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Portability of digital identification as an enabler to cross-border payments and international remittances: Literature Review and Expert Interviews
Procurement Process :RFP - Request for proposal
Office :UNCDF - UNITED STATES OF AMERICA
Deadline :13-Jun-22
Posted on :13-May-22
Development Area :CONSULTANTS  CONSULTANTS
Reference Number :91168
Link to Atlas Project :
Non-UNDP Project
Documents :
Final Q&A - Portability of digital identification as an enabler to cross-border payments and international remittances
Updated Final QandA_Portability RFP Jun 9th
RF- Portability of digital identification as an enabler to cross-border payments and international remittances: Literature Review and Expert Interviews
Overview :

Background

UNCDF is the United Nations capital investment agency for the world’s least developed countries (LDCs). It creates new opportunities for poor people and their communities by increasing access to inclusive finance and investment capital. UNCDF focuses on Africa and the poorest countries of Asia and the Pacific, with a special commitment to countries emerging from conflict or crisis. It can provide seed capital in the form of grants and loans, as well as technical support that will improve poor peoples’ lives.

The UNCDF digital agenda for migration and remittances falls within the organization’s broader global strategy of “Leaving No One Behind in the Digital Era”, set forth in 2019. This strategy is to empower millions of people by 2024 to use services daily that leverage innovation and technology, and contribute to the Sustainable Development Goals (SDGs). Through a market development approach, UNCDF continuously seeks to address underlying market dysfunctions. The Migration and Remittances for Development Programme contributes to, and benefits from, this overarching corporate mandate. It is administered by UNCDF with funding from the Swiss Agency for Development and Cooperation (SDC) and the Swedish International Development Agency (Sida).

UNCDF’s Migration and Remittances for Development Programme aims at contributing to sustainable development by making remittances more accessible and affordable while helping build resilience for migrants and their families. For both sending and receiving countries, the Programme seeks to increase the share of migrant remittances flowing through formal channels, thereby giving policymakers at both ends greater understanding of the true picture of inbound and outbound financial flows. For remittances service providers, the Programme seeks to build the capacity to understand the financial needs and preferences of migrants and their families, and to design and deliver responsive products accordingly. For migrants, the Programme aims not only to lower the costs and increase the safety and convenience of sending money, but also to link remittances to a broader suite of financial services, including insurance, savings, pensions, investments, and credit, that can help them reach their goals. The Programme recognizes digitization as the key to achieving these objectives.

In March 2021, UNCDF endorsed the 10 principles for digital identification, facilitated by the World Bank ID4D. This marks an important step for UNCDF efforts in advocating for and building Open Digital Payment Ecosystems, starting with having strong identification systems in place. Currently, UNCDF is engaged in several projects linked to digital identification, including:

  • the feasibility study on setting up a unique identification system for financial service users in the WAEMU, commissioned by the Central Bank of West African States (BCEAO). This work will consider other initiatives on digital identification in the WAEMU such as Wuri and ID4D (Migration and Remittances);
  • the identification landscape assessment in ECCAS and IGAD countries, as part of the regional harmonization of remittances in these regions (Migration and Remittances);
  • the national identification system policies and regulations assessment in Senegal, Nepal, Myanmar, Ethiopia and Bangladesh as part of the countries’ assessment framework (Migration and Remittances);
  • country diagnostics for Fiji, Vanuatu and Solomon Islands on E-KYC and Credit Reporting (Pacific Programme).

Throughout these engagements and discussions with industry experts, it was clear that the current implementation of digital identification systems is relatively effective at the national level but poorly effective at cross-border level, with few successful initiatives such as the European Union e-IDAS system. In Africa, the African Union is in early stages with its digital ID interoperability framework initiative. Since identification is one of the core building blocks for end-to-end digitization of remittances, it is of paramount importance to gain a better understanding of challenges and learnings linked with cross-border and portability of identification systems.

UNCDF is looking for a consulting firm to explore how the portability/interoperability of digital identification can be leveraged to improve the onboarding of international migrants on digital channels, towards end-to-end digitization of international remittances and risk-based access to migrant-centric financial products.

