The Aadhar Game

Aadhar is a high-stakes game.

Data is a hot asset these days. And everyone , his uncle and his monkey wants to acquire or leverage other people’s data, any which way, preferably free and by using the coercive powers of the state, to build private fortunes and ensure that the whole world does their bidding, never mind how oh-so-not-in-their own self-interest it is for people to fall in line meekly .

The following is a presentation from one of the foremost proponents of Aadhar.An occasional good point here. An overriding sense of entitlement and belief that the author knows all and the best way forward and a frightening lack of empathy and disregard for what the rest of the world might feel or want.

My comments on this presentation follow below:

1.)Slide 3:Not sure what High Cost to High Volume means in this presentation. To a computer it makes no difference whatever is the transaction size.

2.)Slide 4:I was struck by how cash is deliberately dropped from the infographic.How many of us doing a Rs30 mobile recharge are not paying cash, at least to the rechargewalla before he/she performs a mobile recharge?

3.)Slide 4: Reflect how the human pyramid seems to imply that cheques will be the privilege of the few or a luxury to most for most of the time…..a case being built for doing away with free cheques?

4.)Slide 4:So, how many people with both credit and debit cards, deliberately pay for lower value items using a debit card and switch to credit cards when the bill value is higher? That too at the same POS ?

5.)Slide 4: So how much of this current usage pattern is explained by socio-economic factors ?Say more poorer people having access to debit cards but not credit cards ?Poorer, rural and mofussil or older people not having access to smart-phones, data packs, tech skills ,smart bank accounts and bankers etc. And how much of today’s unequal reality are we accepting as givens for all times to come in this projection?

6.)Slide 5: A call for reducing humans clearing cheques and/or charges for cheque clearing that customers now enjoy largely free ?A step precedent to making electronic transactions paid in future, once no more free options remain available to bank customers? And of course, the existence of the competitor product-the electronic cheque must be supressed.

7.)Slide 6:Unless banks made having a paid debit card in hand necessary to use internet-banking, how many debit cards each would customers with access to credit cards actually keep active? A more valid question to ask is how many people with access to charge and credit cards, personal and corporate ones, still prefer IMPS at POS terminals? Or are we in our eagerness to promote mobile banking obscuring the fact that the same person might prefer different modes of payment depending on place, purpose and their relationship with the other party to the transaction?

8.)Slide 7:And why not the other alternative ?Different banks/organizations or different brands of the same organizations or different products to address various market segments ?

9.)Slide8:Are we all super keen to make our finger prints, iris-scans and DNA sequences ,perhaps kundali even, public property ?For others to use ,misuse and abuse as they see fit ?To meekly accept permanent exploitation of ourselves by the czars of tech ? The corporate and political elite ?

10.)Slide 9:When banks manage cards and pin, at best they simply know how much we spend at various establishments, using a particular card. If there is a credit bureau, they may know how much we spent using various cards. That’s all. In addition via KYC documents, they knew our contact details, date of birth and names of our parents, spouses , grandparents and children. And even with this much information, we know how bad it is when credit bureaus get things wrong or our cards are stolen and accounts cleaned out. And we know how hard it is to claw back money from banks, even when it is their fault. With Aadhar, it gets easier for people to know your travel habits, your phone habits, your utility use habits and so when you are absent from certain premises, your travels abroad etc. etc .etc …..all in addition to your property, tax, birth, financial and family details. Mother lode for hackers ?You bet. Can Infosys build something no one else, anywhere else in the world, can’t hack in perpetuity? Nyet. Aadhar Database a mother lode for corporates and marketers ? You bet. Any plans on sharing the wealth with the ordinary people being compelled to part with data. Never! How dare they aspire to private property ?How dare they assert a right to privacy ?They but exist to know their place and do the bidding of their masters without murmur. And in any case have they the brains to know what is good for society and themselves?

11.)Slide 10:Really?And we all want to stare soulfully into cell phone cameras to provide iris scans to all and sundry? Never mind over what communication lines and servers the data passes? Who captures what, unknown to us, for god knows use where ?

12.)Slide 11 :Yep. The way it should always be. And most certainly there should be freely available adequate alternatives to everything. Aadhar Even. Aadhar Payments, most certainly. Consumer being King. Citizen being King.

13.)Slide12:When customer loyalty doesn’t pay, churn is the natural response.

14.)Slide13: So how is the government ensuring that banks are passing on lower on-boarding and transaction costs to individual customers ?

15.)Slide14:Individual pricing of risks is a great idea, only if multiple proprietary technologies compete.

16.)Slide15:And how does Mr Nilekani propose to ensure that people don’t create social media profiles to fool banks? Ours is a country in which NPAs derive from careless lending to flashy business people. So how do we ensure that banks are not fooled by a few pictures on instagram?

17.)Slide16:And why would people and businesses with superlative cash flows they are fully confident of ,really seek loans from banks ?They are likely to enjoy credit from vendors and customers. And can depend on internal accruals for expansion. Sub-prime borrowers are sub-prime borrowers and merely having more details of their incomes doesn’t make sub-prime lending all that much of a social good. No person became a good credit risk before they mastered the habits of generating a surplus, saving ,hanging onto their savings and making wise investment decisions with their earnings and savings. Credit pushed onto the unsophisticated is akin to pushing crack to the general public, bad for victims and bad for society.

18.)Slide 18: And there are ad-free alternatives to Google, freely available online and Microsoft Office is also now available for free use online.

19.)Slide 19:Those who wish to exchange their data for freebies might  do so. But others must be allowed the choice of good free and paid alternatives that don’t ask for their data.

