This chapter considers the various requirements for identification in the financial sector and the evolution in the nature of identity from analogue to digitised to digital. We argue that technology presents an opportunity to solve this challenge through the development of digital identity infrastructure and related utilities. The establishment of such utilities for digital or electronic identification requires addressing design questions such as registration methods, data availability, and cross-jurisdictional recognitions. As with any reform, a balance needs to be reached to ensure the objectives of efficiency and financial inclusion are not achieved at the cost of market integrity and financial stability.

The full potential of FinTech may best be realised by a progressive approach to the development of the underlying infrastructure for digital financial transformation. We suggest in this chapter the best way to think about such a strategy is to focus on four primary pillars. The first pillar requires the building of digital identity, simplified account opening, and e-KYC systems. The second pillar is open interoperable electronic payment systems. The third pillar involves using the infrastructure of the first and second pillars to underpin electronic provision of government services and payments. The fourth pillar is the design and development of digital financial markets and systems, which supports broader access to finance and investment. Implementing the four pillars is a major journey for any economy, but one with tremendous potential to transform financial systems, economies, and societies.