Latest / Leaders In Payments / Financial Inclusion Series: Catharina Eklof, Chief Commercial Officer at IDEX Biometrics | Episode 261

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Financial Inclusion Series: Catharina Eklof, Chief Commercial Officer at IDEX Biometrics | Episode 261 · Leaders In Payments

• 0:01
  Speaker 1: Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape.
• 0:06
  Speaker 1: We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments.
• 0:14
  Speaker 1: We will also hear stories from our guests about their journeys to the top the exciting thing is that the women are very open and IDEX products.
• 0:22
  Speaker 2: So coming with a biometric card actually lowers up barrier.
• 0:25
  Speaker 2: Women do not have to remember their pin and they feel that it's very secure.
• 0:29
  Speaker 2: They have been reticent to use contactless, something that we in the western world, in America or Europe, there's over 80% of people using contactless and tap to the POS every day.
• 0:41
  Speaker 2: In Bangladesh, the women, if you think of their disposable income, contactless transaction can represent as much as 10%, so they're very reticent.
• 0:49
  Speaker 2: So this tool coming in and helping them and combining it that they can see their transaction in their mobile phone, that they can see what am I spending, it has an educational and a peace of mind factor.
• 1:09
  Speaker 3: That was Katarina Ekloff, the chief commercial officer of IDEX Biometrics, and she is my special guest on this episode, episode 261 of the Leaders in Payments podcast, and I'm your host, Greg Myers.
• 1:19
  Speaker 3: This is the third episode in our series on financial inclusion.
• 1:23
  Speaker 3: Every year, we dedicate four or more episodes to highlight what leading companies in our industry are doing to help serve the underserved, unbanked and underbanked.
• 1:31
  Speaker 3: Katarina and I had a very interesting conversation about how biometric authentication can help the financially excluded, which could be those suffering from dementia, having literacy challenges or impaired vision.
• 1:44
  Speaker 3: We also discuss other use cases for the technology, as well as countries that are getting it right, meaning making a significant impact.
• 1:51
  Speaker 3: We've got a great episode ahead, so let's get started.
• 1:54
  Speaker 3: Hi Katarina, Thank you for being here and welcome to the Leaders in Payments podcast, especially this special episode during the Financial Inclusion Month.
• 2:07
  Speaker 2: Hi, greg, thank you very much.
• 2:09
  Speaker 2: It's really great to be there.
• 2:11
  Speaker 3: So let's dive in.
• 2:12
  Speaker 3: If you don't mind, tell our audience a little bit about yourself, maybe a little personal and professional background, as well as your role there at IDEX Biometrics.
• 2:20
  Speaker 2: I am a payment node, I would say so.
• 2:23
  Speaker 2: I have more than two decades worth of working with tech companies in payments in different formats.
• 2:28
  Speaker 2: My background is, of course, business but having worked at MasterCard, taking digital payment solutions and new digital service across the world in both I would say financial inclusion countries, all the way up to the most contemporary world today.
• 2:43
  Speaker 2: So I was part of the MasterCard team bringing out contactless across the world, starting with France and then moving it all the way out to African markets.
• 2:53
  Speaker 2: And today I lead IDEX Biometrics, which is a global technology company, and I serve as the chief commercial.
• 3:00
  Speaker 2: So I drive and work with my team on developing the value proposition for our customers and the banks and the end consumer, and we also drive out the market expansion across countries.
• 3:12
  Speaker 2: Idex is operating globally today, so we are live in more than 10 countries.
• 3:18
  Speaker 3: Let's dive deeper into Idax Biometrics, so tell our audience exactly what the company does.
• 3:24
  Speaker 2: Idax Biometrics is the global technology leader in fingerprint biometrics, so we offer authentication solutions across payments, access control and cyber digital identity and authentication.
• 3:37
  Speaker 2: So our code based solution is really on-card authentication.
• 3:41
  Speaker 2: We unlock simplicity, we bring convenience, security, peace of mind and seamless user experience to the world.
• 3:49
  Speaker 2: Rather than just proving your identity with something you know, which can be a password, or something that you have, like your phone, you can here prove your identity securely by something that you are, which is your fingerprint.
• 4:03
  Speaker 3: And you mentioned, it's a global company.
• 4:06
  Speaker 3: Where is it headquartered?
