We are at a point where Nigeria’s financial inclusion drive is at its highest, digital commerce is growing in leaps and bounds and the mobile money financial model is recording resounding successes in the region. Furthermore, Mobile Network Operators (MNOs) have never been better positioned to further empower the mobile digital ecosystem and spur more economic growth, and impact more lives than now. To make these contributions, as well as benefit significantly from them, MNOs need to provide access to subscriber identity and usage data that they possess.
The resulting positive impact, directly or indirectly, on the entire ecosystem and of course MNO revenues, would be almost instantaneous, yet with little or no CAPEX obligations from the MNOs. The heavy reliance on mobile technology as an economic driver on the African continent naturally makes MNOs one of the key facilitators of the digital economy in the African continent. The utilisation of subscriber data within a regulated framework like that of the mobile identity processes would boost economic activity from direct investments, innovation and job creation, in turn leading to higher rates of financial inclusion, e-commerce-driven prosperity and catalyse digital transformation.
Mobile identity refers to the development of online authentication and digital signatures, where a mobile user’s SIM and other mobile network attributes can be utilised as an identity tool. Mobile identity can be used for legally binding digital authentication and transaction signing for banking, payments, corporate and e-commerce services.
Clawback revenue
Leveraging mobile identity services could allow MNOs to generate a new stream of revenue from the Over-The-Top (OTT) service providers, who until now, had been making huge incursions into MNOs’ voice, SMS and data revenue streams. However, now MNOs can be better regarded as the powerhouse source for mobile digital authentication attributes and serve the OTTs as well, even at a premium. This is in contrast to what prevails now where OTTs are collating and storing this data for their exclusive and commercial use, with little or no revenues going to the operators.
While OTTs’ traditional revenue streams include services such as Voice over Internet Protocol (VOIP) and social media messaging, MNOs have the opportunity to monetise the “raw materials” utilised by OTTs to generate income, which previously was not the case.
To put these opportunities into perspective when considering mobile financial services or e-commerce and mobile identity, Juniper Research forecasts that digital wallet users will exceed 4.4 billion globally in 2025, from 2.6 billion in 2020. Additionally, Juniper estimated that there was a $27 billion e-commerce transaction fraud loss in 2020 and that this will reach over $52 billion in 2025, as the e-commerce ecosystem expands. With such statistics, there is an obvious need to protect the digital ecosystem, doable at virtually no cost in comparison to the huge losses being incurred.
Protecting the data
While relishing the potential impact that MNO data can have on the ecosystem, MNOs must still ensure data protection compliance by protecting the privacy rights of their subscribers within the mobile identity framework. Key to this is the enforcement of the General Data Protection Regulation (GDPR), or locally, the Nigeria Data Protection Regulation (NDPR), as well as other local interpretations of the data protection law to the fullest extent to protect subscribers. MNOs must closely monitor industry participants to ensure that the best, fair and transparent practices are adopted and used at every opportunity in the service value chain. In addition, MNOs must mandate verifiable consent management by service providers and data processors.
Operators also have a key role to play in enhancing mobile security and the user experience for the country’s growing subscriber base. As the traditional owners and custodians of mobile data, MNOs must ensure that the core ingredient of the mobile identity value chain – subscriber data – is accurate, updated, relevant and uncompromised. If the base data on which the mobile identity value chain is built is inaccurate, confidence in the solution is eroded and the whole industry will suffer.
Consumable formats
Furthermore, MNOs should make this data accessible to the industry in consumable formats that can be built upon or utilised by technology companies and service providers. MNOs must also ensure the data is secured to prevent breaches and leaks that may cause damage to data subjects and industry.
MNOs should be at the forefront of attaining and enforcing compliance standards which in turn will trickle down to the ecosystem as a whole. They need to work with regulators to create and maintain governance policies to catalyse the industry as well as protect the data subjects.
Ideally, operators should partner with reputable industry experts to leverage their global experience while working and excelling in various global mobile identity markets (each with their own unique requirements), to create a business model that abides by global best practice in the industry. Such industry experts would place a premium on its brand reputation and equity enough to avoid any compliance lapses, sharp practices, or unethical actions. In addition, these industry experts must have a proven successful track record in data monetisation, innovation in service delivery, and significant compatibility with the telco service provider business models.
Martin Effiong is Senior Operator Partnerships Lead at Infobip