What’s In Your ‘Citizen Wallet?’


Government moves at its own pace, for better or worse or both, but that pace can provide opportunities for fraud and expensive errors – mistakes and missteps that can cost hundreds of billions of dollars annually.

Take all the paperwork required to access federal benefits in the U.S. Not only does that encourage the spread of erroneous information – a person filling out a seemingly endless set of forms, and different forms for different agencies, is likely to make a mistake here and there – but can make it easier for fraudsters to exploit the system. As Laura Grant, head of cloud compliance, strategy and innovation for the regulated industries at SAP, told PYMNTS in an interview on Thursday (March 21), the often slow movement of the benefit approval process often leads to the government giving the benefit of the doubt to applicants.

Government wants to pay them "as soon as possible,” in large part because officials who operate benefits programs know that “78 percent of the population is two paychecks away from homelessness,” she said. “The approach in the past has been to pay out benefits, then chase it down if there is a mistake or bad actor” involved. Granted, the notion of paying benefits as quickly as possible may clash with many assumptions and personal experiences when it comes to government benefits or operations in general – but one cannot look past the fact that in 2017, according to government data, U.S. federal agencies lost at least $141 billion via erroneous or fraudulent benefits payments.

Mobile Opportunity

That’s an opportunity for mobile technology, including authentication, at least in Grant’s telling. She spoke to PYMNTS about a week after a SAP mobile offering called Citizen Wallet won the MITRE Challenge, a contest operated by the MITRE Corp., a not-for-profit organization for federally funded research and development. Citizen Wallet is a mobile app that, according to SAP, is designed “to empower individuals to create an account and choose to import information about themselves already available in authoritative government data profiles.”

The challenge, according to Grant, was “put together on behalf of nine federal agencies,” all of which are officially interested in making the benefit-disbursement process more efficient and less prone to fraud.

Anyone who has been frustrated by filling out endless and repetitive forms at doctors’ offices can understand the hassle of federal benefit paperwork: Because of laws and regulations, data collected by one agency cannot typically be used by or shared with another agency, lest consumer privacy be breached. That leads to more red tape, increases the odds that the applicant will make unintended mistakes when filling out paperwork, and leaves an opening for fraudsters who can bet on benefits being pushed through before officials become aware of their scams.

SAP Concept

The idea behind Citizen Wallet is to build off the data applicants have already provided to government agencies, and enable those applicants to have control over where and how to share their data in pursuit of federal benefits.

As Grant told PYMNTS, “Let’s start with the profile (an applicant) might already have with the Department of Homeland Security – say I just filled out my global entry form,” which is a treasure trove of personal data. “I could use the app to build upon it, or build my profile” from other sources, such as Social Security data. “It’s like in eCommerce, where you (start to authenticate) yourself by linking to your Facebook or LinkedIn profile.”

Of course, it remains up to government officials to verify the data and authenticate the applicant, but making the process more digital and mobile would, ideally, ease consumer hassles, frustrations and mistakes, and close more doors for fraudsters.

The larger idea behind such a process, Grant said, is to create something that is essentially “citizen self-service” when it comes to federal benefit applications. The Citizen Wallet concept also includes telling the applicant, based on the data he or she has provided to the app, “what (benefit) programs they are most likely eligible for from across the government,” she said.

Payments and Machine Learning

The app will also include a payments calculation tool so applicants can see how much they would receive, along with some type of function that would enable the deposit of benefit disbursements electronically into a recipient’s bank account. In addition, the app would be informed of changes in a recipient’s life – new job, new address, new child – that could impact benefit amounts, and pass on that data to government authorities.

Machine learning also seems very likely to play a role in mobile benefit applications and disbursements. That technology can “show potential flags and indications of potential bad actors” and alert authorities to do deeper checks on the applicants – that is, apply more friction to the process in hopes of catching fraudsters, a balancing act that is prevalent in the larger payments and commerce world.

Citizen Wallet still needs more development and testing. Grant told PYMNTS that SAP is waiting for guidance from federal authorities about the next step after winning the MITRE Challenge, but the general plan is to use a prototype and test it against a subset of federal benefit data.

Funding and Security

The concept faces significant hurdles, and more questions about how exactly Citizen Wallet will incorporate security technology. Funding is one challenge: As Grant pointed out, securing funds from internal federal sources is not always the easiest task in the world, though she is optimistic it would eventually come.

Another question is just how Citizen Wallet will make applicants feel secure while satisfying concerns about data breaches and hackers. The idea is to incorporate two-factor authentication into the offering and, in time, include biometrics.

“We could partner with someone to bring in facial recognition,” Grant said, adding that Citizen Wallet has “open APIs,” which further encourages innovation around the concept. “We have a very agile platform.” She said the app would conform to data security regulations mandated by the federal government, and have the protection offered by SAP’s own technology, which is already involved in GDPR compliance issues. Blockchain, too, could be employed in the interests of data security.

Grant could offer no timetable for further development and deployment of Citizen Wallet, and there are other projects that also seek to bring more digital efficiencies to government disbursements, and not just benefits. Federal government will continue to move at its own space but, at the least, the results of the recent MITRE Challenge show serious work is being done to move that massive, complex institution further into the mobile realm.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.