In government we trust?
Maybe so, in the quest for digital identity verification.
The Wall Street Journal reported Monday (Nov 12) that a number of banks, ranging from JPMorgan Chase & Co to Citigroup, are eyeing partnerships with a series of government agencies in a quest to make digital ID verification a bit more streamlined and accurate.
The push comes as banks — newly gathered together through the Better Identity Coalition — grapple with the challenges of onboarding new clients in an age where data breaches seem to be an almost daily occurrence and where synthetic ID fraud is ramping.
Against that backdrop, it might make sense that banks and other financial institutions should turn to ID beachheads such as the Department of Motor Vehicles and other government locations where IDs spanning, say, birth certificates and social security cards, are part of daily life. Count on the Social Security Administration too, also a haven for IDs, working with banks — and making sure that people are either dead or alive, among other things.
That’s especially important in blocking synthetic IDs via fraudsters, where separate building blocks of far-flung individual identities are cobbled together to make “new” individuals. Millions of social security numbers are floating around the dark web in the wake of data breaches like those seen with Equifax, so efforts by the Social Security Administration can aid verification efforts by banks.
The banks themselves must contend with the fact that — in the United States, at least — there is no national ID system in place, and they have spent billions of dollars annually on ID verification technology.
The Journal noted that, as described in an interview with Matt Thompson — recently hired by IDEMIA USA to work, in part, on bank-DMV initiatives — “DMVs are the largest footprint for in-person identity proofing. We can build on that to create a trusted digital identity for people who want it to be known on the internet that they’re not a dog.” The aforementioned bank coalition has said that a $200 million annual federal grant program should be made available to states to help handle verification inquiries.
The joint efforts by the financial firms and the public sector speak to a larger issue that any number of stakeholders in commerce must navigate: the balance between preventing fraud and the need for end users (that would be the account holders) to have as friction-free an experience as possible. Banking done online has its lures, speed and convenience among them. Take those away, and the zest for smartphone-driven banking will fade faster than a Pete Davidson/Ariana Grande romance.
The fact remains that a robust digital ID verification approach is ideally one that brings together disparate methods and documents (as noted above) but does it all in real time.
The risk-scoring approach uses predictive analytics to help cut down fraud rates, and also false positives, amid digital account openings. Biometrics, selfies and of course photos of the traditional ID documents (again, from the DMV and the Social Security Administration) can all combine to create an ecosystem that learns from itself.
Paper IDs and pixels, human eyes and AI, private sector and government agencies … all must be combined to give an accurate assurance that people are who they say they are. Intensive effort indeed — but needed, after all, to stay at least a couple of steps ahead of the fraudsters.