Why a digital economy framework is vital

The combination of biometric and AI has smoothened authentication process, while enhancing security


WITH the Covid-19 crisis pushing the adoption of technology to levels previously unseen, government agencies now need to align with each other to develop a digital economy framework.

NEC Corp of Malaysia Sdn Bhd MD Chong Kai Wooi said the framework should include securing all data, including biometric information, to convince the public that the transition to the digital economy will be seamless.

He said the pace of regulatory framework updates is one of the key factors to drive adoption of innovative digital technologies, such as biometric and artificial intelligence (AI).

“Beyond the law enforcement agencies, which have long adopted biometric and AI technologies, governments, enterprises, and small and medium enterprises across all industries are green and brown fields to be tapped on.

“In the government’s National Fiberisation and Connectivity Plan 2 and 5G plans, there will be more industry use cases to support and accelerate the adoption of the latest biometric and AI technologies,” he told The Malaysian Reserve (TMR).

Hence, NEC Corp strongly advocates digital inclusion which promotes the values of safety, security, efficiency and equality.

Going forward, the focus will be surrounding the government’s push for a digital economy where biometric and AI technologies are key.

Technology-based solutions for identification have been around for many years, particularly in law enforcement.

Chong pointed out that the combination of biometric and AI technologies has smoothened the authentication process, while enhancing security.

Many businesses around the world have also adopted the biometric authentication solution over the traditional method of pin codes, identity (ID) cards and even documents associated with access control protocols, he explained, Electronic Know-Your-Customer (e-KYC) is a wholly online process used by financial institutions to verify and identify their customers.

“e-KYC requires a digital ID which uses biometric and AI technologies to facilitate remote customer registration for financial services and digital signing of official documents.

“There is a strong push by the government for a national digital ID, which will be used by government and private sectors, to meet the needs to identify individuals accessing e-services and authenticate other secure transactions,” Chong said.

NEC Corp is a subsidiary of NEC Group which is based in Japan. It provides end-to-end independent integrated information technology solutions and services, multimedia products, total display solutions, telephony, network system and communication products.

Zoloz Co Ltd GM Dr Jidong Chen believed that e-KYC has a huge potential in South-East Asia and hoped the group can empower the user to enjoy easy-to-use, reliable and secure ID verification service in the digital world.

He said South-East Asia is one of the world’s largest and fastest growing regions. However, more than 70% of the region’s adult population remain either underbanked or unbanked.

This unbanked population in South-East Asia presents an imperative for banks to make their services more inclusive, he explained.

“The benefits of adopting e-KYC by financial institutions in both developed and developing countries are clear from a commercial and regulatory standpoint.

“With the Covid-19 pandemic acting as a further catalyst for contactless services, it is more pertinent than ever to leverage technology to alleviate poverty through financial inclusion,” he told TMR.

Zoloz, an Ant Financial Services Group’s company, offers biometrics-based solutions to replace PINs, passwords and offline identity verification.

Last year, TNG Digital Sdn Bhd, a local e-wallet partner of Alipay, introduced Zoloz e-KYC function to its mobile wallet app, allowing customers to open an account and verify their identities simply by scanning their national identity card and taking a photo.

Besides TNG Digital, Zoloz is also working with banks and other financial institutes in Malaysia to comply with the latest e-KYC policy from Bank Negara Malaysia through its advanced e-KYC solutions.

Zoloz has already implemented its technology and services in 10 markets like the Philippines, Indonesia, Malaysia, Thailand, Bangladesh, Hong Kong and Macau, and has gotten approval from the regulators of these markets in the past years.

“We hope more markets and regions, including their financial institutions, can realise the value of e-KYC in financial inclusion.

“The challenge is the Internet and identity infrastructures in some areas are not well developed. For instance, many people do not have smartphones and in some markets, there is not a unified identification card or document for most people,” he said.

For example, the World Bank estimates over 1.7 billion individuals are currently financially excluded, with nearly one in five attributing the situation to a lack of necessary ID documents.

“Thus, to promote e-KYC in these areas is also a challenge for us,” he added.