Fix for a schools proxy problem is saving govt Rs 85 cr each year


Hyderabad’s Jawaharlal Nehru Technological University (
JNTU) had a problem. Every inspection at the University showed a large number of staff and faculty missing from work, but the attendance system would show almost everyone to be present. The bio-metric system installed at the University for attendance had a flaw. The system was designed to enroll two fingerprints from an individual so that in case there is a cut on one finger, the other could be used to mark the attendance.

The staff at the University, however, found an ingenious workaround. While the first finger print registered was of the faculty, the second was invariably of another staff member, most probably the clerk at the University. This meant five clerks in the college could be marking attendance of 50 members of the teaching staff.

This is when JNTU decided to completely overhaul their system and use technology to overcome the problem. The University decided to try the services of Syntizen, a B2B digital identity verification company that provided Aadhaar-based authentication. Since there is a central database available under Aadhaar, Syntizen proposed integrating its technology to authenticate if the bio-metrics provided was genuine. This meant the University could easily determine if the fingerprint used to mark the attendance was that of the actual person or a proxy. With the introduction of the system, there was a marked difference in attendance, and even 200 colleges were de-affiliated because of certain deficiencies.

Established in 2014 in Hyderabad, Syntizen is a B2B digital identity-centric product company which provides Aadhaar-based services like authenticating identity, e-KYC, e-sign, Aadhaar-based subsidy management system and Aadhaar-based attendance system. Founded by Siddharth Kukatlapalli, Vamsi Kotte and Dinesh Desu, the idea was concocted by one of the co-founders during his graduation days. As his college had also adopted the biometrics attendance system, he was well aware of the hacking techniques. With the development of UIDAI, which is known as the world’s biggest biometric database holding nearly 1.19 billion enrolments, he realized here was a system that could be leveraged in any activity that requires identity authentication. The added benefit was that it is also tamper-proof.

Paperless, cashless, presence-less experience

An error-free identity authentication can come handy for multiple purposes, one of those include customer-on boarding which usually takes two to three days to complete as it requires physical presence, many documents and signatures. “We wanted to simplify the onboarding process. We thought about ways to digitize this, which can also help us to reduce fraud, speed up the process, and cut down the cost,” said Kutkalpalli.

Taking the aforementioned factors into account, the T-Hub incubated startup added another service of providing e-KYC which makes the customer onboarding process a paperless, presence-less and cashless experience which can be done in 5 minutes (if there are no regulatory restrictions). Instead of physical signature, one can use Syntizen’s e-signature facility.

Aadhaar has had its fair share of criticism, but its ability to provide utility across many use cases is also well documented. Syntizen has deftly harnessed the technology behind Aadhaar to offer a bouquet of services that include everything from fraud monitoring to Subsidy Management System. These services are now being used by both private and public sectors in the country and it has helped save nearly Rs 85 crore per year for its state government clients.

Founders

(Syntizen founders: Vamsi, Dinesh Desu and Siddharth)

In the private sector, its client list includes corporate bigwigs like MasterCard, Muthoot Fincorp, Manappuram Finance, Shriram Housing, India Shelters, Motilal Oswal, among others. Syntizen has helped these companies launch various fast-processed schemes such as three-minute Gold Loans, Trade in an Hour, Instant Bank Account, Instant Housing Loan, etc.

Nearly 6 million e-KYC transactions and over 35 million authentic transactions have been processed by the firm so far.

The right count

In another ongoing project, the startup, in association with Telangana State Technology Services Limited (TSTS), has offered the Aadhaar-based Authentication solution to the Department of School Education of Telangana to identify children studying in government and state-sponsored schools using their Aadhaar number and fingerprint/iris. The move is aimed to prevent misuse of funds.

Kukatlapalli explained that while the government provides provisions to prepare meals for the students, there was no system which could give the exact count of students present. “The people involved in preparing the meals would take advantage of this and would give a fake count of children to the government and get more provisions than required. The extra provisions were then either consumed by the authorities or sold,” he said.

Using Syntizen’s Aadhaar-based authentication system the government has been able to save huge amount of funds. The project, which is in beta phase, has been running for a few months and about 8-9 lakh students have been registered on it.

“TSTS provides Authentication User Agency (AUA) services to all Government departments of the state of Telangana. The services have been excellent. The team is young, committed, hardworking and focused and are always responsive to any issues. They have excellent domain knowledge about the Aadhaar authentication service,” G T Venkateshwar Rao, MD, Telangana State Technology Services, said.

Bumpy road

While the idea worked out pretty well for Syntizen, it wasn’t a hunky dory start. With Aadhaar being a unique concept, the team had to explain at length to their clients about its usage and impact. It faced the same issue while approaching the government and applying for tenders.

Another setback was the Supreme Court’s Aadhaar judgment last year. The SC upheld the Aadhaar scheme as constitutionally valid but said that Aadhaar cannot be made mandatory for opening bank accounts or getting new mobile connections and even private companies can’t ask for Aadhaar for any legal purpose. However, on February 28 this year, the SC passed an ordinance allowing voluntary use of Aadhaar card for opening a new bank account or getting a new mobile connection.

“The judgment did impact the firm’s business, but not in a big scale,” Kuktkalpalli said. He explained that the judgment was clear that Aadhaar card could still be used to avail certain government subsidies or open a Direct Benefit Transfer (DBT) account and 90% of Syntizen’s clients were government organisations under regulators like the SEBI, RBI. Therefore, after the judgement, the remaining clients (mostly private organisations) who used the startup’s services for onboarding customers, could not use Aadhaar card and had to stop using Syntizen’s services.

Nevertheless, Syntizen’s persistence paid off and what was once a small 4-5 people company now owns nearly 100 employees. It also raised a pre-Series A funding round from Mastercard and APCL in April.

In terms of revenue, the firm had grown at more than 100% every year, said Kotte. It earns its revenue from the private sector by charging for every person authenticated in UIDAI ecosystem. While in the public sector, it receives a share of the revenue its clients (PSUs/IT Department) charges to any department using its services.

He added that in FY2018-19, Syntizen has done business worth about Rs 4 crore and is eyeing to double it this fiscal.

“Syntizen wants to be recognized as the leading Digital Identity Solution provider in India. We are targeting about 10 new state government clients and also a major chunk in the BFSI Sector,” said Kutkalpalli.

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