• 4:07
  Speaker 2: Idax is headquartered out to both Boston and New York in America and Farnborough just outside London, and we are a company of around a hundred engineers extremely specialized into both developing system software which is based on algorithms and cryptology, and then we have hardware engineers who's working on actually developing the best material to make this sensor and very specific sensor technology for it to be able to be used in high security environments, like with military and governments, and also the security encryption, which takes more than two years to develop a really solid algorithm.
• 4:46
  Speaker 3: And what, would you say, makes Idax unique in the marketplace?
• 4:49
  Speaker 2: That's a great question.
• 4:51
  Speaker 2: I will say two things.
• 4:52
  Speaker 2: So, first of all, idax has literally changed the way biometrics work on a form factor like Cod, so most people are used to biometrics when you pass airport control, so you go through security and you put your thumb on this reader that everyone is used to.
• 5:09
  Speaker 2: That's what's called an image reader.
• 5:11
  Speaker 2: So it takes a photograph of your fingerprint and then it's loaded onto the computer of the untrained governmental entity.
• 5:18
  Speaker 2: That's just an image that's taken.
• 5:20
  Speaker 2: Idax biometrics is what's called capacity.
• 5:22
  Speaker 2: It means that we take an imprint of your finger when you put it on the reader and actually convert it into a digital print of your fingerprint, and then we take around a hundred data points that we actually extract.
• 5:36
  Speaker 2: So your fingerprint becomes a mathematical formula that is then encrypted and hashed and then stored in the chip on the card.
• 5:45
  Speaker 2: So very, very different technology than what you're used to when you think of biometrics.
• 5:50
  Speaker 3: Yeah, I think people who see that technology think it's very simple, but it's really not.
• 5:55
  Speaker 2: No, it's quite advanced and it's probably one of the most advanced technologies that exist today, because on the card, you basically have the algorithm.
• 6:02
  Speaker 2: When you, greg, you go out and you shop or you want to access something, every time you put your thumb on the card, the card is learning, so it registers your fingerprint over and over again and that makes it matching with what's in the chip, and by doing that you create your own library, that's them being stored and hashed and encrypted.
• 6:22
  Speaker 2: It means you can only access your data on the card, so your fingerprint data never leaves the card, it's never stored in the cloud or it's never stored on any bank server or any data server.
• 6:34
  Speaker 2: You just communicate to the recipient this is Greg, I am Greg, and then the data stays on the card.
• 6:41
  Speaker 3: Okay, we're going to pivot a little bit now and we're going to talk about financial inclusion, which is what this series is all about and I wanted to start with those that are actually financially excluded from the current payment system.
• 6:52
  Speaker 3: So these could be groups that are suffering from dementia, have literacy challenges or impaired vision.
• 6:58
  Speaker 3: Some estimate this could be up to a third of adults globally talking about that technology.
• 7:03
  Speaker 3: So how can this technology, in this area of biometric authentication, help with the challenges that those groups face?
• 7:10
  Speaker 2: Biometric authentication.
• 7:12
  Speaker 2: It really means that every person can accurately and securely identify themselves by themselves and, like you say, in countries with high rural population and illiteracy, relying on passwords and paperwork is a challenge.
• 7:26
  Speaker 2: And when people are not yet able to read or interpret legal documentations and, in many cases, don't even have access to a bank account or governmental service, they are really far out.
• 7:39
  Speaker 2: And if we're talking today 2022, idex is focusing on one of our core markets, which is Bangladesh, and don't know how familiar you are, but many people think about Bangladesh as the country with famine, and it's interesting because Bangladesh is the country that receives most governmental aids in the world today, I would say almost 7 billion.
• 8:03
  Speaker 2: What is the doctor?
• 8:04
  Speaker 2: Because, on the other hand, is the country in Asia which has the strongest growth, so it outpaces countries like india, indonesia, filipines.
• 8:13
  Speaker 2: In Bangladesh, the government is working with something called smart bangladesh, and what does that mean?
• 8:18
  Speaker 2: Well, they wanna bring on sixty million unbanked people onto the financial system and, in the same time, so these people, like you said, they're financially excluded.
• 8:29
  Speaker 2: Today, the country has one hundred eighty mobile phones on a population of one hundred sixty, so you have a dichotomy of an underband, I would say illiteracy rate of around thirty percent and, in the same time, they're very digital.
• 8:43
  Speaker 2: So with this, the government is working on digitization to smart bangladesh, and this is where I'd come in.
