Digital Identity Tracker™

NOVEMBER 2018 DIGITAL IDENTITY TRACKER™

Balancing Digital Fraud PREVENTION WITH USER EXPERIENCE, EDUCATION

Onboarding customers safely, without sacrificing speed 7Page 7 (Feature Story)

The World Bank dives into digital identity 12Page 12 (News and Trends)

The top providers and rankings 22Page 22 (Scorecard) DIGITAL IDENTITY TRACKER™

TABLE OF CONTENTS

03 What's Inside The latest on digital identity credential developments from Africa to Europe and beyond

Feature Story 07 Paul Mennega, chief operating officer of Goldmoney, talks about how the company uses automation and education to build trust with customers and onboard new users securely

12 News and Trends The latest digital identity headlines

18 Deep Dive PYMNTS examines how nonprofit organizations are using digital identity tools and credentials to help those in need

21 Methodology Who’s on top and how they got there, including three sets of top provider rankings

Scorecard 22 The results are in. See the highest-ranked companies in a provider directory featuring more than 150 major digital identity players.

About 94 Information about PYMNTS.com and Jumio

Acknowledgement

The Digital Identity Tracker™ is powered by Jumio, and PYMNTS is grateful for the company’s support and insight. PYMNTS.com retains full editorial control over the findings presented, as well as the methodology and data analysis.

rom Europe to Africa, governments around the world are working toward digital identities by rolling out new identity verification systems and platforms for their F countries’ residents.

In some cases, these platforms are moving closer and In recent weeks, a growing group of international players, closer to maturity. Take the U.K.’s GOV.UK Verify system, organizations and solution providers have been making which is now being operated and funded entirely by digital identity developments of their own. the private sector. In a written statement, Minister for Implementation Oliver Dowden said the U.K. government Here’s a quick snapshot of recent digital identity was turning management and upkeep of the service over news: to a group of commercial partners including Barclays, For instance, the European Union recently saw its Digidentity, Experian, Post Office and SecureIdentity. latest digital identity-related regulation take effect. The These players will continue to be able to authenticate electronic identification, authentication and trust services customers using the Verify system. regulation, also known as eIDAS, went into full effect last month, forcing the union’s member states to recognize Other countries, meanwhile, are just getting their official national eID systems. According to Andrus Ansip, digital identity programs off the ground. In the Middle European commissioner for the digital single market, the East, the United Arab Emirates’ Telecommunications new regulations will help save consumers time and save Regulatory Authority (TRA) recently released UAE PASS, businesses more than €11 billion ($12.5 billion) each year. in partnership with digital identity technology provider Smart Dubai. The platform grants residents access to In some regions, however, many consumers lack any local and federal government services and information, formal identity at all. More than half a billion people as well as other products and services from private and in Africa currently have no way to prove their identity, public partners. which makes them more susceptible to criminals,

such as human traffickers, and limits their economic and implementation of digital identification systems, opportunities and even their social, political or civil including startups, foundations, non-governmental and rights. Now, several international organizations are intergovernmental organizations. increasing access to digital identity credentials on the continent. Similarly, the World Economic Forum (WEF) recently announced that it would work with the World Identity The World Bank, for example, recently launched the Network (WIN) to create a digital identity platform that latest edition of its annual Mission Billion innovation meets five different requirements. According to a press challenge, calling on stakeholders in a variety of release, the pair will create blockchain-based digital industries and environments to establish legal digital identity offerings that are “fit for purpose,” inclusive, identities for all consumers. The challenge is open to useful, secure and provide a range of choices to academics, entrepreneurs, scientists and others, as well consumers. as organizations involved in research, advocacy, design

Even the UN is getting involved in digital identity efforts. In a recent speech to the organization’s General Assembly, Vera Songwe, executive secretary of the Economic Commission for Africa (ECA), said that digital identity development could provide opportunities for economic development in the area. The lack of identity verification tools and credentials available to African consumers has created a demand for solutions, she said, and other conditions, such as increased connectivity, could help boost digital identity efforts on the continent.

