Development of a global policy model for digital identity and e-KYC

Many financial institutions in developing economies continue to face challenges in the implementation of digital identity and electronic know-your-customer (e-KYC) frameworks. These challenges stem from the absence of standardized, practical guidance that blends global best practices with local realities. While we find proven approaches across jurisdictions, they are often fragmented and not tailored for replication or scale. Bridging this gap requires structured, evidence-based policy models that support country-specific implementation.

MSC supported the Alliance for Financial Inclusion (AFI) in designing a global policy model to address this need. We began by developing a research and survey framework to assess the status of digital ID and e-KYC across AFI member institutions. This was followed by in-depth stakeholder interviews and focus group discussions with selected members and external experts. Insights from this process shaped the development of a policy model that codifies successful practices, policy lessons, and implementation strategies. The draft underwent a consultative review process with AFI members and was formally endorsed by the membership council.

The final model provides a standardized yet flexible framework for countries to guide the implementation of digital ID and e-KYC systems. MSC presented the draft to central banks and financial regulators through AFI-led workshops, where expert feedback further strengthened the document. Published in September 2021, the policy model now serves as a strategic reference across the AFI network. The AFI also supports its members through targeted capacity-building initiatives to drive adoption and implementation.

The Alliance for Financial Inclusion (AFI) commissioned the project.

Development of a regional policy framework on e-KYC and e-ID for the Eastern Europe and Central Asia Policy (ECAPI) Initiative

Across Eastern Europe and Central Asia, limited access to legal identity holds back the advancement of financial inclusion. The existing national ID systems often lack the digital capabilities needed to support secure, interoperable electronic know-your-customer (e-KYC) solutions. The broader digital identity ecosystem in the region remains fragmented and underdeveloped, with few region-specific frameworks to guide coordination, policy alignment, or cross-border implementation. With this gap, a regional policy framework was increasingly needed to strengthen digital identity and e-KYC systems and align them with international standards and best practices.

MSC supported the Alliance for Financial Inclusion (AFI) in developing a regional policy framework on e-KYC and electronic ID (e-ID) for seven Eastern European and Central Asian (EECA) countries: Armenia, Belarus, Russia, Mongolia, Kazakhstan, Tajikistan, and Uzbekistan. We began by conducting a desk review of existing research and documentation to understand the current digital ID and e-KYC landscape in these countries. This was followed by an in-depth analysis of regulatory and policy frameworks, which included FATF AML/CFT compliance.

MSC held consultations with the AFI management team and the expert group. We conducted a comprehensive survey among member countries in the ECAPI initiative to assess their status, challenges, and opportunities. We also carried out a follow-up survey to explore supporting infrastructure, policy environments, and financial inclusion conditions. Based on these insights, MSC developed research tools and analysis frameworks that informed stakeholder consultations and helped shape the policy framework.

The engagement resulted in a detailed situation report that highlighted key policy gaps and regulatory approaches, and enabled a deeper understanding of the state of digital ID and e-KYC implementation in the region. The regional policy framework, launched in January 2022, was designed to support EECA countries to strengthen their systems, harmonize standards, and advance digital financial inclusion. The framework now serves as a reference for regional collaboration and national-level reforms.

The Alliance for Financial Inclusion (AFI) commissioned the project.

Increasing domestic resource mobilization (DRM) in Nigeria through the DPI approach and smart payment principles

Nigeria continues to face significant challenges in mobilizing domestic resources, despite its strong economic potential. The country lags behind regional peers, such as South Africa, Ghana, and Senegal, on the e-Government Development Index, particularly in digital connectivity, online services, and human capacity. Its tax-to-GDP ratio remains low at just 10%, well below the African average of 16% (2020). 

The Nigeria Governors’ Forum (NGF) sought to close these gaps and launched the Digital Domestic Resource Mobilization (DDRM) workstream. The initiative intends to enhance fiscal management and improve public expenditure efficiency across all 36 Nigerian states by using digital public infrastructure (DPI). It identifies gaps in each state’s digital ecosystem and provides tailored roadmaps for DPI adoption based on digital maturity and institutional readiness.

MSC supported the NGF through the design and delivery of a detailed assessment of the DPI and public financial management (PFM) landscapes across Nigerian states. With a mixed-methods approach, MSC engaged with state-level officials and NGF stakeholders to gather insights into ground-level operations. The team developed customized readiness assessment tools to evaluate each state’s digital infrastructure, such as digital ID systems, data exchange platforms, and payment mechanisms, and key PFM components, which included single sources of truth, digital fund flows, and real-time processing systems.

MSC applied a scoring methodology to categorize states into high, medium, or low digital readiness tiers. Based on this, the team identified both areas of strength and opportunities for improvement. These insights informed the development of phased, state-specific roadmaps to guide DPI adoption and strengthen revenue mobilization and public service delivery. The roadmaps provided practical and contextual recommendations aligned with each state’s capacity.

The project deepened engagement between the NGF, revenue departments, and ICT agencies to build a clearer understanding of state-level digital ecosystems. The assessment tools and maturity frameworks created a foundation for tracking progress in DPI and PFM implementation. MSC also facilitated capacity-building workshops to support effective adoption of DPI among state actors.

The Nigeria Governors’ Forum commissioned the project.