• 8:50
  Speaker 2: So we're working with three banks.
• 8:51
  Speaker 2: Today I'm actually bringing the biometric payment card to these different and the other part of rural areas.
• 8:59
  Speaker 2: Right, we are where we use to Metro cities, where we have good connectivity and access to banks.
• 9:04
  Speaker 2: In many of these countries where you have financial illiteracy and underbank, they live out in the countryside, so it's very unstable networks and even bank branches are hard to get to.
• 9:16
  Speaker 2: So by having your Biometric card, which is actually a very straightforward and easy intuitive experience, the work that we're doing with the bank is proving that this is a very relevant product.
• 9:28
  Speaker 3: Do you typically see it?
• 9:30
  Speaker 3: The country itself, the government of the country, is really putting together a program, or are there ever Private entities that try to put together a program for something like this?
• 9:41
  Speaker 2: No, so very relevant question.
• 9:43
  Speaker 2: So in most countries, great, it's a combination.
• 9:46
  Speaker 2: So you see and I'll continue a little bit on bangladesh, but you can see it as a blueprint in bangladesh is the telco, grammon phone and also the big bank.
• 9:54
  Speaker 2: So you have back bank, you have dutch banglaban, you have instant limited.
• 9:59
  Speaker 2: All of these have some of the world's most sophisticated financial inclusion program and Big system.
• 10:05
  Speaker 2: That's world known.
• 10:06
  Speaker 2: That's called be cash.
• 10:07
  Speaker 2: Companies are working.
• 10:08
  Speaker 2: So it's a combination.
• 10:10
  Speaker 2: So these banks and entities get financial support.
• 10:13
  Speaker 2: What about?
• 10:14
  Speaker 2: And grumman, for example?
• 10:16
  Speaker 2: It's actually linked to norways.
• 10:17
  Speaker 2: Quite nice for us and I would say it's a very tight collaboration because of course, the government wants these unbanked to come into the system and be Include in a way that they can use both private and government services.
• 10:32
  Speaker 2: So the banks come with a solution and the government underpins with regulations.
• 10:37
  Speaker 2: So we, for example, when we go out, what can you work with the central banks and work with the banks, and we meet with the officials from the different departments that are focused on the digitization.
• 10:49
  Speaker 3: Okay, that makes a lot of sense.
• 10:50
  Speaker 3: So let's specifically talk about women, especially in developing countries.
• 10:55
  Speaker 3: Research is shown that women control an estimated twenty trillion and consumer spending, and that continues to grow.
• 11:01
  Speaker 3: Yet forty percent of women worldwide lack access to financial services.
• 11:06
  Speaker 3: So how can this technology that we're talking about, such as biometrics, how can it help them?
• 11:12
  Speaker 2: First of all, it's really interesting phenomenon and I prefer to bangladesh, I think it's a good country.
• 11:17
  Speaker 2: So there, just for everyone to know, of the bank customers, seventy percent are men and only thirty percent are women.
• 11:24
  Speaker 2: So you can say how is this possible, right?
• 11:26
  Speaker 2: Well, many times this is an environment with a very traditional patriarchal society.
• 11:32
  Speaker 2: So the women are in their money and they give it to their husband.
• 11:35
  Speaker 2: So this is something that the banks are working very closely and, I would say, in a very culturally aware Fashion.
• 11:42
  Speaker 2: So they're setting up environment specifically for women.
• 11:45
  Speaker 2: They're organizing women financial educational programs.
• 11:50
  Speaker 2: The exciting thing is that the women are very open and products coming with a biometric card Actually lowers up barrier.
• 11:57
  Speaker 2: Women do not have to remember the pin and they feel that it's very secure.
• 12:02
  Speaker 2: They have been ready, sent to use contactless, something that we in the western world, in america or europe, there's over eighty percent how people using contactless and tap to the pos every day.
• 12:13
  Speaker 2: In my life, the women if you think of their disposable income, contactless transaction can represent as much as ten percent.
• 12:20
  Speaker 2: So they're very red.
• 12:21
  Speaker 2: So this tool coming in and helping them and combining it that they can see their transaction in their mobile phone that they can see what am I spending.
• 12:30
  Speaker 2: It has an education and peace of mind factor that they really embrace and it's fantastic to see this women.
• 12:38
  Speaker 2: So right now we're testing.
