Unum ID Panel Discussion at Group Futurista webinar on the Future of ID Verification for Businesses

We're now going to move on with our panel discussion, which is titled Staking Out the Enemy: Understanding ID Verification in a Digital World. Now, our panelists, we're going to start off by welcoming back from our platinum sponsor Argos KYC, Brian Noller, who is the head of sales and business development. We're also going to welcome back Nick Adams from our gold sponsor UnumID, who is the head of partnerships. Harrison Nagy, who is the chief information security officer from First First Bank, Nigeria. Harrison, if you're still with us, will be joining us as well. And then we might possibly also be joined by Paula Noy, who is the security and privacy lawyer at Field Fisher. So Brian, I'm going to come to you first. Um, from your knowledge, uh, Brian, what are the emerging trends of ID verification that we can look forward to in 2023 and beyond?

Rob, thanks for that question. It's a great question. As we've heard today from many of the panelists here, the internet's created endless opportunities for fraud. However, companies and regulators like we've heard from today, UnumID, us, Argos, First Bank, and some of the others, we're all working on avenues to combat that. And make that better, make processes better, and keep everything safe at the end of the day. Some of the emerging trends is really trusting that the user input information can be easily manipulated. Any of the information that I type into your website, I can type anything that I want. I can show up to your bank— I forget who was just speaking, but All I need is a name, date of birth, and an email, and could create a bank account for you. That's crazy to me to think about. The emerging challenges, and that's the, that's the areas that we're all working together to kind of find. Our goal with Argos is trying to work together with other industry professionals to create those solutions so that it's not just us against, you know, we're not working up against UnumID, we're working I mean, we haven't spoken before this, but we're working with organizations like them to figure that out at the end of the day.

Perfect, Brian. Thank you. And Nick, I guess that brings me nicely over to you, Nick. What about you in terms of emerging trends? What's your take on that?

Yeah, I mean, I think Brian hit the nail on the head there. It's that shared secrets, the way that we traditionally use username and passwords. To create new accounts on websites, it's been exposed, right? It's really high user friction to do this extra step of KYC, and it's really prone to fraud, and it requires manual review, and it's not very accurate, and it's slow. And, you know, even with the best-in-class solutions, there's constant innovation, and it's still just not quite there yet, right? One of the examples I want to talk about is we've seen cryptos utilize prefill. For the vast majority of their user base where they might only collect a name and a Social Security number, and then they try to source the rest of that data on the backend just as an easier way to create less friction in that signup flow. But what they're doing with that is really costing them in security. They've seen a huge rise in this synthetic ID fraud, as Harrison was mentioning, and it's a huge challenge is that balance between security and user experience. And I actually kind of want to challenge this whole notion that those have to work against each other. I don't think you need to really sacrifice one in order to gain another, but instead we need to think, you know, collectively as everyone on this call here about shifting the entire paradigm of identity, right? Making it truly reusable and trustable across the entire internet. And it's gonna take a whole host of solutions to do that. But at the end of the day, really creating a reusable identity is the only way that we're gonna be able to truly shift from this shared secret paradigm and eliminate this, you know, prone, insecure, inefficient way to online, different online financial services.

Harrison, I'm gonna come over to you now. Slightly different question for you. What challenges do you think we're gonna face moving into 2023?

Okay, so in terms of challenges, I think one of the first challenges that's not really peculiar to 2023 is the fact that regulation standards are not moving as fast as technological advancements. Okay, so you have, you have regulation that is sometimes 2 or 3 years behind. And in the digital space, that's enough time for anything to happen. Okay, another key thing is one of those is the data points for ID. The data points are far away, okay, and becomes— makes it even more difficult. For example, if you have about 20 data points or 10 data points and you can automate 15, but 5 is not ready for automation, then you can only grow at the pace of that file because it becomes the regulator for the, for the speed. Then there's also this challenge of creating ID for everyone. That's also another major issue. So you have an ID system, but you have to cater for everyone. So in that case, it becomes even difficult. Now There's also this challenge where the ease of data breach is becoming very, even more common. And with each data breach, digital IDs becomes weaker, okay, becomes even far weaker. So that's another challenge we will be looking at and will becoming more and more prominent even as we move into 2023. And one of the things I have said in in other forums, the fact that we have not seen— the digital players have not seen all the remnants of COVID Okay, there are certain crimes committed during COVID that will become even far more revealing as we move into 2023 and 2024. So let me stop here because of time. Thank you.

I feel like Harrison, you could have gone on and on. And on Brian, I'm going to throw this over to you now. What about you? And alongside what Harrison said, are there any other challenges do you think we're going to be facing in 2023?

