Canadian start-up Digital Finance Institute (DFI) to provide fintech opportunities for migrants, refugees and the homeless. As of June 2015, the UN estimates there are 60 million refugees around the world – and the DFI wants to do something for them.

Maule and Christine Duhaime, founder of the DFI, explain how their organisation can help resolve this crisis; and how the audience and financial institutes around the world can also do their bit for the greater good.

Patience for prosperity

The DFI targets ‘financial inclusion’ and believe that migrants provide an ‘uptick for GDP’ – their ‘impact is positive’. Maule cites research by the Wall Street Journal and the American thinktank the Brookings Institution to back these claims up.

Maule gives Lebanon as an example, where 25% of the population are migrants. Initially the migrants will have no money, he says, but if an organisation, such as the United Nations High Commissioner for Refugees (UNHCR) gives them some help, the economy will rise in the long term. This cash infusion does provide an economic boost, but patience is required.

Other arguments about the effect of migrants on health systems, public services, potential tax rises, social cohesion and anything else that has been circulating in the national newspapers were not discussed at the event. It could be argued there was no time. The DFI is on a positive mission and doesn’t want to get bogged down in any negative issues.

The DFI’s focus is on cash disbursements and how to get these to the individuals. Duhaime says there are ‘multiple obstacles’ – such as no identification, lost or stolen cash, or even an expired passport.

Identification is a major problem – she recognises that people need to be verified if financial transactions are to take place and to avoid any anti-money laundering activities. But some NGOs (non-government organisations) waive requirements for identification, as they believe the humanitarian need outweighs any concerns over security.

Duhaime says ‘carrying cash around for NGOs is dangerous – as people know they’re coming’ and the risk of being robbed is real.

Therefore, NGOs and charities are looking at effective ways to get the money in, and to those who need it.

The world speaks

Maule, Duhaime

Christine Duhaime, founder of DFI, and Maule take audience opinions

The talk was opened up to the audience, who (by a quick straw poll) came from every continent apart from South America.

One audience member from India says his country had the same problem with cash disbursement – and ‘they didn’t want any hands in-between’ taking the money. The ‘poor people’ in question didn’t have any ID and so the Unique Identification Authority of India (UIDAI) was set up in 2009 to help.

The UIDAI set up an ID program whereby fingerprints or photos might be linked to a mobile phone. (Despite poverty, most people can afford to buy a cheap mobile phone.) With this system in place, they could receive ‘assets’ – meaning money.

As Maule and the audience interacted, he concedes the issue of creating these fintech jobs is ‘chaotic’. He sees it as a ‘spider web or like a Jackson Pollock painting’. It looks complicated and without rhyme or reason, but there are solutions and patterns if people look hard enough.

With that in mind, Maule conducted a group exercise for the audience. Here, the DFI wanted to get feedback on a ‘modern payments platform’.

One audience member says the transfer and use of cash in developing countries is ‘always subject to corruption, yet the mobile phone is everywhere’. His group’s idea is that when people buy phones they have to provide biometric data to the shop. The shop also needs to ensure that only one phone has one set of data attached, to ensure the person is genuine – otherwise the shop will be fined. The group believes this threat of a cash penalty on a shop will ensure some measure of success.

Another idea consisted of providing ATMs that will dispense 1 or 2 dollars – a ‘super-low cost network’ – and banks could start trialling it now. One group proposed a ‘marketplace’, either on the web or a noticeboard, where refugees can be matched to people who can help or give them clothes and so on.

One person pointed out that companies like Google and Facebook are already looking at providing connectivity inside the refugee camps. It’s something that Mark Zuckerberg has discussed in the past.

‘Audacious goals’

The DFI welcomed all these ideas and the audience’s ability to formulate them in a short space of time. In return, it outlined its three ‘audacious goals’.

The first, called ‘Project Iran’, seeks to help the 1 million refugees inside Iran. The DFI is looking to work with UNICEF to ensure these children don’t become financially excluded. The DFI says they are ‘trying to work on the mechanics’ of this project.

Next is a ‘refugee fintech lab’. This is seen as ‘more complicated’ and envisions bringing fintech problems to the refugees and asking them to devise solutions. Maule says ‘the next Steve Jobs could be in a camp’. The DFI says if this internet connectivity (that Google and Facebook have talked about) becomes a reality inside camps, then it’s workable.

The last one is to ‘dream big’ and construct a ‘refugee bank’. The idea is to provide payment solutions on a global level for the refugees. The DFI says it has to do more work on the infrastructure, costs and getting a licence.

Time and money

The DFI will release a ‘white paper’ on 1st November that examines financial inclusion and refugees for those interested in learning more. It adds it has attended 3 conferences so far and is looking at more events to get its message out to even more people.

The DFI is asking all the fintech companies at Sibos and beyond to help.

Maule ends the speech by asking the audience ‘what’s your story?’ and ‘what will you do when you walk out?’

The choice is yours.

By Antony Peyton

by IBS Intelligence
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