Doing business in far-flung locales means contending with a veritable Tower of Babel – not just in disparate languages, but in regulatory environments that are varied but never simple.
And all the while, data breaches abound as fraudsters ply their trade. To that end, how to know that someone is who they say they are in the midst of a transaction? In the increasingly digital and mobile age, data useful for authentication purposes might be widely available, or may in fact be rather lacking, depending on the market. Nonetheless, businesses across any number of verticals need to ensure that they meet Know Your Customer (KYC) requirements.
To that end, Trulioo said Wednesday that it has launched the first Know Your Customer (KYC) solution that connects to two dozen mobile network operators (MNOs), covering 1.8 billion mobile users across the globe.
Those MNOs span Canada, China, India, Spain, France, Switzerland, the United Kingdom and the United States, the company said. MNO authentication is offered through GlobalGateway, the electronic verification platform, which is in turn tied to 200 data sources across credit bureaus, government agencies and financial firms, accessed via API.
In an interview with Stephen Ufford, CEO of Trulioo, the executive said that the premise of using mobile carriers as a mechanism to verify identities makes sense, as more people are transacting away from big banks and conducting life online. Traditional methods of online authentication don’t capture trusted identities as well as they once did, he said.
“We are finding that young people, immigrants – as the world is becoming much smaller, those regional systems are becoming less effective at including as many people as they were intended to,” said Ufford.
In emerging markets, the problems are even worse, as there are no existing systems to capture this data – and many people do not have the data in the first place, or may not have government-issued IDs, for example. Thus, there are certain populations and customer demographics that simply cannot be verified, and there are new services offered across the financial spectrum that they might like to use, but cannot.
Yet 4.3 billion individuals have smartphones, Ufford noted, with the technology providing a conduit to interact with companies across all verticals. The mobile network operators in the aforementioned countries know their customers well, with an in-depth knowledge of who wields the phone and what they are doing with it.
Combining mobile data with a device, said the executive, switches the power “of proving who you are back to the hands of each of us. Just as the government does with a driver’s license or a password you decide when to verify your identity using that instrument.” Specific knowledge can be gleaned from biometrics or geolocation, or even a text message – and operators are increasingly relevant in a world where trusted data is paramount.
The shift of using a mobile device with the data behind it will force the ecosystem to put the user in between the transaction, Ufford told PYMNTS. “I don’t post a picture of my driver’s license on my back for everyone to look at,” he said by way of tongue-in-cheek illustration, adding that “I decide when to share and verify my information. That is how it should be.”
This is a step forward in security, as it boosts control of data. Ufford offered up an example where if every time a Social Security number was used for a transaction, an email or text message was sent to the phone with a PIN code, which would then have to be verified by the end user as an additional measure of safety. Think of the phone as a token. The cost of intercepting a PIN code sent to a phone is likely high enough to discourage would-be hackers.
So, against a backdrop of emerging markets, the drive for financial inclusion, security efforts and coverage, ease of use counts for a lot. Continued Ufford, “dare I say … another tentacle is the sexiness of it all? I have experienced very little when it comes to opening accounts on my phone or signing up for an app or website that rivals what I call ‘the Facebook experience.’” It’s simply a matter of getting in with a click or swipe of the thumb, he said. The experience is similar on mobile, and, with the inclusion of the right data, the major carriers of the world have the opportunity to create the same experience for their own users.
“All the new use cases are global,” Ufford said of the last five years, citing Stripe or Citibank simplifying the process of opening accounts across their mobile apps. “After all,” he told PYMNTS, “the internet is not regional.” Thus, he pointed to GlobalGateway as an aggregation of hundreds of different services around identity, with an ecosystem of partners.
For firms seeking to onboard new customers, the key challenges in going global, he said, lie in contracting and technical integration. That especially holds true with satisfying KYC requirements, and in instances where a company may launch into dozens of new countries simultaneously. Think of a financial firm, for example, that is coming to new markets without any branches already in place – and where the key question in implementing mobile business processes is, as Ufford put it, “how are you going to open those accounts? They need a contracting paradigm that won’t take a millennium to get done.”
That’s no small feat with carriers spanning the globe, operating as large companies and across any number of languages. When it comes to identity verification, they only have 20 to 50 percent of the market, and they need to cover, well, everybody else. “You cannot deploy an identity solution that only covers 20 percent,” Ufford said, a daunting task for Trulioo’s customers.
How to triage on a market-by-market basis, and to make sure the K (know) in KYC is, well, known? “Leave the K to the customer,” where GlobalGateway builds a two-sided marketplace, said Ufford, and where “you provide everything you can get your hands on in any given market.” The idea is to be transparent with data and allow for customization. “We provide a catalogue approach. You come to the department store of data and you order what you need. You make the selections, you design the rules and then you set up your own identity verification product so you can fulfill your requirements,” he told PYMNTS.
Where to go from here? The roadmap, said the executive, includes governments joining GlobalGateway through a trend, powered by fast-moving regulations surrounding identity. There are still 30 or so MNOs remaining to join the 24 that are onboard. The trends are that “both governments and carriers are going to keep us busy for the next two years.”