Scope of Work and Deliverables

The consulting firm will work under the supervision of the Lead Specialist of the Migration and Remittances portfolio. The objective of the assignment is to have the perspective of all stakeholders, including financial service and international remittance service providers operating in many jurisdictions, solution providers, development professionals, and experts from academia and public institutions on their needs, constraints, and recommendations with regard to harmonized Know Your Customer (KYC), the portability of identification (ID) for people on the move (migrants) and the cost drivers related to KYC and ID globally. G20 developed countries/regions (e.g., European Union (EU), North America, New Zealand, Australia etc.) and developing/least developed countries (LDC)/regions (e.g., West Africa, Southeast Asia, etc.) will be covered. This will involve an in-depth analysis of at least two G20 countries/ regions and two LDC countries/ regions. The consultancy firm, based on its desk research, may advise on the exact jurisdictions to conduct the in-depth analysis. Through a desk research (UNCDF will share available documentation) and key informant interviews (KIIs) (a minimum of 50 interviews of various types of institutions as detailed below), the consultancy firm will map existing and ongoing initiatives related to the portability/interoperability of ID between jurisdictions, and focus on the following:

  • Policy and Regulatory Frameworks
  1. Assess what the unintended consequences are of making identity portable?
  2. Analyse options to minimize unintended consequences such as (i) the “data minimization principle” – the idea that only necessary personal data should be collected and retained; (ii) minimization of centralized data collection, giving more control to individuals, and (iii) “data localization” laws that would require explicit consent from governments before allowing access to personal data. (For example, countries such as Germany, Spain and the Netherlands are developing digital wallet-based ID systems that decentralize data storage and control.)
  3. Assess the provisions within bilateral and multilateral labour mobility frameworks, between and among governments respectively, that facilitate the sharing of personal data towards better access to financial services and social safety nets for migrants.

 

  • Infrastructure and Utilities
  1. Identify the required systems and infrastructure to put in place to make identity portable between jurisdictions. Present three successful examples – government-led, private sector-led and quasi-public entity.
  2. Analyse linkages and/or interoperability between ID systems and financial services systems to ease the flow of international payments and remittances.
  3. Analyse cases for digital identity portability (acceptability) such as access to banking, remittances, social transfers, exportability of pension and social safety nets, etc.
     
  • Adoption and Awareness
  1. Analyse key drivers for adoption by governments and public sector
  2. Analyse key drivers for adoption by employers and financial institutions
  3. Analyse key drivers for making migrants aware of portability and exportability of their IDs between jurisdictions

(Best practices in the EU, New Zealand, Australia, and in the Economic Community of West African States can be referenced while addressing the key drivers of success, key challenges and implementation timelines.)

It is expected that through this assignment, the consulting firm will produce the following deliverables:

  • a work plan detailing the methodology for the desk review and the interviews with relevant government experts, regulators, multilaterals, solution vendors, academics, development professionals, financial and international remittance service providers, etc.;
  • a set of examples of cross-border digital identification globally, divided by regions. The set should include pain points and enablers in setting up global cross-border ID systems, functionalities/capabilities of the identified ID systems, the regulatory framework governing the ID systems, challenges in implementing the portability of digital ID systems, the perspective and benefits of the private sector, and any other relevant information;
  • a 30-page report (as per the UNCDF reference guide) including an overview of the methodology for the assignment, a list of references, the set of cross-border ID systems/regional KYC utilities, pain points and enablers, insights from implementation (on policy and regulatory frameworks, infrastructure, utilities, adoption and awareness and best practices), key findings from the KII interviews with experts, and recommendations for policymakers and financial service providers. The guide will provide recommendations to policymakers to set up appropriate policies and regulations that ease the use of cross-border ID in financial services. It will enable financial service providers to better leverage available cross-border ID to optimize their KYC processes. It will ultimately inform UNCDF interventions on shared market infrastructure with a focus on digital identification to facilitate cross-border remittances;
  • A PowerPoint Slide Deck, to be presented at global ministerial platforms.

Deliverables

Activities

Deliverables

Timeline

Payment in % of total contract price

Review and Approval required for payment

  • Hold meetings with key members of UNCDF.
  • Review the documents of UNCDF Migration and Remittances Programme, specifically those on the ID components from ECCAS and IGAD regional harmonization projects, and findings of the Central Bank of West African States (BCEAO) single identification system feasibility study.
  • Develop a work plan for the assignment.
  • Conduct a desk review of literature on domestic and cross-border digital identification globally.
  1. Work plan detailing methodology for desk review and KIIs, including a list of key experts to be interviewed.
  2. Summary of main findings from the desk research and the information gaps to be filled by the KIIs.
  3. Proposal of two G20 and two LDC countries/regions for an in-depth analysis.

