The proliferation of mobile devices has led to a new consumer paradigm -- many consumers think and act in a “mobile-first” way. We check our cellphones before breakfast. They act as a portal to our relationships through social media apps. They organize our day, entertain us, and help us improve our health and manage our money. There are dozens of new use-cases every day. In financial services, our devices are moving from simple information services (example: checking your balance) to transaction providers (example: mobile deposit) or more complex solutions, such as mobile wallets, mobile payments, or mobile photo account opening. All of these are available today, with adoption growing.
A key building block to this trend is a high-quality method of determining identity. We must know who is requesting financial services to satisfy classic Know Your Customer (KYC) measures and thwart potential fraud. Traditionally, we have cobbled together a variety of factors to verify identity, including identity documents, background checks, out-of-wallet questions (such as, What street did you grow up on?), and other documentation. Online, we have added CAPTCHA, IP restrictions, authentication, and other techniques.
[For more on how mobile is changing the security landscape, check out: Are Mobile Payment Apps a Boon for Both Customers & Fraudsters?]
Mobile changes all of that. New data and techniques are available that, independently and in conjunction with classic techniques, represent the new era of identity management. As always, adding measures that manage risk can compete with the constant pressure to reduce friction. The good news: Mobile can help with that too.
So, with that as background, here are the first two of four trends I believe will set the direction of mobile identity and make a significant impact by 2017:
All smartphones have cameras, and we are used to using them. This has created the opportunity to leverage facial recognition as part of identity validation. Assuming the user experience is designed to be simple and compelling, consumers would take an identity “selfie” to validate. This, coupled with a photo/scan of the driver’s license creates a high confidence of identity and that the person was present at the time of the account enrollment. Done right, this creates the magic combination -- managing risk while simplifying the process.
This week, Amazon announced the Fire phone, with five cameras (four of which face the user). While the adoption of this device is yet to be seen, it is an indicator of a broader trend -- that computer-vision-enabled mobile phone cameras are becoming mainstream. By 2017, today’s commonly-accepted selfie will come of age and become more automated. Facial verification will be a mainstream method of identity validation.
We carry our smartphones everywhere. We protect them with fancy cases, since we intend to keep them for long periods of time. We have long-term relationships with carriers. Therefore, verifying our devices should be a useful measure of identity, and the stability of our phones should add confidence that our transactions are not fraud. Our industry should make use of device reputation and device location as information that can be correlated to risk. As with most risk factors, we should not rely on them exclusively, but as part of a larger risk-management framework.
Whether the impact will be great or small, there is no doubt that facial recognition and device location have the potential to change identity management drastically. What do you think? Are these technologies really game changers, or will their impact be relatively unnoticed? Leave your thoughts in the comments below, and stay tuned for next part two of this article, where I will examine behavioral awareness and the convenience of imaging.
Mike is an experienced mobile technology leader. Prior to joining Mitek, Mike was CTO of Green Dot, where he led the strategy architecture and implementation of their reusable mobile platform to serve the underbanked. Mike also served as a director at Neudesic, where he led ... View Full Bio