Balancing digital fraud prevention with user experience, education Financial services companies are under more pressure than ever to both keep customers safe from fraud and provide a simple and speedy user experience. But balancing those two priorities can make onboarding new customers complicated.

In the latest Digital Identity Tracker™ feature (p. 7) Paul Mennega, chief operating officer (COO) of Goldmoney, a Canadian financial services firm that facilitates the purchase and sale of gold and other precious metals, talks about how the company uses automation and education to solve these problems, build trust with customers and onboard new users securely.

November Tracker updates This month’s Tracker features more than 150 top providers from around the space.

Projected CAGR of the identity and access 14.3% management market through 2023

Estimated share of cybercrimes 85% that go unreported

Average cost for a consumer’s entire digital identity on the Five Fast Facts $1,067 black market

Increase in identity theft cases 125% in the U.K. since 2007

$800 Total value of cryptocurrency stolen by fraudsters in the first half of 2018 due to million identity breaches

We want to be around in 100 years, and to “ do so, we need to do things the right way.

PAUL MENNEGA Chief operating officer of Goldmoney ”

inancial services firms are under attack. According mean the difference between success and bankruptcy, to recently published research, financial players are according to Paul Mennega, chief operating officer Fsome of digital fraudsters’ favorite targets: They fall of Goldmoney, a Canadian financial services firm that victim to cybersecurity attacks 300 times more often than facilitates the purchase and sale of gold and other businesses in other industries. precious metals.

For financial services firms, security breaches take a toll “We want to be around in 100 years, and to do so, we on not only their reputations, but also their relationships need to do things the right way,” Mennega told PYMNTS with customers. To top that off, cyberattacks can cost in a recent interview, which means establishing trust with them up to $2.67 for every dollar stolen by fraudsters — clients. more than in any other industry. But earning that trust can be tricky, Mennega said, and Unsurprisingly, companies are investing heavily in new requires top-notch security that complies with financial tools and technologies to curb cybercrime. Nearly 90 rules and regulations, as well as digital fraud prevention percent of firms plan to increase cybersecurity investment efforts that benefit the user experience. next year, according to one report — a decision that could

Onboarding issues Onboarding is one of the biggest challenges for financial services firms, Mennega said. When customers sign up with Goldmoney or other financial services providers, they expect to do so almost instantly — from mobile devices or computers — without interruption, Mennega noted.

But offering immediate onboarding is easier said than done. Companies like Goldmoney face a wide range of financial regulations, especially know-your-customer (KYC) and anti-money laundering (AML) requirements. These rules require companies to learn more about customers’ identities and backgrounds by reviewing government-issued identity credentials — such as passports, for example — before allowing them to complete transactions.

Goldmoney had, in years past, usually relied on human experts to thoroughly review the documents manually. The company also partnered with credit reporting services to help it learn more about clients quickly. But in the modern era, manual reviews don’t move quickly enough to satisfy consumers’ need for speed, Mennega said.

“One of our biggest challenges is establishing an appropriate balance between client security, regulatory compliance and an improved onboarding and verification experience,” he said. “Everyone wants things to happen quickly, everyone wants instant gratification.”

Satisfying consumers’ need for speed To offer the instant service that customers demand, or at least something close to it, Mennega and his team look to new and emerging technologies that could improve upon the manual review process. Earlier this year, the company partnered with digital identity technology provider Jumio

AML and KYC requirements, which allows the company to meet regulations while offering more accurate reviews than previous processes.

“We’re still required to capture the same data and meet the same KYC threshold, and this is really something that allows us to do that,” he said. “It’s [also] made things even easier for our clients.”

