The Science Behind Affirm’s Identity Data Play

Digital identities are gaining popularity across industries as businesses, services and other operations increasingly move online. Consumers are normalizing the use of digital identifiers, such as biometrics or passwords, rather than presenting physical identity documents like driver’s licenses or passports. Even services that have existed entirely offline, like air travel, are adopting digital processes, with passengers presenting IDs via smartphone or facial recognition scans.

Increased technology adoption brings along additional security concerns, however. Victims are often completely unaware when their digital identity has been compromised. Identity companies and third-party security providers are exploring several options to keep these methods secure, but many have been met with consumer skepticism.

In the November Digital Identity Tracker, PYMNTS explores the latest developments in the world of digital IDs, including France’s new biometrics-based ID solution, the declining trend of synthetic identity fraud and the complicated ethical questions surrounding the implementation of digital identity.

Developments From Around The Digital ID World

The latest entrant to the government-issued digital ID scene is France, which recently announced a new national identification program that leverages facial recognition biometrics to verify citizens’ identities. The program is expected to launch in November, but has taken heat from privacy groups and the country’s own regulatory agencies, which attest that the initiative could potentially violate the GDPR. The French government has argued, though, that biometric information will not be stored in any database.

Another non-corporate entity exploring new digital ID implementation is ID2020, a collaboration between several players in the space that includes Accenture, Hyperledger, Kiva and Microsoft. The alliance is currently rolling out a plan to provide digital identities alongside vaccines in developing countries by working with the Bangladeshi government and Gavi, the Vaccine Alliance. The crossover between under-identified and non-vaccinated citizens is quite high, and ID2020 sees the synergy as an opportunity.

Digital identity is facing some problems with success, though. Synthetic identity fraud continues to grow, but far slower than when it ran rampant in 2015 and 2016. Its balance rose from only $1.01 billion in Q2 2018 to $1.02 billion in Q2 2019. The decline in synthetic fraud growth is attributed to greater adoption of fraud protection programs.

For more on these and other digital identity news items, download this month’s Tracker.

Affirming Digital Identities Via Credit Reports And Machine Learning

Proper identity verification is a priority for any financial service, as a mistaken identity could result in a financial loss at best and a compromised identity at worst. Affirm, a point-of-sale lender partnered with more than 3,000 merchants, leverages a combination of credit report information and machine learning to verify identities, and prevent these losses.

For this month’s feature story, PYMNTS spoke with Affirm’s Sandeep Bhandari, chief strategy officer and chief risk officer, and Nitesh Kumar, senior director of data science, about the five key data points the company uses to ensure its customers are legitimate.

Deep Dive: Digital Identity Practices Continue To Raise Ethics Concerns

Digital identities becoming more widespread means that questions about their ethical implementation do as well. While going digital drives engagement, and even world economies, it can also compromise individual privacy, infringe on civil rights and restrict access to vital government services.

This month’s Deep Dive explores the myriad of ethical questions surrounding the concept, as well as stakeholders’ proposed ethical frameworks and implementations.

About The Tracker

The Digital Identity Tracker, done in collaboration with Jumio, is the go-to monthly resource for updates on trends and changes in the digital ID industry.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.