I think some of the big challenges are really just getting over this hump that both me and Nick had kind of spoken to of real-time and accurate ID verification being the goal and that one click and here you go, here's my ID, and not every single time you log into a website, hey, I need your picture, yourself, your whole KYC process. I think that's going to be probably top priority for not just us trying to input that into organizations and businesses, but also on their side trying to find the right solution to do that and what that looks like for them.

Brilliant. Thank you, Brian. Nick, I might as well chuck the question to you as well. Is there any additional challenges that these two haven't covered that you think we might be coming across?

Yeah, I wouldn't say it's a new challenge, but a long challenge. We've, we've been facing this issue of eKYC for a long time. COVID did a lot to bring it up as, as to where it is today. But we still have a lot of ways to go. And what's really happening here in 2023 is that we actually have solutions to these challenges. We have brand new tech that's only been enabled as of the past 3 to 6 months. So it's literally the bleeding edge of technology and technical innovation. And what we're, you know, filing patents around is this new way to really create a reusable identity network that can be leveraged across all different organizations. We saw this at Money2020 in Las Vegas just a couple of weeks ago. Money2020 is one of the biggest fintech conferences in the world. You know, I think there was 15,000 people there. We spoke with all the major IDV players and dozens of different fintechs and all of them, this what was last year perhaps, you know, yeah, we'll get to that next year. Now it's, it's time to actually address it, right? It's becoming a priority on their company roadmaps of how are they going to address this rise of reusable identity. And the IDV players basically have 3 different ways to do that. They can either build it themselves, they can try to buy someone that's building it, or they can partner with people. Everyone's doing one of those three things and they're actually mobilizing now. So because of this new recent tech that enables this capability of creating reusable ID, the hype is really peaking right now, right at this point here at the end of 2022 and moving into 2023. I think this is going to be a lot more of a commonplace discussion that is had amongst different fintechs, and you're going to see solutions really starting to pervade the market that enables this capability.

Thank you, Nick. I'm actually going to stay with you, Nick, just for a moment. What is OCR technology and how can it be used in KYC?

Yeah, so I mean, I think it's a part of the solution, right? So OCR is the ability to scan a document and to be able to pull all of that data from, let's say, a driver's license out of it and have it prefill onto a website and make it easier. So yes, it is a key component of KYC. I think it's one of the tools that we certainly need to continue to leverage and perfect and, and making sure that there isn't fraud within that section of KYC. But what can be even better is to continue to reuse that data as a verified source of truth, right? Once we know that that data has been verified at a single time, we don't want to be asking people to pull out their driver's licenses or passports and taking a picture every single time they're trying to onboard onto a site. We want them to only have to do it one time and then have a persistent digital ID that they can then port over to other applications and other sites. It makes a much better user experience. And for all of these fintech sites, it creates a much higher onboarding rate. So it's a win-win for everybody. And now that we have the technology to do so, it's just a matter of getting it out there.

Thank you, Nick. Brian, I'm going to come over to you. What do you think we can do to enhance security when it comes to ID verification?

So enhancing the security, that's, I think, top priority for any individuals in this EID space of trying to ensure that, A, your users trust us. Number first and foremost, well, you have to trust us first as the business, but first and foremost, when your user sees the website, they know it's coming from you. They trust that it's coming from you. We're just the, the ones running that information for you on your behalf. In the KYC realm, the future of that is moving to that self-sovereign identity, and then you're in charge of your own protection of that information. That's the whole idea here. It's not to allow Argos to have to house that information. It's you own that. You are the only one that's saying, hey, here's my information. It may say it's been Argos identified, and that's what's proving that I am Brian Knoller, but that's not who's housing that info. You're the one releasing that information to who you want to release it. That's our main goal.

Thank you, Brian. Harrison, I'm going to come over to you. How do you think we can enhance customer experience when it comes to ID verification?

