Authentication

Melissa On The Next Frontier For Digital Identity

The world was already going digital before COVID-19, but the pandemic sped up that process tremendously, Barley Laing, the U.K. managing director at Melissa, told PYMNTS in a recent conversation. The crisis has also raised the bar for brands, merchants, retailers and financial institutions looking to meet their customers on digital channels that are suddenly so much in demand.

“Online transactions were building steadily over the last decade or so, but the pandemic [has] increased the urgency for organizations, merchants and intermediaries to ensure that they have not only got a quick and easy procedure for customer onboarding or accessing their accounts — but also, vitally, to ensure that they are validly dealing with the person they think they are,” Laing said.

 

That’s meant busy times for Melissa, which has spent over three decades in the digital-identity verification and authentication business. The company has seen an unprecedented spike in demand for its range of offerings and tools in the past several months. Firms worldwide are getting used to the idea that they might not interact in-person with their customers nearly as often, so they must optimize their digital services and verify online customers’ identities.

Laing added that that needs to happen immediately, as scams are multiplying during the pandemic. For example, fraud across all financial products in the U.K. rose 33 percent in April. Laing also noted that regulations governing customer authentication are growing stricter than ever.

“The reason we’ve seen a marked increase in inquiries for all of our services is because they all enable those online transactions to take place more speedily, more efficiently and with a higher degree of accuracy than ever before,” he said. “And what we’ve got our minds on now is very much what else we can bring to the market that would provide an advantage to our customers.”

Three Ways To Verify Identity 

Melissa’s ID offering breaks down into three groups — an identity verification solution, a document verification offering and a biometric authentication service.

Identity verification involves gathering all relevant consumer information and running cross-checks against the data provided. Laing said that might mean matching someone’s name, address, email or phone number against reputable data streams like government and utility records. The company aims to make sure all information matches up properly — i.e., the name on a credit application matches the name public documents indicate should be associated with the address provided.

Document verification allows clients to check and verify in real time more than one of 4,000 global ID document types, like a driver’s license, during the online customer onboarding process. Lastly, biometrics allows clients to compare user photographs to things like drivers’ license photos to confirm a match.

Using AI And Other Tools To Fight Fraud 

However, Laing said all of these areas need continual modification and tailoring. For example, he said biometrics could be hackable with photographs, which is why Melissa’s technology checks for eye movement to establish that the person behind the ID is real.

Melissa is also currently working to enhance artificial intelligence, so its document identification can not only scan characters but actually start to “read” them. Laing said there’s “kind of a quiet revolution going on” where the industry is combining optical character recognition with artificial intelligence “so that we gradually move from not just capturing and trying to match information, but actually building more of a level of understanding behind the data that’s being captured. It’s called ‘semantic technology,’ or ‘semtech.’”

He said that’s where the future of digital document authentication is going, particularly as the future looks increasingly digital across more and more verticals.

Electronic Identity Verification Takes Center Stage 

As for electronic identity verification, or “eIDV,” Laing said it might be easier to list the places where it isn’t heading than the places where it is.

“We see the need for eIDV over all sectors,” he said. “With transactions becoming increasingly online, I think all sectors need to embrace the technological solutions that are out there because they are comparatively cheap. If you look at the cost of embedding an ID solution into your service or platform, [that] is going to be tiny compared to the risk associated with noncompliance or the risk associated with fraud — or the risk of losing customers to your competitors who are using a technological solution that you perhaps haven’t chosen just yet.”

All in all, Laing said that what the pandemic has thrown into sharp relief is the need for quicker, slicker and more effective solutions for things like identity verification. He said the technology that exists is improving, and firms with the best chance of making it through the pandemic and into the coming highly digitized world will be the ones that embrace it.

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

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.

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