Checking in with Mike Tuchen, CEO of Onfido
“We believe we’re moving towards a passwordless future, where biometrics will be at the heart of every authentication.”
As more companies transition their operations and workforces online, digital identities are playing an increasingly central role in enabling today’s evolving and data-driven world. At a time when cyber-attacks are growing in frequency and complexity, companies not only need to invest in strategies and solutions that create a seamless experience for customers, but also keep their customers’ most personal information secure.
Leveraging leading AI and a team of identity experts, Onfido is providing organizations with the tools to see and verify real identity remotely. We caught up with CEO Mike Tuchen to unpack the identity landscape and the significant opportunities ahead for this technology. His take? Gone are the days of accessing our accounts through social security numbers and the names of our childhood pets.
Identify verification has gone far beyond physical documentation and passwords. How has the identity landscape changed in the last ten years and how is Onfido part of that shift?
The identity landscape has seen a dramatic change over the last ten years, as more companies have moved to a digital-first approach to serving their customers. The pandemic accelerated this shift, compelling organizations to accelerate their digital transformation plans and connect with their customers in ways that are more convenient and cost-efficient.
Take the banking sector, for example. Opening a bank account ten years ago was anything but simple. It required a bank branch visit, several forms of identification, and credit bureaus checks. Many traditional banks still operate in this way, losing up to 40% of potential customers in the process, according to Onfido customer data. In contrast, fast-growing challenger banks that use remote identity solutions experience less than half of that drop-off rate during onboarding.
At the same time, passwords have been the standard for accessing accounts or authenticating users since computers were invented. On average, consumers manage over 191 pairs of usernames and passwords, so it’s not surprising that 51% of people reuse the same password across multiple accounts. We believe we’re moving towards a passwordless future, where biometrics will be at the heart of every authentication, even for stronger, multi-factor authentication methods such as push notifications, hardware tokens, one-time text messages, or knowledge-based authentication.
Onfido is powering this shift to digital by enabling businesses across many sectors to remotely verify the real identities of their customers, quickly, securely, and in full compliance with privacy laws. The mechanics are as follows:
- Users upload a photo ID and selfie from their computer or smartphone.
- We then combine world-leading AI technology and human experts in a hybrid approach to assess if the ID is genuine or fraudulent, and that the photo matches the selfie.
- This drives a recommendation to the business on whether the user is a fraudster or a genuine customer.
- The whole process typically takes seconds, and the user can apply whenever it suits them.
We complement our AI-powered onboarding with face authentication, allowing businesses to offer a simple, more robust way for customers to safely reset passwords, change personal account information, or authorize large transactions.
What do you see as the common use-cases for identity verification today?
Approximately 70% of our customers come from the financial services industry – banking, mortgages, remittance, personal finance, and crypto exchanges. However, as the trend towards digital continues, we see the potential for remote identity verification in other sectors too. Healthcare is one example, as doctors and patients grow accustom to telemedicine and online prescriptions. The online gambling space is another. Take sports betting – a space growing at 36% year-over-year. These companies need to be able to verify new customers quickly and at scale to prove the legal age of their users while also preventing money laundering.
As travel picks up again, we’re seeing more travel and hospitality companies wanting to offer convenient digital services, with walk-up-and-rent cars and scooters as well as digital-first insurance policies. Government entities are also exploring ways to manage processes and interact with their constituents digitally. Ultimately, there is no limit to the use cases, as it’s a common goal among businesses to want to assure that their users are genuine as they ramp up digital customer relationships.
What do most people get wrong about identity security management? How is Onfido uniquely positioned to fix those shortfalls?
Most people believe identity verification is separate from identity management. In reality, both are crucial to the entire customer lifecycle and experience. It’s no good having robust identity verification at onboarding if companies default to less robust multi-factor authentication methods for account access farther down the customer journey. This will expose the business to security weaknesses that criminals can and will exploit. At Onfido, we solve for the entire customer lifestyle. The same biometric that a customer uses for onboarding can be used for re-accessing their account and optionally verifying the customer against their original registration document, eliminating the need for two-factor authentication and passwords.
Companies need to think holistically about what the end-to-end identity lifecycle looks like, not just one-off events. Taking this approach ensures businesses can provide a better user experience for customers and allows them to make more accurate decisions when offering new products or services. In some sectors, it can also facilitate compliance with regulatory obligations, such as anti-money laundering and customer due diligence. To ensure Onfido continues to lead the way in this area, we are an active board member of the FIDO Alliance, a non-profit organization focused on authentication standards.
Analysts predict the digital identity verification market will be worth $16.7B by 2026. What do you see as the biggest opportunities for identity technology?
We believe that strong digital identity management will play an increasingly important role in enabling companies to make smarter decisions about, and for the benefit of, their customers. According to a recent survey we conducted in partnership with Okta, companies have just ten minutes to build trust with consumers during onboarding and only 3 minutes for later high-risk transactions that require authentication. It’s critical that banks and large enterprises know the real identity of their customers at multiple touchpoints along the customer journey, and that they make the user experience as frictionless as possible.
Onfido is well-positioned to deliver on this opportunity by enabling companies to derive more value from their customer data through tighter integration with consumer identity. In the future, our customers will be able to integrate multiple identity signals to make smarter, real-time decisions using artificial intelligence. Combine this with access to a pool of identity fraud data gleaned from hundreds of our customers, and companies will be able to build consumer trust in seconds, stamp out fraud, onboard more customers at scale, and drive-up value.
In terms of identity management, what should enterprises and consumers be prepared for in the next five years?
Over the next five years, consumers and enterprises will see dramatic shifts in the way digital identity is managed. End user friction will reduce dramatically as companies move away from passwords and older knowledge-based authentication and multi-factor authentication methods, and towards consumer-friendly biometrics.
We also see potential for corporations to start using and managing multiple identity signals, for example, device fingerprints, behavioral biometrics (e.g., the way you swipe on your screen), or networking information from your phone to detect location, all of which help companies to understand and identify their customers in better and faster ways. This will dramatically improve the customer experience, reduce costs, and provide more opportunity for consumers to access products and online services.
TPG Growth invested in Onfido in April 2020 at the height of the pandemic. Read more from Tech Crunch.
“Onfido’s use of AI to develop market leading tech is extraordinary. There is enormous demand for secure and simple identity verification and authentication across major sectors and we see Onfido becoming the new standard for digital access. Their team has done a remarkable job in a relatively short period of time, and we look forward to partnering with them to continue their momentum into new use cases and geographies” – Mike Zappert, Partner, TPG Growth.