I-Corps Teams: Leaf Global Fintech: Virtual Banking Beyond Borders

Vanderbilt University, Nashville TN

Investigators

Abstract

The broader impact of this I-Corps project is to enable an underserved market?refugees?to access formal financial services through a mobile device and blockchain technology. Through this project, refugees will be able to avoid carrying cash while escaping conflict, retain access to savings typically lost during flight, and create an economic identity to establish themselves in a new country. The results of cross-border digital financial services include: (1) refugees will experience increased access to funds, which positively impacts long-term health and education; (2) refugees will be less dependent upon host states and foreign aid; (3) cross-border trade will increase, thus bolstering regional security. The commercial potential of this project is large, as refugees have been proven a viable market for commercial banking but have historically been excluded from the formal financial system. Of the 68 million people forcibly displaced around the world in 2018, 60% have access to mobile networks that provide the infrastructure for offering digital financial services even without a smartphone. New blockchain technology makes cross-border financial services lucrative with amounts previously too small to be profitable, thus opening the market to individuals at the bottom of the pyramid. This I-Corps project seeks to address how to deliver virtual financial services in low technology environments using existing mobile networks and consumer behavior patterns. The technology utilizes mobile money, a USSD-based system common in emerging markets, as the cash-in and out point for customers. Transactions are stored on a transparent (yet de-identified) digital ledger that securely tracks assets across borders and fiat currencies. Blockchain technology presents new ways of meeting the financial needs of vulnerable populations, while a low-tech front-end ensures adoption in environments in which distribution is challenging. Customers use a custom USSD/SMS interface to create an account, send money for safekeeping, check balance, and disburse funds across borders. Customer identity is managed using biometrics such as facial and vocal recognition and a PIN. This type of cross-border, digital savings product integrated with USSD and blockchain has never been offered. The platform reliably links identity and provides the unique combination of asset storage and transport across borders. The digitization of cross-border money movement could reduce theft and corruption by up to 80%. This project seeks to prove that virtual financial services offered through mobile network infrastructure can bring new access to populations historically excluded from the formal economy. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.