The National Action Plan (NAP) for a biometric-enabled digital identity system in Zambia

Zambia faced delays in the implementation of a biometric-enabled digital identity system, which hindered progress in digitizing public service delivery. Although the government had long planned a national electronic ID under the Ministry of Home Affairs, progress was limited. Financial Sector Deepening Zambia (FSD Zambia) sought to address this issue and partnered with the Smart Zambia Institute (SZI) to develop a comprehensive National Action Plan (NAP) that would accelerate the rollout of digital identity infrastructure across the country.

MSC worked closely with the SZI and FSD Zambia to design a detailed and actionable roadmap for the national digital ID system. The team provided strategic advisory support, which focused on project governance, enrollment strategy, technology infrastructure, and software architecture. MSC conducted a cost-benefit analysis to identify key cost drivers of the national identity program and assessed the current system’s design to recommend architectural improvements. The project also involved benchmarking Zambia’s identity system against other national ID programs to align with international best practices.

The Smart Zambia Institute officially declared the National Identity Program a Mission Mode Project, which signaled a heightened commitment to accelerate its implementation. As a result of the roadmap and advisory support, the Government of Zambia launched biometric registration through its Integrated National Registration Information System (INRIS). To date, 7 million digital IDs have been issued and 1.3 million biometric records collected, marking a major milestone in Zambia’s digital transformation journey.

FSD Zambia and the Smart Zambia Institute commissioned the project.

Support to the Unique Identification Authority of India (UIDAI) to improve the usage of Aadhaar

India’s digital identity landscape has advanced significantly in recent years. Today, Aadhaar serves as a foundational layer for digital public infrastructure and has seen widespread use in government-to-person (G2P) transfers and other services. Yet, its adoption for offline authentication and face authentication remains limited. Furthermore, fragmented ecosystem engagement, complex user experiences, and a lack of actionable data insights have hindered progress. These challenges restrict the UIDAI’s ability to adapt to evolving user needs and use emerging technologies.

To support the next phase of Aadhaar’s evolution, the UIDAI engaged MSC to identify innovative use cases, strengthen citizen-centric service delivery, and integrate global lessons to enhance Aadhaar’s impact and reach.

MSC provided strategic advisory and research support across several key areas. The team developed the strategy for the UIDAI’s Innovation Sandbox and supported its implementation to promote innovation in authentication and e-KYC use cases. MSC conducted a comprehensive assessment of Aadhaar’s offline usage, public awareness, policy environment, and operational challenges. In addition, MSC reviewed grievance management mechanisms and citizen engagement channels to identify areas for improvement.

The project included a study of the authentication ecosystem, which included Authentication User Agencies (AUA) and Authentication Service Agencies (ASA), to identify pain points in onboarding, transaction processes, and policy compliance. MSC also analyzed Direct Benefits Transfer (DBT) delivery to understand user experience and governance practices, and benchmarked the Aadhaar system against global digital ID systems.

The project contributed to significant improvements in Aadhaar usage and innovation. Aadhaar-based face authentication transactions increased fourfold and reached more than 154 million monthly authentications by May 2025. The number of entities using Aadhaar or e-KYC rose by 10%, which added approximately 550 new users. The UIDAI launched the Innovation Sandbox and SDK BioChallenge, which created a platform for ecosystem players to test and benchmark new Aadhaar-based solutions.

The UIDAI also began publishing Aadhaar-related datasets on the Open Government Data Portal to support global research. As part of its global engagement strategy, the UIDAI collaborated with 10+ countries and institutions, which included Tanzania, South Africa, ID4Africa, and MOSIP, to share lessons and insights from Aadhaar.

The Unique Identification Authority of India and the Gates Foundation​ commissioned the project.

Development of the UIDAI playbook on “Unlocking face authentication”

India’s expanding digital public infrastructure has been built around Aadhaar as a foundational ID. While Aadhaar-based fingerprint and iris authentication have enabled widespread access to services, they also face challenges in accuracy, usability, and accessibility, particularly for the elderly, manual laborers, and persons with disabilities. 

Such challenges have created a strong case for alternative and inclusive authentication mechanisms that ensure continuity of access for all without compromising security or consent. In this context, face authentication offers a nonintrusive, contactless, and device-agnostic alternative that can enhance both user convenience and system resilience.

MSC supported the Unique Identification Authority of India (UIDAI) to showcase the growing need for face authentication and highlight its role in the ecosystem. We helped the UIDAI develop a strategic playbook titled Unlocking Face Authentication. MSC conducted extensive stakeholder consultations across sectors, engaging with the UIDAI, banks, financial institutions, telecom companies, government agencies, and technology service providers, to shape the insights and recommendations for the playbook. We also mapped end-to-end workflows to integrate Aadhaar-based face authentication into existing service delivery models across key domains, such as financial services, telecom, governance, and social protection.

We captured sector-specific challenges and enablers, developed process integration blueprints, and identified high-impact use cases where face authentication could improve user experience, particularly for the elderly, differently-abled, and digitally underserved populations. 

This engagement reflected MSC’s deep expertise in digital ID systems, inclusive service design, and public infrastructure enablement, and our capacity to translate complex technology into inclusive, policy-aligned frameworks that can catalyze real-world impact at scale. The playbook also contributed to positioning face authentication as a scalable and interoperable solution within India’s broader digital identity stack—one that now supports 55 million+ transactions monthly. 

The Gates Foundation commissioned the project.