Okay, so, so when it comes to the major thing is to, to minimize the friction, minimize the friction. I mean, I listened to Nick when he talked about persistent ID, okay, or persistent profile. I, I'm a CISO, I will jump to that, but with caution. Okay, because if I have to consistently trust you when that ID is impersonated, okay, there are chances that I will trust the wrong person, okay, or the wrong person will be granted privileges that had not been validated. So if you juxtapose that with a common theme that we are talking about today, which is the zero trust, you will find out that there's a conflict, but that can always be harmonized. So the first thing is to make sure that the friction is minimized, okay? The second thing is to use RICS-based ID verification, okay? So if I have 5 components— if you can look at my 5, I'll give you an example. If you look at my geolocation and you look at my device, okay, and you look at my transaction detail and you look at a number of other features, okay, including my ISP and they are the same, okay, if there's a factor that is missing or that has changed, you do not need to take me through all the process because you have enough data to know that the margin of change is within the acceptable level. So it gives me comfort, okay. So for example, if I change my phone and every other thing is static or remains the same, my, my, the less challenge that I should get should be minimal, should take me through So that makes it easier for me to trust that at least you recognize that something has changed, but again without putting me through all the processes again. Another thing that is very key, remember that a customer also needs to build trust, okay? That it is easy doesn't mean it can be trusted. So you also need to create that occasional verification for customers, either quarterly, is that in certain number, either by transaction pattern, either by transaction limit, so that the customer can have that trust that if any other person assume his or her ID, that that person can be stopped. That is also very key. Another key thing I think we should also do is to automate the process. And I like the idea of the OCR, okay, so that customer, for example, does not need to fill forms and all that. So once you take the ID, use OCR to pick up the data, then run it against different data points. The customer says, okay, instead of taking 2 or 30 minutes to validate or verify the ID, can be done in 2 minutes. It's actually about time. It's not about the amount of work you're doing, it's about the time you're taking to do it. That also will enhance customer experience. But One of the things we must continue to do is to provide awareness and knowledge, okay? So that the customer, some level of transparency, so the customer understands why this has to be done in this way, okay? That also helps to adjust the expectations and help the customer build some level of trust in the processes that an organization have undertaken to validate IDs. Thank you.

Thank you, Harrison. Nick, I'm going to come to you. One final question for you. If there's maybe some people who are watching this summit who manually verify ID and they're looking to maybe switch across to doing it digitally. Any golden nuggets, any bits of advice you can offer to someone who's kind of dipping their toes into the water?

Yeah, yeah. So for us, I know I kind of harped on this in our presentation, but the one-click or free KYC option, it's not going to get any, any easier for you for that. So when I say one-click or free, it means either With our solution, the client already— your end user that you're trying to onboard already has an Unim ID and they're able to onboard with a single click, which is as frictionless as possible as you can currently get in terms of onboarding an end user and having all that KYC verified data. Or we will pay for your KYC, which is just a radical change that you won't find out there. You won't find free KYC capabilities. On the market today. So we are willing to subsidize that entire KYC cost because we understand the importance of building the network itself. So we want to, you know, create this revolution not just from shared secrets and from KYC, but truly into reusable KYC. We see that as the major shift and then the next big step in this entire journey. We have many KYC partners that we're working with and we recommend. There's some of the top players out there in KYC. And they understand the importance of making it reusable as well. So we rely on them to perform the actual KYC itself and do that backend identity verification on our behalf. And all that we focus on is the network itself, right? Making sure that the end fintechs have the solutions that they need and the different options of KYC players and helping facilitate that, that interaction between the KYC player, the fintechs or other relying parties, and the end user. And while we're starting with fintechs, it's going to grow exponentially as we expand out to new markets. We understand that this is where the highest user friction is, knowing that, you know, fintechs require the most data as part of that KYC onboarding process. But absolutely, this could go into travel, into, you know, medicine or anything medical related. And at the end of the day, you know, social media. Anything that you require a username and password for, we can help facilitate that exchange and making it a much lower friction for your end users. So happy to share any further details about anybody else's that's interested in finding a good KYC solution. We can help point you guys in the right direction.

Amazing. Thank you, Nick. And Brian, final words to you. Same again. Is there any kind of advice for someone dipping their toe in the water that you'd like to give?

Mostly do your due diligence, ensure that they're running the system that you want, ensure that they're not just covering the, the countries. Like I mentioned during my presentation, we cover 210 countries and 4,000 ID documents. Find out a little more information, dive into the details, understand what the transmission rates are, how, how many IDs are getting kicked back or rejected for whatever reason. Understand what else is out there, how, what the next step is, you know, make sure it's not a company who's saying, oh, KYC is the end-all be-all. This is the last step you'll ever need. There's no more, no more creation being done. No, no more innovation being done to the, to the solution. Like, like we've been mentioning, the next step is that reusable ID. That's what we're all working on, what we're starting to do with Argos ID of giving you that, hey, here's your— here's all your checkmarks and now it's industry known to be accepted. That's our end goal.

Amazing. Thank you so much, Brian. So unfortunately we don't have time for any more. I just want to finish by saying a huge thank you to Harrison, Nick, and to Brian for joining me on this panel discussion and also for your fantastic keynotes earlier.