Educating customers Improving the user experience is only half the battle for Mennega and his team, however. While onboarding has become almost instantaneous for many customers, some new accounts are flagged for further review. And in some cases, customers concerned about their privacy may be wary of sending a photo of their government-issued ID, and even a picture of their face, to open an account. by integrating the company’s real-time ID verification To alleviate these concerns, Mennega said it’s critical technology into Goldmoney’s platform. to better inform customers about the data that’s being collected and why the company is collecting it. The solution allows Goldmoney to bypass the manual document review processes and offer customers a “It has to be a marrying of education along with the speedy and paperless onboarding experience. Consumers technology,” he said. “We’ve really worked to make sure who want to do business with Goldmoney can send that our relationship managers and our customer-facing a photo of a government-issued ID and a selfie to the staff members are well-versed in not only our technology company when they register for their accounts. stack and our product, but can also speak to [why] we’re asking for [something], or why it’s taking us so long.” These documents are then reviewed automatically, and applicants are usually granted access to a full holding The company also educates consumers about the account within just three minutes, Mennega said. In regulatory requirements it faces, Mennega claimed. That addition to being speedy, the solution is compliant with way, Mennega said, clients learn that he and his team are

collecting this data because they’re legally obligated to do He explained that these and other emerging tools will so — not simply because the company wants to boost its be crucial in the future, as he expects financial services marketing efforts. firms to continue facing pressure to offer faster and more secure services. The future of financial services fraud prevention Mennega said, going forward, distributed ledger Mennega said that consumers increasingly desire technologies and identity protocols hold potential for speedier and simpler financial tools, and that young improving the onboarding process. consumers are even more eager than their older counterparts to do business online — leaving more “One of the more interesting things I’ve been exposed opportunities for fraudsters. As a result, experts expect to recently is this concept of a KYC protocol or an ID digital fraud rates to continue to rise in the coming years, protocol,” he said. “Imagine if — instead of us having particularly as cybercriminals develop more sophisticated to capture all of that data from a passport — we could methods of gaining unauthorized access to personally simply plug right into the State Department in the U.S. to identifying information (PII) or payment data. get that data? If there was some kind of protocol or way that data could be more easily shared, but remain secure Financial services companies will likely be fighting digital and ensure the user remains in control of their data, I fraud for the foreseeable future. But with improved think that could be really interesting.” onboarding and verification, it just might be a fight these firms can win.

Digital debuts to give every person on the planet a legal digital identity by 2030. According to an announcement, WISeKey is WISeKey rolls out blockchain-based identification implementing the platform in “several countries around system the world.” Can distributed identity technologies offer better identity systems? Cybersecurity and Intelligence of Things LexisNexis improves digital identity offerings (IoT) technology provider WISeKey thinks so. The Another company also has its eyes on improved digital company recently debuted a Universal Decentralized identity platforms. LexisNexis Risk Solutions recently Identification (UDI) system, built using the company’s took to the stage at last month’s Sibos conference in CertifyID BlockChain technology, that offers multifactor Sydney, Australia, to debut a new version of its Digital authentication without requiring users to create a Identity Network, a platform that helps companies username or password, or use a third-party authenticator verify customer identities. The platform is offered by or physical hardware token. Instead, it uses biometric ThreatMetrix, which was acquired by LexisNexis earlier tools, including facial recognition, to validate user this year. According to a press release announcing the identities. debut, the improvements include new KYC and AML tools, such as screening names against government sanctions The UDI platform, which was first announced last year, and other similar lists. The improvements also use data will comply with the UN’s Sustainable Development Goals, like location, threat intelligence and physical identity which call for every government and security provider information to confirm customers’ identities.

