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Humaniq: Financial Inclusion of World’s 2 Billion Unbanked

Consider some of the services you probably rely on your bank to provide: safekeeping, payments processing, and the occasional credit. Your bank also likely facilitates certain intangibles: your sense of financial inclusion, job market participation, and household security. Without these you would easily be vulnerable to potential exclusion and economic prejudice.

Access to basic financial services is so critical to security and development that it is listed as the top target set forth in the UN Sustainable Development Goals to end poverty. For more than 2 billion people banking services still remain out of reach (source: World Bank). Traditional banking services may be complex, expensive, and difficult to access. Barriers include lack of local banking infrastructure within reasonable distance and high expenses to open accounts. In addition, some 1.5 billion people lack the necessary personal identification documents to open a bank account (source: World Bank) – preventing them from taking even the most basic steps to integration.

Humaniq, a London-based fintech startup, is a next-generation bank offering solutions for the world’s unbanked population. Combining its vision for economic empowerment and community building with the latest innovations in blockchain technology, mobile, biometrics, and artificial intelligence, Humaniq aims to provide a technology platform for financial inclusion services for those who lack practical, affordable banking solutions.

Dinis Guarda, CEO of Humaniq, is a vocal proponent of global sustainability initiatives. In founding Humaniq, he joined with fellow co-founders Alex Fork and Dimitry Kaminsky to seek a way to use advanced technologies to solve humanity’s most pressing challenges. “The biggest challenge at the moment is that a big proportion of the world’s population is filtered-out from the technology around them. They don’t see the future of work and all the disruption that is going on,” explains Guarda. “At the same time, we have new disruptive technologies, a lot of them foundational technologies, like blockchain, as well as IoT and AI. These technologies are creating a fast transformation in the way we consume information, the way we deal with our economic and social models, and the way we deal with economics.”

The biggest challenge is that a proportion of the world’s population is filtered out from the technology around them

Initial Coin Offering Powers Expansion

Established in July 2016, Humaniq has moved swiftly in executing on its plans to build a sustainable business model as well as a technology model that supports expansion of its platform and ecosystem. In April, Humaniq achieved a major milestone with the initial coin offering (ICO) of its HMQ token. The sale attracted 12,000 investors and netted close to USD$5.2 million. “With this, we are now building the beta version of our app,” says Guarda. “We did our first pilot project in India. With these pilot projects, we are testing the technology, and as we get a much bigger capacity to understand [users’] needs, we are going to scale these and take things to the next level.”

Platform Integrates Mobile, Biometrics, and Blockchain Technology

Developers at Humaniq are working to build a robust technology platform that can scale. Of its five development teams, Humaniq has two teams working on both the back-end and front-end, one team on the back-end, and one team on open API development with third-party providers. Humaniq’s specialty – which distinguishes it from simply being yet another mobile wallet app – is its innovative combination of mobile technology, biometrics, and blockchain technology.

While almost half of the world’s population lacks basic financial services, a sizable portion owns a mobile phone. To access Humaniq’s app, all that will be required of a user is a mobile phone with a camera. The app is being developed initially for Android devices, but will eventually be available for iOS as well.

The use of biometric identification offers a twofold advantage. On the one hand, it simplifies the user experience, so that even a novice can use the service. One the other, biometrics provide a sophisticated layer of security through facial recognition algorithms and neural networks that can verify user identity upon each login. This concept, known as proof of face, is based on a series of photos, video recordings of facial gestures, and the user’s speech. “Biometric, because from the UI and UX we want to make sure it is possible for anyone to use it,” says Guarda. “Especially in India, there is a study showing approximately 1 billion people who do not exist in terms of documentation; so we want to make sure through biometrics that we can integrate people in the digital economy.”

HMQ Derives Value from Community

Users of the Humaniq app will hold HMQ tokens as the chief value denomination within the community.  These tokens will be exchangeable into bitcoins, and then into dollars, euros, or other standard currencies. Two crypto-exchanges already accept HMQ tokens. Every user is given tokens for passing bio-identification. They can earn additional tokens by inviting friends to join the Humaniq community and by doing transactions. As the community grows and becomes more sustainable, it is expected that it will become much easier to exchange tokens than to go through currencies and traditional exchanges.

“People have a token because of being in the community,” says Guarda. “These tokens will have a value similar to other assets such as commodities, fiat currencies or stockmarket shares. The HMQ token is already doing this at the time of writing.”

Challenges: Technology Integration and Security

External resistance and technical challenges are likely to crop up around the integration of the various technologies, especially concerning the integration of blockchain with biometrics. The biometrics aspect presents additional challenges with security and data; however, Humaniq is working with leading cybersecurity experts and non-governmental organizations to ensure the integrity of digital identity and big data management. “We are conscious that, working in some of these countries, there will be a lot of unforeseen challenges,” says Guarda. “We need to make sure there is a high degree of cybersecurity.”

One foreseeable challenge for Humaniq is that as its digital-asset becomes stronger, there will be additional financial, legal, and ecosystem issues to consider. On these matters, Humaniq is working with Deloitte for guidance. To mitigate potential risks to its currency, Humaniq has strictly enforced policies limiting the number of tokens any single person or entity can mint. Because of the biometric ID requirement, no one can own HMQ tokens anonymously. These policies are intended to protect HMQ against the notoriety gained by some cryptocurrencies as tools for money laundering, currency manipulation, and abuse.

Priority on Building a Solid Community

In July, Humaniq plans to make its service available via pilot projects in Africa, Asia, and South America. Ultimately, the service will be available to anyone anywhere, facilitating an exchange between the developed world and developing countries. For example, someone working in Germany will be able to send money back to her family in Africa. Guarda says, “We want to make sure that Humaniq is not merely an app, but a social-good ecosystem for humanity.”

Community is an integral part of Humaniq’s mission. “The challenge of building a solid community is essential, because if we don’t build a solid community, it won’t scale,” says Guarda. Humaniq’s first step in community building was the success of its ICO. “We got 12,000 people that participated in our crowd sale, which is the biggest successful crowd sale in terms of participants in documented human history. This means we already have a community in terms of people who believe in us and our vision for the near future. That’s point one,” says Guarda. “Point two is that we have ambassadors around the world. We have people in more than 50 countries already involved. We have offices in London, Luxembourg and Silicon Valley. We are building that community step by step.”

The ambassadors are Humaniq’s representatives on the ground in locales where its services are being offered. These people, some of whom are influential leaders locally, will hold info sessions and be a bridge for the service into the community. Humaniq’s own team stands out for its technical expertise as well as its multicultural background with people from all over the world, including Cambridge, the U.S., Germany, Italy, Nigeria, Ghana, Jamaica, and Asia.

Looking ahead to the future, Guarda’s entrepreneurial vision for Humaniq is that it will be a driver for social change. “I certainly want to make sure we use the technology for the right things,” he says. “I want to say how Humaniq made tech for good, and in the process integrated billions of people into the world economy. If I can do that, I think I will be happy and my children will be proud of me.”

Top image via Shutterstock

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