The questions that seem simplest tend to be the most complicated. The answers to such questions also usually end up having more significance than the answers to other inquiries.
Excuse the detour into pop philosophy or Jedi teachings, but that is the case when it comes to the question “Who are you?” Those three words strike at the heart of identity, and mean so very much when it comes to the efficient operation of the global digital economy and its continuing growth, whether via retail, payments, financial services, healthcare or other areas.
In an new PYMNTS interview, Reinhard Hochrieser, vice president of product management at authentication services provider Jumio, provided an overview of the global state of ID verification and authentication, along with access management — and how improving those processes and technology can lead to gains for merchants and financial institutions. As digital payments and commerce grows — and as consumers and regulators focus more on issues related to web security and privacy — digital ID continues to take more of a role in addressing those concerns, and helping online companies and organizations win over more consumer and otherwise scale.
ID Data Points
Hochrieser told his story through a handful of data points, all of which serve to illuminate the challenges and opportunities in the digital ID space as 2020 and the decade approach. For instance, he talked about a recent McKinsey study that found a 13 percent projected growth in GDP for countries that embrace digital ID systems.
According to Hochrieser, part of that growth comes from the benefits that efficient digital ID can bring to the estimated 1 billion around the globe who lack “legally recognized forms of identification.” After all, digital ID opens the door to a more seamless and secure world of financial services, retail, payments, healthcare and other consumer activities. That is especially true, he pointed out, as “more businesses go online” and scale their operations to more international markets. “Everything is moving toward digital.”
That ongoing, powerful move toward digital is boosting the appeal of more secure and more seamless verification and authentication methods — and that is especially true for biometrics. According to one estimate, the global biometrics market is estimated to be worth $59 billion by 2025. Biometrics has clearly moved out of its infancy stage when it comes to mainstream consumer use, thanks in large part, Hochrieser said, to the efforts of “Apple, Samsung and other manufacturers” that made biometrics a part of mobile devices, which in turn has made consumers used to that authentication and verification method.
In addition, online security, verification and authentication systems based on “knowledge” are easy for criminals to break and exploit. “It’s rather easy for fraudsters to answer questions based on your ZIP code and date of birth,” Hochrieser told PYMNTS. “This info is easily available on the Dark Web. It’s easy to spend just a few dollars to get that information.” That information, in turn, helps fuel even further growth of account takeover and forms of fraud, he said.
Indeed, Jumio has taken an authentication approach that employs biometric markers. The company’s authentication technology asks for various ID details from a consumer, and requests for that person to submit a selfie. That provides another layer of proof that the consumer is who they have said they are — not a parent, grandparent or an older, ne’er-do-well uncle, cousin or friend when it comes age-restricted product, or a criminal when it comes to fraud.
That said, there are still obvious, if seemingly mundane, weaknesses among the consumer population. That includes phone numbers.
A majority (51 percent) of U.S consumers have identified their cell phone numbers as key parts of their personal identities. Not only can numbers be easily obtained, they can serve to help unlock consumers’ identities and make life easier for fraudsters. According to Hochrieser, there is another problem that arises when people switch phone numbers: The reuse of those old numbers, a kind of gap that fraudsters can also exploit if they move quickly enough. Every bit of personal data — especially if unguarded — is a potential tool that criminals can use to hijack identities and steal funds and products.
Digital ID is a part of daily life for untold numbers of consumers, and those efforts will only gain more steam in 2020 in beyond as, Hochrieser pointed out, most of us live out more of our lives online. As well, the quickly growing Internet of Things will require strong digital ID security, lest consumers lose trust in that ecosystem, a prime character when one imagines the near- and medium-term future of payments and commerce. The battle never ends.