What would happen if the 1.8 billion people in the world who don’t have bank accounts, may not have government-issued IDs but do have mobile phones could use their phones to validate their identities and access financial services?
We may be about to find out.
Two dozen of the world’s largest mobile network operators (MNOs) have agreed to provide access to Mobile ID, Trulioo's new verification service. That data will be used to instantly verify 1.8 billion mobile device users around the globe, with the aim of reducing fraud tied to account openings.
The MNOs, working with Trulioo’s electronic identification verification platform (eIDV), taps into 200 consumer data sources spanning government, banking and credit data during the onboarding process. Those data sources triangulate with device-specific information, such as proximity.
In an interview with Karen Webster, CEO of Trulioo Stephen Ufford said that, with such broad reach and scope, Mobile ID will give unbanked and thin-file individuals access to the financial system. Ufford said that in a world where about 80 percent of the populations of North America, Asia and Europe have access to mobile devices – a cumulative five billion souls – mobile verification not only makes sense, it is a necessity.
The announcement today (Feb. 26) follows last month’s initial KYC efforts between MNOs and Trulioo.
“KYC is the use case that wears the white hat in the world these days,” Ufford said. “When it comes to personal data, everyone wants to prevent the bad stuff, the money laundering, the terrorism.”
Now, with Monday’s addition of Mobile ID, he said there’s an opportunity to change the flow of data behind the scenes to involve the consumer, by using the mobile device itself as the token that permissions that information. In other words, putting the carrier between the consumer and the party that wants to verify the identity of that consumer.
The opportunity for Mobile ID is significant, Ufford said. Thin-file individuals can make up as much as 30 percent of a country’s population (in the U.S. that figure is, roughly, at the mid-teens percentage level). In some markets, such as China, there might not even be an extant credit bureau – meaning that new data sources, in tandem with the mobile device, offer verification opportunities that might not have been previously available. Ufford sights, he said, are set on the part of the world that doesn't already have every conceivable data service available – so that everyone in the world can transact safely online using the device that almost everyone in the world has: the mobile phone.
“When a consumer verifies their identity with a third party with a global gateway, there is a permission screen that pops up” asking if it is okay for the carrier to share the individual’s profile with that third party for the sole purpose of verifying an identity.
KYC rules, Ufford said, dictate that firms must find and rely on independent reliable data sources – but the process of verifying an individual can vary widely between countries.
He related to Webster a personal experience when he bought a SIM card in the U.K. and went through a rigorous process: A passport had to be presented, data was entered face-to-face with a carrier agent, and a relationship was in effect established with the carrier itself through that SIM card, long-lived and constant.
Thus, a maxim in banking – “Over the tenure of the account,” he said of the traditional bank/client relationship, “the longer they know me, the better they know me” – holds true in the mobile age, and in the interactions between customer and mobile phone carrier.
“You’d be surprised how many immigrants or thin-file clients have skipped the bank account … but have done the SIM card piece,” Ufford noted. “The carriers have a unique position in the ecosystem in that they touch every single one of us in one way or another.”
But even with the MNOs, he said, the required IDs vary from market to market. Some markets, such as in the U.S., do not mandate government-issued IDs to create mobile phone accounts.
And even the type of mobile account can dictate verification efforts. In the U.S., for example, only the post-paid accounts have been verified. In China, both prepaid and postpaid accounts are verified.
The carriers have set up flags to determine if accounts are prepaid or postpaid to determine if parties in a given country should rely on these data sources.
As Ufford noted, the company covers eight markets and 24 MNOs. By operating with Trulioo’s gateway, he said, the company brings those two dozen MNOs (which in their own markets are limited to about 20 percent market share in terms of coverage) under one roof, one so to speak, with one contract and interacting with a single API. Thus, where once a patchwork quilt was at work, billions of individuals are suddenly able to be verified.
“We have a huge ecosystem of data providers when it comes to KYC,” he told Webster. “Very few [other avenues] offer the coverage and the freshness of the mobile carriers … and the direct relationship with the consumer that enables a whole different layer of identity to trust.”
In the inevitable discussion on security, Ufford maintained that safety of data and of identity is always top of mind. While he noted that no system is foolproof, the executive stated that triangulated efforts ensure the phone, the phone number and the identity of the user are all working together in unison, in a verifiable way.
“I always picture somebody that’s far away in the middle of a rice field,” he said, “with no bank account … they have their smartphone and they are sending money to relatives across the country using mobile minutes. And the only highly trusted third party that knows about the interactions, who the people are or how the value is exchanged is the carrier.”