Long
ago, a cartoon ran in The New Yorker, showing a canine seated at a desktop
computer. “On the internet,” ran the caption, “nobody knows you’re a dog.”
The
same premise holds true today and poses a knotty question in online commerce
and FinTech: How do you know the person on the other end of a transaction is
really who they say they are? And even if you do confirm their identity, how do
you know that person can be trusted?
One
firm, IdentityMind Global, provides real-time risk
management and fraud prevention through “digital identities,”
collecting data across dozens of parameters, separating the financial ecosystem
into good actors — those deserving of trust (and completed transactions) — and,
well, bad actors.
In
an interview with PYMNTS’ Karen Webster, Garrett Gafke, president, CEO and
founder of IdentityMind Global, said that the construction of digital
identities, by necessity, goes well beyond data that might be thought of as
standard, such as a street address, a credit card number or a two-factor
security question test.
True
merchant risk goes hand-in-hand with global digital commerce and, as Gafke
described it, comes in the form of people with little or no history — no
history of driver’s licenses, credit cards issued, traditional bank accounts or
other standard bits of information. They may not even be scored by the
traditional credit bureaus. Yet, these individuals are looking to do business
and conduct transactions. Their would-be partners on the other end of the
transaction must decide whether to enter into a relationship (however fleeting)
with that consumer … or not.
Gafke
noted that “transactions of any kind leave a kind of financial, online exhaust”
and that each transaction has attributes that, taken together over time,
ultimately, can be assembled into a digital identity. “This is real, current
information,” said Gafke, “rather than just public, physical information. Good
reputations are built slowly, while bad reputations come very quickly.”
That
digital identity is established, as Gafke said, in IdentityMind Global’s
platform, which links and finds correlations between disparate bits of
information and transaction trails that “process, capture, rate and build
overall profiles on online identities.” Emails, digital wallets and payments
are all linked together, said the executive, to build a “trusted” digital
identity.
“Trust”
would be the operative word in the relationship between individuals and the
firms with which they seek to do business. Trust would also extend to, and be
colored by, the people associated with that individual or business. Consider
how, in the age of social media, amidst concerns about money laundering, an
individual might be viewed with demonstrable trails of following, say,
terrorist-linked groups on Twitter.
In
a recent whitepaper by the firm, IdentityMind Global also noted that additional
data points may come from internet-enabled devices, which can, for instance, help
bring location into consideration when determining good actors from bad and in
screening across sanctioned individuals or nations.
Using
these techniques, said IdentityMind Global in its whitepaper, can help reduce
manual review time. There is also a financially positive impact, via a 60
percent reduction in transactional fraud from chargebacks and a 90 percent
reduction in fraud that comes at the point of account origination.
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