Who goes there? Meeting the global identity challenge

COVID-19 has triggered a seismic change as governments, businesses and individuals balance what seem to be the opposing challenges of staying solvent and staying alive.

Consumers have transformed their behavior to keep safe from coronavirus infection, maintaining their basic supplies and general lifestyles during repeated lockdowns by making a dramatic shift to digital everything. As a result, bricks and mortar shops, hospitality and leisure providers have had to pivot at unprecedented speed, to provide take-away, online, streamed and click-and-collect options, to salvage some remnants of the success they previously enjoyed.

To enable this, they’ve completed years-worth of transformation projects to introduce secure eCommerce capabilities in a matter of weeks.

It’s tough for existing financial service providers, too. They too are dealing with a huge increase in digital transactions – and a commensurate rise in fraud – all while furiously trying to keep pace with the seamless experiences that customers are being offered elsewhere, ever-mindful, of course,  of the regulated environment they’re working in.

All of which spells a unique opportunity for identity verification solutions provider Trulioo, which is stepping up to the challenge of a demand never seen before. Billing itself as a one-stop-shop for secure customer onboarding and authentication, it has grown to serve hundreds of small, medium and large clients in 195 countries and counting – it recently extended its operating footprint to Pakistan.

Trulioo provides them with everything from initial user experience strategy and design, through to solution implementation via its extensive range of plug-and-play solutions, and supporting analytics.

Initially serving regulated industries, including financial services, the past year has seen Trulioo bolt-on non-regulated sectors like retail, marketplaces and community platforms. And, boy, is it glad it did, given the demand for eCommerce over the past eight months, which has driven an increased need for Trulioo’s secure online identity verification solutions.

Its proportionate, risk-based approach to ID verification is a flexible, modular service from which clients pick what’s appropriate for them, depending on their regulatory status, where they are in their business lifecycle, which demographic/channel they’re dealing with, and where in the world they are onboarding. And all this against a backdrop of increased competition and closer regulatory and media scrutiny, linked to high-profile cases where bank controls, in particular, have spectacularly broken down.

The company’s Chief Operating Officer, Zac Cohen, gave The Fintech Magazine’s Editor in Chief, Ali Paterson, his take on this turbulent marketplace and what Trulioo is doing to help organizations of all shapes and sizes adjust to it – both now and for the future.

The Fintech Magazine: What have been the significant ID and fraud prevention developments of 2020 and how has it impacted Trulioo?

Zac Cohen: Businesses have had to deal with an incredibly fast shift to offering their products and services through digital channels. That creates lots of pressure around updating their systems and tailoring their services to this new, online-only reality. Meanwhile, consumers, forced into this online-first environment, have also faced changes related to privacy and security, how their user data is being leveraged in that online world, and how the companies they interact with protecting it.

Many large banks already had systems or processes in place that they’d built, but are having to accelerate development because, whereas a portion of their services might previously have been available through a digital-only channel, now they all need to be. And, with more organizations offering online-only vehicles, competition for a good user experience is much higher. Banks and neobanks have to make sure their onboarding workflow is high-caliber, or they’ll lose customers.

Neobanks and digital-first banks, meanwhile, had an advantage, up until now. They were more attuned to leveraging technology first, taking the entire workflow around the first interaction with a new consumer to an online environment. What’s been changing is the dynamics and demographics of the environment itself.

We’ve expanded the number of customers using our services, and the use cases, by a wide margin. We’re now helping non-regulated institutions as well as these regulated ones. A lot of new, non-compliant customers have come to us looking at risk, fraud prevention and how they can create a safe ecosystem for users, and we’re building that for them.

Basically, when it comes to identity verification, we’ve shifted from a nice-to-have to a must-have digital world for organizations and consumers. Businesses have had to upgrade their digital onboarding applications quickly, while consumers are having to use more online services and to use their personal information more readily, raising concerns around how organizations are protecting it, and how much users are willing to give at any point in time.

TFM: Beyond the immediate crisis, what are the biggest challenges to delivering ID verification effectively and maintaining a robust process, especially when scaling cross-border?

ZC: It’s very rare, these days, that organizations’ long-term plans involve a single country. Most neobanks that launch in the UK or Canada, where we are based, for example, have plans for expansion outside those markets in time. So, they need to make sure they can scale their process and take advantage of the global economy easily.

There are two things to note here. Regulation has created a huge shift towards privacy and processing controls for onboarding consumers in a digital world. Demographics have also changed. We’ve seen a younger generation come online, and a more global environment where institutions have had to look at their rollout and technology stacks to address changing jurisdictions from a central console.

