Identity isn't static — authentication shouldn't be either.
In the latest installment of PYMNTS Commander In Chief Series, John Dancu, president and CEO of IDology, shares his thoughts on why the identity verification space today can benefit from a broader perspective that includes not just traditional know-your-customer (KYC) attributes but real-time knowledge of location, device and other data points.
Here is an excerpt of the conversation.
PYMNTS: How would you define your company’s approach to innovation?
JD: There are a couple of factors that define our approach to innovation.
First and foremost, our customers are the main source of what drives our innovation. By actively listening to our customers, we gain a better understanding of the real problems in the marketplace. The ideas flow from that.
The other factor is that we want to deliver best of breed solutions to the marketplace — our solutions have to bring real value to our customers. When we create new solutions, we are focused on the questions how are we going to solve for x and will this improve our customers' processes?
PYMNTS: Where do you look for innovative ideas, and why?
JD: Our customers are probably the biggest source of inspiration that we have. IDology works with a broad range of industries, which gives us a unique perspective to see market trends. By keeping an open dialogue with them through regular visits and industry conferences we hear firsthand what they are experiencing.
That’s where we get our inspiration — but it’s the ability to deliver on solving these problems that makes it all come together. The key is listening — our platform has to be able to adapt quickly to changes in fraud and market conditions our customers face.
PYMNTS: What is the most innovative thing you’ve ever done?
JD: For me, it was taking IDology from a very small age verification company in 2005 to what we are today.
PYMNTS: What do you wish you had more time to do?
JD: I wish I had more time to read for pleasure. We live in such a connected world that it’s hard to unplug sometimes. But I really do enjoy the discovery and relaxation that a good book can bring.
PYMNTS: What do you think that most people underestimate about innovating in payments?
JD: I feel that sometimes in the flurry of excitement about the industry that some people lose focus on what is most important — customers. We have to deliver solutions that keep an eye on verifying end users and stopping fraud, but at the end of the day, we also have to drive revenue for our customers.
If your solution doesn’t help your customer succeed, you might want to re-examine what value you really bring to the market. For example, our Digital Authentication solutions were designed to provide authentication that has the demands of today’s users in mind. It has to make the process as seamless as possible or customers might abandon their carts or not sign up for a service.
PYMNTS: What keeps you up at night?
JD: As a serial entrepreneur, you learn that sleep is your friend. Not sleeping only makes it harder to address the next day's challenges. So the answer is not much.
What concerns us in the payment solutions space are the changing patterns of fraudsters.
Fraud tactics change so quickly and frequently that we're always focused on delivering solutions that can adapt quickly to counter them. There is so much breached data available to criminals that they are able to create things like synthetic identities. They have many avenues to share tactics, targets, and tips. It's a challenge.
But the industry is getting better at collaborating and sharing fraud information. IDology enables our customers to share consortium data and we host annual conferences to bring the industry and law enforcement together to help get in front of what fraudsters are doing.
PYMNTS: What trends and changes are you watching that are affecting the industry and your role?
JD: There are a few things that are happening in the industry that are shaping what we do. One is mobile devices.
Most people have a smartphone and are using it as their primary entry point into financial services. This is great unless your mobile presence is not up to par. FIs have to make mobile easy and frictionless for consumers otherwise they are going to miss out on a lot of business. Apps and mobile sites need to deliver a seamless experience from account opening through transactions.
Another is data breaches and fraud. There is so much information available on the dark web; fraudsters have a dizzying amount of source material to work with. That being said, payments organizations need to adjust what they are doing in terms of identity verification to fraud prevention to address these issues.
To stop fraud now, identity needs to be viewed from a broader perspective that includes not only traditional KYC identity attributes but also activity, location, device and other characteristics that can be verified in real time and not part of a static database.
PYMNTS: What product has had the most impact on payments in the last five years, and why?
JD: The mobile phone. It has completely changed the way consumers interact with financial institutions and their expectations of them as well. So many services and products are delivered through mobile devices and it keeps growing.
As a result, consumers have shifted a good portion of their banking activity from the branch to a mobile device. There have also been so many options opened up to traditional consumers and the unbanked in the last 10 years that would have never been possible without innovation in the mobile space.
PYMNTS: What person or company do you think “gets” innovation, and why?
JD: I think Amazon is a great example of an innovator.
When it first started out over 20 years ago, it was an online bookstore. However, its innovation and diversification have now made it the most valuable retailer in the world. It has really set the standard for customer experience for online shopping and continue to innovate.
Its culture is a huge part of that success, too. The company likes to move fast, hires really smart people and doesn’t get too bogged down in corporate bureaucracy.
PYMNTS: What advice would you give a young innovator in this space, and why would you tell them to heed it?
JD: Stay nimble and keep your customers' bottom line in focus. This industry changes rapidly; staying relevant is hard to do, and keeping customers happy is even harder.