Digital transformation is becoming just as important today as buying a tractor for a farmer during the Industrial Revolution. Since the global pandemic has boosted the demand for modern technologies and forced transformation of businesses, many Georgian companies still fail to respond to this challenge.
“Global pandemic has affected everyone. Consequently, economic activities have slowed down and many companies have suffered. Meanwhile, we see how the common-stock value changes on global stock exchange markets. Today, the cost of the video communication program Zoom has increased so much since February that it exceeds the total cost of the 7 largest airlines in the world. Imagine how many times the country’s economy would have grown if Zoom had been founded in Georgia,” Gabriel Meliva, cofounder of Kvalifika, told The FINANCIAL.
In his interview with The FINANCIAL, Meliva talked about the development of the technological field of Georgia, the prospects of digitalization of services within public and private organizations and his latest innovative product – Kvalifika.
Kvalifika is one of the latest innovative products that allow the customer to be identified remotely. In particular, the system uses 3D biometrics to create customer’s biometric template and compare it with the 2D image on the ID card.
Q. Despite its negative impact over various economic sectors, COVID-19 can be undoubtedly named as an accelerator of technology. Did the global trend of technological boom echoed in Georgia?
A. Technological field of Georgia is at the early stage of development. It lags far behind the world in many ways, however I feel that we are moving forward and try to keep pace with this development. Many people have recently contacted us who want to develop e-commerce within their companies. Many decided to sell their products online. However, in many cases, they seem confused and do not know where to start. I think that experiments are good and this is exactly the necessary component for the growth of this field. Nothing can be developed without experiments, failure and trial.
Q. It’s obvious that the global pandemic has speedup the necessity of reshaping many services on digital reality. Another issue is our resources and literacy to respond to this challenge. Online studying is a good example for that, which has been translated just into a connection via camera and its real adaptation, has not been done. How ready is the Georgian technology sector on the one hand and the company / structure, on the other hand, to respond to these challenges?
A. There still are companies that do not perceive the new reality. Digital transformation is becoming just as important today as buying a tractor for a farmer during the Industrial Revolution. Every company should analyze its needs and then act according to those requirements. It is not necessary to make a decision that someone else has made, a correct decision for one may prove unsuccessful for another. First of all, the desire and diligence of managers to make changes in the company is essential. I would suggest such people ask professionals to analyze and just refrain from copying
from someone else. I’ve often seen companies that try to develop a huge platform internally, when such a platform already exists and they just become subscribers and make a monthly or annual payment for this service. Imagine, you need a communication program for video calls in your company and you start creating this program on your own, instead of using already existed and well-known programs.
The market and the consumer themselves push you to become technological and offer services acceptable to them. Generations are changing. Accordingly, we must meet them prepared.
Communication with an 18 -year-old person and selling her/him a product or a service will be difficult for you without the knowledge of modern technologies.
Q. One of your last projects is Kvalifika, which serves to identify a person digitally. How did the project idea come about?
A. The 21st century is the era of the digital world. Organizations try to simplify people’s life by “digitizing” their services. Advances in recent years, technologies in the field of machine learning and artificial intelligence have paved the way for such a conservative field as client identification and on-boarding. Today’s software solutions allow us to answer the question of who our customer is and identify him/her with better accuracy then the human eye.
One of the initiators of this project is the development company VOBI. The idea, launched in 2019, was soon presented to both companies and regulators, which was essential for a biometrics-related product.
Our solution, unlike well-known analogues such as Amazon Rekognition, creates a biometric 3D map of the face and compares it to a 2D picture of a person’s ID. We have clearly seen the necessity to use this technology in Georgia. Regulator also facilitated this. That’s what made us decide to offer this service to our customers.
Q. Kvalifika offers identity verification, document verification, liveness check, KYC (know your customer), and sanctions screening. Which of these services are more in demand today?
A. All the above-listed services are necessary for the company to properly assemble its AML (anti- money laundering) policy and correctly identify the customer, i.e. the KYC process. Hence it is essential that this process is fully operational and meets modern standards.
Our service is not just a technological solution, the team of Kvalifika consists of professionals from different fields, and therefore we help companies to manage the whole business process. First of all, we analyze the need for customer identification service, we help in planning the business process, compiling the right UX/UI (user experience), we provide legal recommendations, we help in the relationship with the regulator and most importantly – in the integration of technology.
Thorough knowledge of this field is a big advantage. We are constantly analyzing the international market. Accordingly, we transfer this knowledge to our services and then share it with our clients.
Q. Which Georgian businesses are more open to innovations?
A. The banking sector is undoubtedly a leader in introducing innovations. However, it should be noted that the insurance and gaming business sectors, as well as microfinance organizations, are distinguished by their openness to innovation. Some companies do not belong to any of these fields, however, they have seen the possibilities of this technology and today are already trying to use it. During the pandemic, the interest in biometrics in the world increased and today it is well used by online education, medicine, law and other types of companies.
The time when opening a bank account, visiting a doctor for a prescription, or signing a contract required our physical presence can be said to be a thing of the past. Remote identification through biometrics has changed the face of business in both Europe and the world and has given rise to new concepts such as neobank, online medicine, fintech and et al. In this regard, Georgia is trying not to lag behind the current trend in the world; the echo of which we can boldly say is Kvalifika.
Q. What about the openness of state bodies towards innovations?
A. I think there is a readiness to use biometrics in the public sector, although the hurdle is the lack of relevant legislation in this regard. Contrary to other alternative methods, biometry is faster and cheaper mechanism for identification. We are confident that the time will soon come when this mechanism of customer identification will be as actively used in the public sector as in the private sector.
We are planning to present Kvalifika to Georgian state bodies. Considering the importance of our product for developing remote services, we are ready to offer our services free of charge to government organizations.
Q. What is the average time required for digitalization of Georgian private and public organizations?
A. Complete digitalization of private and public organizations depends on many factors, including, the existence of relevant demand on the market, qualified staff, availability of services and et al. However, the most important factor is state support. In this regard, we can distinguish the recent activity of the National Bank of Georgia (NBG). The Bank has recently established Financial Innovation Office, targeted to encourage fintechs and innovations within financial institutions.
The biggest project for the development of fintech and regtech markets, which the NBG is actively working on, is an approximation of the Law on Payment Systems to Payment Services Directive of the EU, introduction of the so-called open banking principles.
I am confident, that the introduction of open banking will be a turning point for the financial market and fintech companies in many areas. It will contribute to the entrance of new companies on the market, new products will be offered, bureaucracy will be reduced, and competition increased. On its side, increased competition will make services cheaper and financial products will become more accessible to the population.
It is open banking that should become an exemplary precedent for the full digitization of banking services.