In the announcement, Daniel Wagner, vice president of scoring and uses Alloy’s decisioning technology and global financial crime compliance at LexisNexis, claimed Socure’s predictive analytics platform. So far, it has been that digital identity factors like these “present the greatest adopted by digital financial institution Radius Bank, which opportunity to more accurately and efficiently identify has since seen fraud decrease by 50 percent and new financial crime risk.” He also noted that digital identity account conversion rates increase. verification solutions will likely become increasingly important as more consumer interactions occur digitally, In an interview with PYMNTS, Johnny Ayers, co-founder rather than face to face. and senior vice president at Socure, said the partnership will improve the digital account opening process, in which new financial accounts are created via online and mobile Partnering providers interfaces. The joint solution uses machine learning Alloy, Socure sync up on new solution (ML) and artificial intelligence (AI) to offer a secure and A pair of security providers are coming together to make simple onboarding process to consumers, which will opening accounts and onboarding more secure. KYC reduce fraud risks and boost accuracy in authentication solution provider Alloy and digital identity technology decisions. firm Socure recently partnered on a new joint solution Daon, Capitec collaborate on identity platform for financial firms. The solution focuses on high-risk In other partnership news, identity platform provider Daon and South African financial institution Capitec Bank recently unveiled a multiyear alliance that will result in the creation of new financial products and services for Capitec’s customers. According to a press release announcing the agreement, Daon’s IdentityX platform will allow Capitec to easily design, develop and release new digital banking offerings.

The bank, which boasts more than 10 million active clients, is currently working on growing its customer base and has seen its revenue increase by nearly 20 percent in recent months. In a statement, Wim de Bruyn, chief information officer at Capitec, said the platform will allow the bank to create new solutions that offer enhanced convenience and functionality to users without sacrificing security.

International endeavors World Identity Network, World Economic Forum link up The WEF also forged a new alliance last month with the World Identity Network. As part of the partnership, the two groups will create a digital identity platform that meets five different requirements. The pair said in a press release that they will create blockchain- based digital identity offerings that are “fit for purpose,” inclusive, useful, secure and provide a range of choice to consumers.

The alliance was announced at the recent Blockchain Symposium, co-hosted by the Kingdom of the Netherlands and the United Nations Office for Project Services (UNOPS) and is the result of WIN’s Blockchain for Humanity challenge. It combines the efforts of technology providers, government officials and other Africa. This lack of official identity makes consumers stakeholders to offer a universal system of identity more susceptible to fraud and also limits economic verification. According to WIN, more than a billion people opportunities and social, political and civil rights, around the world, including many women and children, according to the organizers of Mission Billion. are currently unable to prove their identities, making them Mission Billion is a collaborative effort featuring more vulnerable to human traffickers and smugglers. contributions from a range of players, including the World Bank launches digital ID initiative World Bank and its ID4D group, the Bill and Melinda Other international players are also training their focus Gates Foundation, the Australian government, the on digital identity initiatives — including the World Omidyar Network and the World Economic Forum. The Bank. The group recently launched the latest edition of challenge is open to academics, entrepreneurs, scientists its annual Mission Billion innovation challenge, which and others, as well as organizations involved in the calls on world financial institutions and other financial research, advocacy, design and implementation of digital services firms to establish legal digital identities for all identification systems, including startups, foundations, consumers. According to the World Bank, more than 1 non-governmental organizations and intergovernmental billion people around the world are currently without a organizations. legal identity, including roughly 500 million consumers in

UN points to digital identity for economic connectivity, Songwe said, presents further opportunities development in Africa for digital identity companies. Digital identity developments can do more than just give African consumers access to identity credentials. eIDAS comes to the EU In Europe, consumers and companies alike must now According to the UN, they can also provide economic comply with a new set of digital identity regulations. The opportunity. In a speech to the UN General Assembly, European Union’s electronic identification, authentication Vera Songwe, executive secretary of the Economic and trust services regulation, also known as eIDAS, went Commission for Africa, said that the lack of identity into effect last month, forcing all union member states to verification tools and credentials available to African recognize national eID systems. According Andrus Ansip, consumers has resulted in a demand for identity European commissioner for the digital single market, the verification solutions, creating a market for companies in new regulations will help save consumers time and save the space. businesses more than €11 billion ($12.5 billion) each year. In her speech, Songwe cited other conditions, such So far, Germany and Italy have already completed the as substantial energy connectivity efforts in the past compliance process by creating systems for identity decade, that have helped bring internet connectivity to verification checks. Consumers in these countries can more than 200 million people on the continent, which has, use digital identity credentials to complete transactions in turn, boosted digital identity efforts. This increased in any country throughout the EU. As a result of the U.K.’s exit from the union, it will not be participating in eIDAS regulations.

