The Paypers sat with Charles Gaddy from Global Data Consortium to talk about the role that identity verification and data play in cross-border digital identity & onboarding
Data, identity verification, trust; why are these concepts important for the 21st (twenty-first) century?
Ultimately, the world has gotten ‘smaller’; information/data/purchases/accounts/activity these things all ‘zoom’ around the world at fibre optic speeds. However, just because commerce has gotten faster does not mean that the core concepts around trust and human interaction have changed. Trust is at the core of commerce - without some degree of trust business cannot transact. Think back to the times of ‘8-track tapes’ and ‘rotary phones’, did we sell nothing in those days? Of course we did, business was transacted face to face, then over the phone, papers were signed – ultimately each technological innovation, data exchange, and validation format furthered trust and mitigated risk.
Nevertheless, from ‘face-to-face’ to eventually completely remote with the help of technology like mobile onboarding we have enabled speed in trust. By using authoritative data, identity verification APIs, and systems like Global Data Consortium (GDC) the 21st century has become simpler, faster, easier, and immediate, from an identity verification/building trust perspective.
Global Data Consortium gathers data/info and serves users from all over the world. What do you find challenging when providing a single access point to local, high-quality reference data?
In the digital identity space, the challenge around high-quality reference data is all about Pass Rates and Match Rates required for our customer’s compliance and identity verification use cases. The goal of our data team related to this challenge is to sourcing data from the highest quality local sources, across as many source types (credit, government, utility, consumer etc.) as possible and with the best data quality (address hygiene, parsing, name standardisation etc.) to generate the best Pass & Match Rates for our customers. The core factors which impact Pass & Match rate are input data quality, compliance or match rules required, and data sources available.
The best results come from having optimally implemented a customer’s match rules, worked with a customer to produce the best quality input (address standardised, names parsed, national IDs, and DOBs checked for format and validated), and utilising best data sources for the country. For GDC we vet sources and define ‘best’ by profiling at the data itself, vetting the organisation providing the data as to their legitimate and permitted use for the data, and assessing the source quality and completeness.
Profiling & Matching is straightforward but very challenging. What is the fill-rate and format of the given elements in the data source? We especially see this as a challenge with name data and our technology is uniquely equipped for the challenge. Take my name: ‘Charles Gaddy’ is the data source parsing for us using local expertise? Are we forced to use our tech to determine which is the give name – Charles and which is the surname – Gaddy? What if my customer has Charlie Gaddy – is that a quality match? Will it meet my customer’s regulatory requirements? What if your name is 刘思苗?
As a side note: 刘思苗 can be the name Simiao Liu and our INTE (Intelligent Name Translation Engine) can very uniquely move between Chinese and Latin for name data and identity verification using Chinese government sources. Very cool stuff.
Vetting is critical in every market and at the core of becoming a GDC ‘Consortium Member’ - we apply rules in our vetting process to every Data Provider which are universal. Along with applying a standard/universal vetting process we also do something revolutionary in our space – we get on an airplane and visit Paris, Tokyo, Singapore, Sao Paulo – our Passport books are stamped full. This is how you get to know the data that is available, terms around use, and gain the local understanding necessary to be accurate and effective in providing an identity solution like GDC’s Worldview platform.
Our Consortium Members/Data Providers must be established and local to their home market or region. Further, as we are a Consortium and our API functions like a ‘network’, our partners must have an installed customer base in the market, documented service levels, quality levels, and clear ‘chains of custody’ related to the data provided for identity verification in network.
We also find the added value of having these same local Data Providers being able to bring unique local knowledge to the data. For example, my Portuguese is terrible, but our local Brazilian and Portuguese Data Providers can provide intelligent, localised solutions which are better at matching, standardising etc. in their local language/alphabet than we could do on our own. Source quality is often defined by the country and type of data - the electoral roll for example in the UK. The electoral roll is a high-quality government source. That said, not every country allows for this data to be shared or has the same rules around how the rolls are updated. Our goals around source quality are an equation which is balanced with depth and breadth. We are constantly adding sources which fit 1 of our standard 8 types:
However, we are also constantly looking for additional sources to add depth within a type. In the UK we strive to have every Credit Bureau available, not just one. It is also very much worth coming back to what is available as source types around the world. To contrast a country like the UK and the many different data sources that might be available (credit, government, commercial – literally we have all types available in the UK), let’s consider France, right across the channel. There are no government or credit sources easily available in France. The electoral roll is not available to license, credit bureau data is locked down - so source data here is a challenge in comparison.
As a side note: this is a challenge that GDC accepted a few years ago and now we have the best solution on the market today for identity verification in France. It was not easy but following our principles around Profiling, Vetting, and Sourcing we got there.
The world might be becoming more connected, but regulations and authentication methods can create issues for international businesses looking to expand globally. How can companies leverage identity verification/digital onboarding as a competitive advantage?
Identity verification/digital onboarding can become a competitive advantage if friction is reduced. Efficiently complying with Know Your Customer (KYC) regulations around Customer Due Diligence (CDD) while limiting friction in the onboarding or customer experience is probably the most compelling attribute of leveraging digital identity verification to advantage. If 70-80% of the time, GDC can use the data already captured during the registration, onboarding, or account opening processes to verify that ‘you are who you say you are’ then friction can be greatly reduced. No picture to take, no identity document to scan, simply using the data already available to verify.
You mention reducing friction when complying and managing regulatory requirements as a competitive advantage, what specific regulations does identity verification for GDC help navigate?
GDC and digital identity verification in general, operate in an interesting position as it relates to regulations. Data really is the fuel (don’t like oil metaphor per se) which powers effective digital identity verification. The data which is used for digital identity checks must be managed and processed in a GDPR compliant manner, YET this same data is critical when complying with AML guidelines like the 4MLD. GDC excels at operating between these two ‘rocks’ of GDPR and AML directives to provide solutions to customers.
Crystal ball time; with 2020 just around the corner, could you please share your thoughts on what next year holds for identity-as-a-service digital identity providers like GDC?
As data protection and data privacy regulations continue to evolve in parallel with the regulatory and compliance guidelines which are designed to prevent fraud and financial crimes - we see the market in 2020 as growing and expanding substantially. GDC is positioning for this through the staged rollout of solutions to support the upcoming 5th Money Laundering Directive (5MLD) by positioning Know Your Business (KYB) and Beneficial Ownership offerings as well as deploying solutions for the PSD2 regulatory requirements for Secure Customer Authentication (SCA).
Author Charles Gaddy
Charles has specific experience in banking, insurance, and direct marketing technologies as well as substantial experience in the data quality sector. His past positions include work in Fintech/Insurtech and global data over 25 years as VP of Product Management, Alliance Manager, and Director of Information Technology.
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