• 12:39
  Speaker 3: They are very receptive and open to give feedback and enthusiastic alright, as we continue to talk about the use cases for biometrics specifically related to the fingerprint biometrics, can you give us some other use cases?
• 12:52
  Speaker 2: When we talk about, I would say, underserved communities, another group that we were talking about, digital exclusion.
• 12:59
  Speaker 2: These are people visually impaired, and also dementia.
• 13:03
  Speaker 2: You mentioned it in the beginning, right, society is going to do so.
• 13:06
  Speaker 2: Many of the banks are pressing on everyone that you should literally only pay with your mobile.
• 13:11
  Speaker 2: It becomes quite hard.
• 13:12
  Speaker 2: Either you need to have a voice recognition where you actually need to have.
• 13:17
  Speaker 2: So if you look at the whole p u s environment in retail, it's now going to completely flat acceptance environments, right.
• 13:24
  Speaker 2: So you as a visual impaired is very hard because you can't even see.
• 13:28
  Speaker 2: So it sounds, maybe it's simple, but it is quite complex.
• 13:31
  Speaker 2: So you, for example, great, are putting in something called the payment enablement act because they are seeing that the associations for both Dimension blind and just to give a start.
• 13:42
  Speaker 2: So there's over two point two billion people that are actually visually impaired.
• 13:46
  Speaker 2: So that's a lot.
• 13:47
  Speaker 2: I think we're over seven billion people, right, so it is not a small issue.
• 13:50
  Speaker 2: So here there have been several tests we will share more when it's launched where we're actually testing both the I'm at the activation and also the biometric usage, and there again it removes stress and reassuring that they actually can do the transaction without having to actually put their fingers on the p?
• 14:12
  Speaker 2: U?
• 14:12
  Speaker 2: S.
• 14:13
  Speaker 2: The other thing with these two groups right.
• 14:14
  Speaker 2: So they are quite exposed to both fraud and theft.
• 14:17
  Speaker 2: The dementia there use to handing over their card.
• 14:20
  Speaker 2: Here it's also a barrier if someone comes and tries to fraud a person with dementia.
• 14:26
  Speaker 2: May?
• 14:26
  Speaker 2: We're in dialogue with an association of relatives to patients with dementia.
• 14:30
  Speaker 2: This is one of their greatest concern and the person throughout.
• 14:34
  Speaker 2: They can be fraud because they can still talk.
• 14:36
  Speaker 2: Hopefully they cannot remember the pin, but at least you can do contact transactions.
• 14:41
  Speaker 2: So when you put your fingerprint on the card, this cannot be given to anyone else.
• 14:46
  Speaker 2: The only one that can use the call is the person who registered the fingerprint from the beginning.
• 14:52
  Speaker 2: Your card cannot be copied and your fingerprint cannot be copied because everything is stored and hashed, as I said.
• 14:59
  Speaker 2: So it creates a barrier and a seamless and safe experience also for these groups.
• 15:06
  Speaker 3: That makes a lot of sense.
• 15:07
  Speaker 3: There's a lot of factors and a lot of players, and you've mentioned some government entities, banks, companies like iDex that have to come together to make this happen.
• 15:16
  Speaker 3: Is there an example of a country that you feel like they're getting it right or they're making a significant impact in this area?
• 15:23
  Speaker 2: I would say india is the front runner in the world because india started with biometrics as far back as 2005 and all the banks are sitting with fingerprint database.
• 15:35
  Speaker 2: But that's where it becomes a problem.
• 15:37
  Speaker 2: So the indian people Are all used to using fingerprints and have embraced it and are using it, but unfortunately there are today for the shoes because, I said, it's not the capacity system.
• 15:48
  Speaker 2: So the indian government and the indian banks are very interested in bringing on biometric payment cards and, just to give you a little bit of a notion, there is about one billion payment cards in circulation in india and again, it's mirroring the narrative that I spoke about in Bangladesh.
• 16:07
  Speaker 2: And india is ahead because they have put subsidies and government support to people for over ten years.
• 16:13
  Speaker 2: They did the time in the new problem remember moody had the activity cash and now the next thing that's coming is really putting on card authentication with biometrics and these are big banks that want to do this is some of the top banks in india, then the other.
• 16:28
  Speaker 2: We have a great example from mexico where mastercard and social benefit and it's called red.
• 16:35
  Speaker 2: They call them payment solution provider.
