Some 243 million people struggle to access essential services because they possess outdated or non-standard IDs. Credit: Pexels.
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Key Takeaways
From banking to healthcare, automated verification is increasingly used to administer access to digital services.
However, new research shows that an estimated 627 million people are wrongfully excluded by such systems.
Digital exclusion is especially prolific in places where standard-format IDs aren’t common or in countries flagged as “high-risk” by business compliance measures.
In a world increasingly dependent on technology, digital services extend far beyond social media. Today, they offer convenience and are increasingly essential in areas like banking, healthcare and communication.
Yet, for an estimated 627 million people, these services remain out of reach due to verification barriers that disproportionately affect vulnerable groups, new research reveals.
Digitally Excluded Population Larger Than Most Countries
Worldwide, 243 million people struggle to access essential services because they possess outdated or non-standard IDs.
Launched on Thursday, Oct. 10, the Greenflag initiative seeks to highlight the plight of those who are excluded from digital services, who if they were represented by a country, would be the third largest population in the world.
Source: greenflag.me
The potential untapped purchasing power of this fictional nation stands at $1.75 trillion. This highlights how addressing digital exclusion is not just a development goal, but a significant economic opportunity.
However, poor digital infrastructure is only a small part of the problem.
A much bigger challenge comes from overly risk-averse business compliance practices and biases built into automatic verification systems designed to prevent fraud and money laundering.
Outdated Identification and Non-Standard Documents
One of the major barriers to accessing digital services is the requirement for standardized identification documents.
Many digital platforms have rigid requirements, often failing to account for variations in identity documentation across countries or regions. As a result, Know-Your-Customer (KYC) protocols built primarily for European or North American users often inadvertently shut out those living elsewhere.
This leaves a substantial number of individuals unable to open bank accounts, register for healthcare services or verify their identity for basic online services.
Lack of Digital Literacy and Accessible Support
Another significant obstacle is the lack of digital literacy.
A total of 219 million people are excluded from digital services due to insufficient skills in navigating online platforms. This challenge often arises from limited access to education or resources that would help individuals develop the necessary digital skills.
Compounding this issue, many digital service providers fail to offer accessible support to help these individuals. Rather than adapting their platforms to be more user-friendly or providing adequate guidance, businesses often overlook the importance of making their systems accessible to all users, leaving millions stranded on the wrong side of the digital divide.
Verification systems that rely on biometric data pose additional challenges for 96 million people. Many struggle to meet these verification requirements due to medical conditions that change their appearance, cosmetic surgery or gender transitions. These individuals often find themselves excluded or unfairly flagged by automated verification.
Risk-Based Exclusions
For over 70 million people, the challenge is not personal but geopolitical.
Many individuals are blocked from accessing digital services simply because they live in regions or countries deemed “high-risk” by businesses. This problem is especially prevalent in the financial sector, which is subject to some of the most stringent KYC requirements and generally has a high bar for compliance.
These blanket exclusions often generalize entire populations based on national or regional risks, rather than assessing individuals on a case-by-case basis. Looking at the different factors driving digital exclusion, already marginalized populations are among the most vulnerable.
In Europe, governments’ use of risk-based fraud detection systems to process welfare claims erupted into scandals in the Netherlands and elsewhere after it was revealed that ethnic minorities were disproportionately denied benefits they had a legitimate claim to.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