These two major shifts have forced organizations to rethink how they manage onboarding and their identity verification stacks, to continue to provide a quality service, worldwide. Because, wherever they are, consumers resist too much friction in the process, or it is incredibly slow. They expect a high-value service quickly, that explains to them why they’re going through a certain process. So, once a company builds a compliance and onboarding workflow that keeps users safe and reduces fraud, they need to be able to pattern match that and scale it out through multiple countries, as they go. We’ve had a ton of success with this.

We’ve purpose-built our technology to make sure we can satisfy identity verification requirements for everything from a single person startup to a global organization with tens of thousands of employees in countries worldwide. The need for this will only increase with ever-more rigid regulatory requirements and fraud that’s increasing dramatically with the COVID-19 pandemic.

TFM: Trulioo says it takes a modular, proportionate approach to identity verification. Can you talk us through it?

ZC: During the account opening process, it’s all about risk mitigation and compliance obligations. Then, organizations need to look at how much friction they’re placing on the individual trying to set up. Too much and they might abandon the process; not enough and they risk increasing fraud.

We recommend our customers take a risk-based approach, using specific techniques for initial authentication then, as the individual does different activity within an application, like trying to make a large transfer or open a different service within an organization, layering in additional protocols to make sure they’re continuing the identity verification process. In the banking world, we call that “perpetual KYC,” which is based on different triggers that change or add to the identity verification process as someone goes along, rather than trying to force every single protocol into the initial authentication stage and risk the user abandoning.

Every single new technique you layer in will reduce the potential that the individual signing up is not who they say they are. This could be just verifying their name, address, date of birth or other attributes through a reliable database; or also collecting information from photo ID, having the individual take a selfie for image comparison or asking them to verify their bank login. However, there are low-risk and high-risk applications, so businesses need to understand their user onboarding workflow to ensure they’re not putting low-risk individuals through useless procedures and vice versa.

TFM: How useful is biometrics as an authentication technique when adopting this risk-based, layered approach?

Of the authentication options, biometrics is definitely an effective product to use. I wouldn’t say it’s the lowest friction, although friction all depends on the use case and user. The comfort users have with one process or another change over time. Whereas 15 years ago, people were nervous about putting any type of information online, nowadays they have varying degrees of comfort with submitting a passport photo or something similar.

It’s critically important that organizations make sure their technology stack is versatile and dynamic enough to allow for these changing attitudes, and that they’re transparent about the information they’re collecting and the security protocols that are in place. Nothing is worse for reputational risk than breaching personal information or, from a consumer’s perspective, more important than safeguarding their information and only using it when absolutely required.

TFM: Can you explain Trulioo’s marketplace approach?

ZC: There are many different point solutions that can address a single use case for identity verification or a certain type of fraud. However, when you look at the broader activity of organizations today, and those that operate in multiple countries, with different demographics and sometimes dozens of different use cases, point solutions begin to break down very quickly.

Trulioo has always taken a marketplace approach. Our platform allows a single application programming interface (API) access point to dozens of different products and services, and hundreds of different data partners on one platform – a dynamic solution to changing use cases they might have at any point in time.

Then there’s our intelligence layer: information we’ve learned from analysis and managing our network. This means we can make strong observations and recommendations for our customers, in terms of best practices.

The future, for Trulioo, is to be the single most robust identity marketplace in the world, and we’re becoming that by releasing more products and services that can answer the identity question in a modular way easier. We’re helping businesses achieve a frictionless experience and launch in any country they wish, by applying the right type of product at the right time.

TFM: How do we balance financial inclusion and onboarding people with little or no ID seamlessly?

ZC: One change we’ve identified is individuals moving from country to country, area to area, and organizations launching their products and services to a wider net of individuals.

We want to provide access to the online economy for people who are new to a country, or individuals in developing countries that might not have the same access to a passport, birth certificate or other documentation that most of us take for granted. This is a very important challenge for the identity industry overall and, in our view, the best way to approach it is to expand the types of information you can leverage to perform verification.

Three, four or five years ago, we would not have used a mobile phone number as a main identifying attribute for an individual or have had the ability to accept a residency permit as opposed to a passport or birth certificate. These kinds of new and different attributes reflect the changing dynamics and demographics of people that are new to a country. We can now leverage a single technology stack as part of a risk-based approach to prove that individual’s identity.

Financial inclusion is very close to Trulioo’s heart and we love working with organizations that are trying to meet that challenge head-on. It’s all about participation and accessibility, regardless of who someone is or where they’re from.

This article first appeared on Fintech Finance.