Month 1 – Month 2

20%

Lead Specialist, Migration and Remittance portfolio

Conduct at least 50 Key

Informant Interviews (KIIs)

with relevant experts from

solution vendors, academics,

development professionals,

financial service and

international remittance service

providers, etc.

  1. KII questionnaires
  2. Summary of interview notes
  3. A set of cross-border (digital) identification implementations globally, divided by regions. The set should include pain points and enablers in setting up cross-border ID systems, functionalities/capabilities of the identified ID systems, regulatory framework, challenges in implementing the ID systems and any other relevant information.

 

Month 3 – Month 4

30%

Lead Specialist, Migration and Remittance portfolio

Report writing

  1. A 30-page report including:
  • An overview of the methodology, list of references,
  • The set of identified ID systems, pain points and enablers, insights from implementation, regulatory framework, etc.
  • Key findings from the KII interviews with experts
  • Recommendations for policymakers, financial service providers and any other relevant stakeholder

Month 5

30%

Lead Specialist, Migration and Remittance portfolio

Workshop with UNCDF Team to present and discuss outcome of the research

  1. Presentation deck summarizing the approach and main findings of the report

Month 5

20%

Lead Specialist, Migration and Remittance portfolio

 

Timeline, Duration of Assignment, Duty Station and Expected Places of Travel

  • Timeline and duration of assignment: Five (5) months, from 20 June 2022 to 30 November 2022
  1. Duty station: home-based
    • Expected places of travel: No travel is planned for this assignment, however travel, as deemed relevant by UNCDF, will be approved and arranged by UNCDF, following UNDP/UNCDF Travel Policy.

Provision of Monitoring, Progress Controls and Payments

Payment shall be made only upon satisfactory completion and UNCDF’s written acceptance of each deliverable duly approved by the Lead Specialist, Migration and Remittance portfolio.

Disbursement of the final payment shall require a signed performance evaluation of the consulting firm.

Application:

Technical proposal:

The firm shall submit a signed technical proposal outlining the experience of the firm relevant

to the assignment; the methodology and work plan for performing the assignment; and

management structure and qualification of key personnel. The technical proposal, which will

account for 70% of the total score, should be based on the following aspects, which will also

form the basis for evaluation:

  • Expertise of the Firm [weight of 30% of technical score]
    • Relevant experience working globally both in G20 and LDC countries, on financial services, legal/regulatory aspects, implementation and/or evaluation of payment infrastructures including (digital) identification and e-KYC aspects, etc. (15%)
    • Relevant experience in conducting market research at the global level (15%).
  • Methodology, Its Appropriateness to the Condition and Timeliness of the Implementation Plan [weight of 35% of technical score]
    • Overall and detailed approach to the work, including the sequencing of the work, engagement with UNCDF and external stakeholders, and the review process of deliverables.
  • Management Structure and Qualification of Key Personnel [weight of 35% of technical score]
    • A minimum of 5 years of progressively responsible experience in digital identification of key team members is mandatory.
    • A minimum of 2 years of progressively responsible experience in the banking or financial service sector, international remittances or related experience in the private sector or an international organization of key team members is mandatory.
    • Experience designing, conceiving and prototyping digital finance solutions or remittance-related use case drivers.
    • Excellent command of the English language is required. Knowledge of French is an asset.

Financial proposal

For the Evaluation, the financial proposal will be weighted at 30%. The financial proposal must be submitted in the format as described in Form F.

Evaluation

The formula for the rating of the Proposals will be as follows:

Rating the Technical Proposal (TP):

  • TP Rating = (Total Score Obtained by the Offer / Max. Obtainable Score for TP) x 100

Rating the Financial Proposal (FP):

  • FP Rating = (Lowest Priced Offer / Price of the Offer Being Reviewed) x 100

Combined Score = (TP Rating) x (Weight of TP, e.g. 70%) + (FP Rating) x (Weight of FP, e.g. 30%)

Please refer to the RFP document attached for more details on this RFP and application process