Government IDs go digital GOV.UK goes private The U.K. may not be dealing with eIDAS, but the country recently made some digital identity-related news of its own. According to a written statement from Oliver Dowden, the minister for implementation, the government is now working with commercial partners to handle and support its GOV.UK Verify system. In the statement, Dowden claimed that the Verify platform will “continue providing a digital identity service to the public sector” via support from its partners, which include Barclays, Digidentity, Experian, Post Office and SecureIdentity.

UAE PASS is part of an effort to bring identity verification capabilities to smartphones and other mobile devices. Consumers can use the solution to sign and validate documents in the real world, and it provides users with a unified set of identity credentials for various federal and local government services. UAE PASS simplifies the digital identity registration and authentication process for the region.

Singapore to add biometric authentication to digital identities Further east, in Singapore, biometrics are being paired with consumers’ digital identities. In a recent speech at the GovTech STACK Summit, Kwok Quek Sin, senior director of Singapore’s National Digital Identity (NDI) system, said that the agency will expand the use of biometric identification in identity verification, beginning with facial recognition. According to reports, this Verify was first launched as a pilot in 2014 and went fully expansion will come in the form of a centralized biometric public in 2016 after several delays. The platform enables system that allows users to avoid repeatedly registering registered users to validate their identities to access biometric data and other personal information each time government or commercial services and boasted 2.9 they interact with a new company or use a new service. million users when the privatization decision was made. While adoption of the Verify platform has risen in recent The government is reportedly offering software months, it still lags behind expectations, and will likely fall development kits (SDKs) and software plugins to far short of the 25 million users that developers expected companies in the banking and financial space that will to have registered by 2020. allow them to connect directly to the NDI system to authenticate consumers with biometric data. According Dubai rolls out new digital identity to Sin, GovTech hopes to complete its biometric identity In Dubai, digital identity technology provider Smart Dubai offerings by 2020, building “a universally trusted data recently rolled out a new national identification system ecosystem” that can identify citizens using technologies for consumers in the UAE. The system, UAE PASS, was like smart cards or wearables. created in conjunction with the UAE’s TRA and grants residents access to local and federal government services myGovID digital ID pilot debuts Down Under and information, as well as access to other products and While Singapore is improving its digital identity system, services from private and public partners. other countries in the Asia-Pacific are just getting theirs

off the ground. Late last month, the Australian federal government began the pilot of its myGovID system, following months of delays surrounding the rollout. The pilot test allows a small group of Australian consumers to apply for a digital identity credential online, rather than by visiting a post office or Centrelink storefront to upload documents, a process that typically takes 40 days.

First announced in 2015, myGovID allows companies to perform an ID check that reviews more than 100 factors, and allows consumers to access government services, such as online tax filing. The service is currently only available via the App Store, though there are plans to roll out Android and web-based applications next year. After downloading the app, consumers take photos of themselves and enter their personal information — like their dates of birth, email addresses, driver’s licenses, passport and Medicare numbers — and are then given a password to access the service.