20.)Slides 20-25:So Aadhar is the only way for PSU banks to survive ?

21.)Slide 27:Mr Nilekani would like us to not know that the likes of Apple Pay are a failure in countries where cards are ubiquitous. Credit cards attract no charges, as long as balances are paid in full on time. In fact cards offer customers free 45-55 days credit and a part of the card company’s earnings from businesses as loyalty points or cashbacks. And best of all buyer protection in case of disputes with merchants. Mobile wallets have a long way to go to offer the benefits of cards. And hell what do you do when your phone is discharged? Walk round carrying power-banks to replace credit cards?

22.)Slide 28:Really ?Which business currently enjoying free credit will give it up easily? Which buyer will pay the cost of transaction, if they could avoid it ?

23.)Slide 29:Yes Cashless changes everything. It make people aware of how far some greedy people will go to make a little money. Who cares if people die in the process? All the better to make people fear government and rush to get an Aadhar card.

24.)Slide 30:Businesses and people never really needed banks as collection centres. Its government action that makes bank deposits and transacting via banks a compulsion. Remember we people of the sub continent are the ones who invented the Hundi and Hawala ?Native predecessors, that it served banks and governments to vilify wholesale.

If your money is not with someone else would you need to withdraw it? via an ATM perhaps?

So what is formal and what is informal? Who decides what is what? Why is informal any less than formal? And why?

Customers are “owned” by companies ? Really ?And to these hapless “owned” customers, does it really matter if a bank branch/ATM or algorithm “owns” them ?Do customers really wish to be “owned” ?

And for government to collect more taxes, it must ensure that customers “consume” banking services, preferably Aadhar driven ones? Conflict of Interest Anybody? And BTW what really do governments exist for ? To Collect Taxes ?To Maximize the Wealth of Techno Czars? Or to Serve the Common Good?

25.)Slide 32:And what happened to the concept of risk-premium ?Or is Slide 15 to be taken to mean that middle-class borrowers are to subsidize “businesses” that supposedly do the good work of extending “inclusive” banking to sub-prime borrowers ?Drawing on the crack supply analogy, why should the middle class subsidize the businesses that supply crack to addicts who are not in much of a position to help themselves?

26.)Slide 35:And what exactly is the issue with this scheme that is envisaged remaining purely voluntary, freely available to all those who see value in it? Why coerce all citizens to join this system?

27.)Slide 37: So why are people who are well banked already being coerced to go the Aadhar way? Whose benefit is being served by this coercion ?

28.)Slide 38-41: So how do businesses leveraging the India Stack pay people for the data they have provided and continue to provide, that is the basis of their greater efficiency and hopefully profitability ? What has government negotiated for individual citizens from these businesses, in exchange for the data they have been compelled to give?

29.)Slide 42: Should we read -‘A few in India will be rich from data’?

30.)Slide 46:A small but crucial distinction between Aadhar and Google and Facebook.:The former is compulsory, Google and Facebook are not. And there are many good and freely available alternatives to both Google and Facebook.

31.)Slide 48:Exactly the reason to ensure that Commons are not created, only to deliver them ,and/or concentrate the benefits derived from them into a few  private hands.

32.)Slide 49: How is it proposed that banks will pay customers for these benefits that accrue to them?

33.)Slide 52:And why pray must we make banks the sole or default platforms to provide these services? In fact why must consumers go via banks at all? Why can’t customers go direct to the service providers. Algorithms can just as simply be written to be bank-centric , or any other financial service provider- centric ,smart-device centric, consumer-centric or stored in block-chains ?Why must Mr Nilekini’s preference, backed by the coercive powers of the government, be binding on all Indians ?

34.)Slide 53:And what prey for the customers who don’t wish to be recipients of targeted advertising?

35.)Slide 54: When churn was held to be good for the Telcom Sector in Slide 12, why is churn bad in the Banking sector and stickiness desirable?

36.)Slide 57: Why must savings bank customers be compelled to take the risk of a fund manager calling interest rate movements correctly ?Why must all other alternatives to hold savings be de-facto barred to savers? In fact why must savers compulsorily lend to banks at all, when they don’t like the terms of the deal?

37.)Slide 58:More marketing jargon/buzz words to push rather old financial ideas in a repackaged fashion.

38.)Slide 59:Micro-pension ?Sounds a lot like taking away candy-money from a baby. So who going to be able to retire on a Rupee a day? Depriving people of purchasing power today and tomorrow to provide play-money for corporates more-like. And this in the days when PO Savings products are made increasingly hard for small-savers use.

39.)Slide 60-64:Interestingly our billionaire power-point presenter and his buds are have not set up banks exclusively catering to the “Rajni’s” of the world ?Wonder why ?

40.)Slide 65: Peer to Peer lending, Micro-finance lending and SME lending start-ups etc. are all already managing fine without Aadhar ?So why must we make Aadhar compulsory for all Indians, all under the plea of making loans universally accessible ?In fact who says such pervasiveness of credit is such a great idea?

41.)Slide68-69:Without policies that handicap cards and push UPI, its doubtful that people will voluntarily opt for UPI over the convenience of cards.

42.)Slides 70-73:Yes .Most certainly DeMo severely disrupted our lives. But the enfolding fintech revolution world-wide is going to make a monkey out of Mr Nilekeni’s Vision. Ours being a less than free and egalitarian society, the man may yet succeed in ramming his vision down our throats and make us suffer needlessly, but closely following developments in fintech round the world makes me dead certain that our Tech Czars have failed once again to read tech trends correctly.