• 16:38
  Speaker 2: They did regional trials with biometric card for mexican field workers and that was a state benefit program.
• 16:45
  Speaker 2: So the field workers was, you can imagine, don't have much fingerprints left, would get their benefits on the card and then use them as they shop, and the fantastic thing was that there was no false rejections.
• 16:57
  Speaker 2: So they have their card and the payment went through.
• 17:00
  Speaker 2: So for the mexican workers, this was a big step forward.
• 17:04
  Speaker 3: That's fascinating that the technology would still work, even though the fingerprints may not be.
• 17:09
  Speaker 3: I don't know what the right term is, that good?
• 17:12
  Speaker 2: or erased.
• 17:12
  Speaker 2: We can say so.
• 17:13
  Speaker 2: It's all about the debt.
• 17:15
  Speaker 3: Okay, again it goes back to my comment earlier.
• 17:17
  Speaker 3: The technology to me is just fascinating that you guys have created and are developing and making better and better.
• 17:23
  Speaker 3: It's just fascinating how it works.
• 17:25
  Speaker 2: We are an R&D company that now are actually taking this to deployment.
• 17:29
  Speaker 2: The world of technologies are out of Cambridge and what's I think is interesting is this is deep learning on the card.
• 17:36
  Speaker 2: So people in general talk about a.
• 17:38
  Speaker 2: I am here is like you have a mini computer on the card, but it's exactly totally unhackable.
• 17:45
  Speaker 3: Yeah, that's the other challenge with payments, as you well know, is the fraud challenges that we all face.
• 17:51
  Speaker 3: Where do you think this market is going and how are you gonna continue to help this community of vulnerable people that we're talking about?
• 18:00
  Speaker 2: the good thing is that there is big interest around it and there are plenty of entities that are actually focusing on biometrics.
• 18:07
  Speaker 2: So you have the world food program it's in progress of rolling out biometric cards.
• 18:12
  Speaker 2: You also have you and hc are you have mastercard working on this across the globe.
• 18:19
  Speaker 2: You have the world food program, which is a subunit of the united nations and the health organization in united nations.
• 18:27
  Speaker 3: so big world organizations are bringing this out, I would say, as an integrated part of the racing financial inclusion, but also establishing trust for this very exposed Groups of people we've covered a lot of ground so far, obviously about I'd ex biometrics, a little bit about your background, and then obviously, you have a wealth of knowledge of what's going on globally around the underserved, underbanked, unbanked, vulnerable communities that we've been talking about.
• 18:59
  Speaker 3: So is there anything else you wanted to add before we wrap up the show.
• 19:02
  Speaker 2: Yeah, I think there's one point and thanks for raising it, so I'd ex is also really we're at the starting point of establishing our e s g agenda right, so make sure that the solution that we bring out, that it's sustainable and also that we work in a very conscious fashion to drive both sustainability and diversity.
• 19:22
  Speaker 2: Both we are business, but also how we operate.
• 19:25
  Speaker 2: We're young company.
• 19:27
  Speaker 2: We really look to support and grow women, so it's also for us as a company an opportunity to meet this entities that are working with women, supporting women.
• 19:38
  Speaker 2: So it's for us both inspiring and exciting to say that we can really bring our solutions and make a difference.
• 19:44
  Speaker 2: We are a hundred twenty people team and we're operating across plus ten locations around the world and we have more than twelve languages.
• 19:53
  Speaker 2: So we are a self Very small global company, but that really looks to make a difference and bring this ingenious solution.
• 20:01
  Speaker 2: I really want to say it's engineering magic at work break and really ensuring that people can benefit and do safe and seamless payments.
• 20:10
  Speaker 3: Yes, thank you for sharing that.
• 20:11
  Speaker 3: And, caterina, I want to thank you for being on the show today.
• 20:14
  Speaker 3: I know your time is very valuable, so thank you so much for being on the show.
• 20:18
  Speaker 2: Great, really nice.
• 20:19
  Speaker 2: Thank you for having me and wishing you a nice day.
• 20:22
  Speaker 3: Thank you, and to all your listeners out there.
• 20:24
  Speaker 3: I thank you for your time as well, and until the next story.
• 20:28
  Speaker 1: Thank you for joining us this week on the leaders in payments podcast.
• 20:31
  Speaker 1: Make sure you visit our website at leaders in payments dot com where you can subscribe to the show and where you'll find our show notes.
• 20:38
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