After considerable debate on its usefulness and security issues, the unique identity number or UID project (Aadhaar) has gotten a move on with pilot projects done in several places in the country with the millionth unique number being given away.

Here we try to highlight the purported advantages of acquiring a UID, such as serving as a key customer authentication data source of accessing financial services including bank accounts, mutual funds, other services such as mobile connections, gas connections and the like.

These apart, the larger benefits for investors and potentially large business opportunity for the IT industry is looked into before looking at some of the key concerns.

The number game

It is important to note that the UID authorities (UIDAI) do not issue a card. What is given is a unique 12 digit number to people who choose to enrol.

UID is not mandatory and is voluntary in nature. Only if you want the number, which can be used for specific purposes, you can choose to enrol once the UIDAI authorities announce their launch in your neighbourhood.

There is a large registrar network that the UIDAI works with who help in enrolment. All you need to do is to take a photograph , fill up a simple application form asking for basic details and address and submit simple supporting documents. After this all your fingers are biometrically scanned (all ten of them), as is your iris. With your data, together with the scans, you are identified. Once this is done , you can check the UIDAI website for the status of your application. Within a month, you will be given the 12-digit unique identity number . The registrars for enrolment thus far have been public sector banks and other governmental institutions.

Deriving benefits

We often face the inconvenience of of having to submit photocopies of several documents for authentication purposes .

For instance, as a part of the KYC (Know Your Customer) norms, banks or fund houses ask you to produce documentation when you want to open an account, or invest in a mutual fund scheme. Mobile phone operators ask you for multiple proofs for authentication as do the passport authorities.

As the UID database will already have most of the information when you enroll for the number, these agencies may use your number as a one-stop source for authentication, after it gains wider acceptance.

And if you change jobs and move to another city, opening a bank account, getting a mobile or a gas cylinder connection would get that much more easier as your UID will do the job of authentication. These institutions too benefit by having to spend substantially less for verification purposes.

Of course with the number of enrolments increasing , the scope of services for which the UID database can be accessed for authentication could be expanded substantially.

Apart from the individual benefits, IT companies too are vying for business opportunities from this mission. With a whole host of computer systems, servers, scanners and other electronic hardware required for achieving the targeted database of 600 million numbers within the next five years, the pie is pretty large. A CLSA report has estimated a $20 billion opportunity for companies in the first five years and $10 billion annually from the sixth.

Data concerns

With huge amounts of data collection at hand, comes a concern for security and potential misuse. The UIDAI has indicated that for all authentication purposes, only a ‘Yes' or ‘No' response can be had from the centralised database. For example, if a bank wants to verify the details in your application form, it will get the above mentioned answers for each field of information.

Access to information is highly restricted and encrypted. The chances of duplication are very minimal according to the UIDAI.

If it manages to convince a larger chunk of the population and its broad-based use, enrolling for a unique number may well be worth it.

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