Non-Profit Use Cases For Digital Identity

Around the world, companies are using digital identity tools and technologies to boost their operations and revenue. But according to research, fraudsters aren’t just targeting for-profit companies — they’re also going after nonprofit organizations and charitable groups. As a result, nonprofit and charitable endeavors are increasingly turning to digital identity credentials and verification tools. more than 1 billion people, nearly 15 percent of the These tools hold massive potential in these spaces, and world’s population, lack a valid form of identification. The could help more than a billion consumers in developing problem is particularly prevalent in Africa, where more regions verify and authenticate their identities. They than 500 million consumers across the continent lack a could also help charities and nonprofit groups boost legal form of identification, according to the World Bank. their fundraising efforts and better protect donors’ and benefactors’ personal information. The lack of basic identification can contribute to financial problems and widen the wealth gap. People without a To that end, nonprofit players are investing in a range of valid form of identification are at a much greater risk of solutions. In this edition of the Digital Identity Tracker™ becoming victims of fraud, and the lack of identification Deep Dive, PYMNTS explores the latest digital identity can limit their social, political and civil rights. What’s developments in the nonprofit and charity sectors. more, roughly 2 billion people worldwide lack a bank Giving digital identities to 1 billion people account or other formal financial services holding, often Digital identity tools and technologies may hold the because they lack a valid form of identification. most promise for people in developing nations, many of Digital identity credentials could help these consumers whom have no verifiable forms of identification. Globally, address those issues. Self-sovereign identity systems,

for example, use asymmetric cryptography, distributed by analyzing behavioral data collected from consumers’ ledger technology and other tools to create verifiable smartphones. The solution lets consumers retain digital identities that can be stored on a digital wallet. ownership and control of their data while giving them a Consumers can use that wallet to verify their identities new tool to grow their small businesses, get approved for in many situations — whether they want to open lines of car loans or mortgages, or simply open savings accounts. credit or a bank accounts, or enter age-restricted venues and order alcoholic drinks. These systems are not usually Using digital identity to raise funds affiliated with governmental, national or mainstream Fundraising organizations are also increasingly turning financial systems, which makes them well-suited for to digital identity credentials and verification tools to consumers in regions that experience frequent political improve their money-raising efforts and better protect upheaval and turmoil. themselves.

Offerings like Tala can also give consumers verifiable In addition to helping fundraising groups learn more digital identities. The company, founded by former about donors and benefactors, access to digital identity American investment banker Shivani Siroya, helps data can allow them to target groups or people who might microentrepreneurs establish identities and build trust be particularly receptive to their messages. Nonprofit

organizations are also using this data to learn more about trustees by ensuring that they comply with regulations and, for example, are not using fraudulent identities and have not been convicted of fraud-related offenses.

Digital identity tools can also help nonprofit groups attract more donors. Many organizations are now using technology to seek tax relief on charitable contributions. By using distributed ledger-based tools, such as those offered by Everledger and Provenance.org, nonprofits can allow donors to make one declaration that applies to repeated charitable contributions, rather than forcing donors to declare each individual donation. Some experts believe these tools could save donors time, money and hassle, thereby encouraging more contributions.

Digital identity’s nonprofit future For-profit and nonprofit groups alike are paying more attention to digital identity tools and technologies, from identity credentials to verification tools. While the extent to which these solutions will factor into the charitable sector in the future is uncertain, the market seems ripe for innovation and new tools. A large percentage of consumers do not have verifiable identities, and charitable organizations are often bogged down with regulations and compliance requirements. Many of these issues could be solved through digital identity tools like self-sovereign identities, distributed ledger technologies and other offerings.

With many benefits to offer, digital identity solutions could soon become a major piece of any nonprofit organization’s toolbox.

Scoring overview Companies featured in the Tracker Scorecard have been evaluated based on four primary criteria:

Consumer data Online, physical identity, social identity and knowledge-based question data

Device intelligence Device fingerprint, IP geolocation, true app and device emulator features Scoring

overview Transaction behavior Click flow, payment history and payment transaction features

Multifactor authentication PIN, biometric and security token features

If you would like your company to be considered for inclusion in the Tracker’s Scorecard, or wish to have an existing listing reconsidered for an update, please head over to our profile submission/update page.

Consumer Data Scorecard – All players are listed in alphabetical order.

01Systems is a software application and solution provider. Its industry products include a portfolio offering arabization, signature management, a biometric solutions integrator (finger vein, fingerprint), ECM and digital vouchers.

Products: Signature management, enterprise content management, biometric authentication Customer focus: Financial services