Digital Customer Identities

Customer identities have become one of the most precious values in the digital world. For many companies, this can be a blessing and a curse!

On the one hand, identity data is the prerequisite for gaining customer control points, opening new revenue streams and service channels, and improving customer experience. On the other hand, the loss of trustworthiness and security due to stolen identities by “unauthorized third parties” can threaten a company's reputation and existence. The news is filled with stories about data breaches. In 2016 for example, hackers stole data from 57 million Uber customers. The breach wasn't made public until November 2017 (source: CNN Tech, December 20, 2017). Every three seconds, there is a new victim of identity theft (source: US Federal Trade Commission).

With a growing number of digital devices, logins and transactions, the rise of the Internet of Things (IoT), and Bring Your Own Device (BYOD), there is an increasing need, on the one hand, for strong authentication and security solutions to prevent data breaches and identity thefts. On the other hand, there is an increasing demand from users for a seamless, quick, and convenient identification process that can keep up with the speed of their digital life. Evidently, 46% of interviewed users tend to share their passwords (source: Biocatch, 2017).

Thanks in part to Apple’s TouchID and FaceID in the iPhone X, some static biometric technologies have reached the masses. 

Apple has released a new commercial for the iPhone X that focuses on its Face ID feature. The clip demonstrates in a fun way that biometrics are an easy-to-use alternative to the annoying memorization of passwords.

https://www.youtube.com/watch?v=vcsGu9ug9J4&feature=youtu.be

A recent study by IBM Security, The Future of Identity, published in 2018, shows that the comfort level with biometric authentication methods is growing. Today, already 75% of millennials, as well as 58% of users over age 55, feel comfortable using biometrics.

Furthermore, the study illustrates which authentication methods are perceived as most secure from a user point of view (global perspective, source: IBM, The Future of Identity, 2018 ): 

Biometrics Pros

• highly accurate
• has a greater potential for user convenience
• is non-transferable and highly secure (unlike passwords)
• requires little time (average identity identification time: five seconds)
• is difficult to counterfeit thanks to constantly improving live detection technologies 
• remains stable and enduring (biometrics change minimally over a lifetime)
• provides strong authentication and accountability (cannot later be renounced or reprobated)
• can expand upon the advantage of two-factor authentication, e.g., when using dynamic biometric measures
• reduces fraud costs

Biometrics Cons

• is perceived as an invasion of privacy and are not accepted by all users
• is slow and require users to pause to gain access (e.g., when based on fingerprints or iris scans)
• runs the risk of false rejections and false acceptances 
• requires high costs for systems, storage, and maintenance 
• is complex in their integration into security programs 
• is increasingly being reported in the media as subject to theft

Several startups offering such an approach have emerged. One example is the US-player Precognitive: its solution performs a context-aware, real-time assessment of device and connection, couples device intelligence with user-specific behavioral data and biometrics, employs Artificial Intelligence (AI) to analyze device- and user-entered information to analyze it in real-time. Precognitive currently focuses on use cases in banking & financial technology, travel & entertainment, and e-commerce. 

The solution of FST Biometrics, also from the USA, combines visual identification technologies, including facial recognition and behavior analytics, to identify users at a distance and on the move. Its solution supports physical access to financial and educational institutions, corporate and residential buildings, healthcare facilities, clubs, as well as sports and entertainment venues.

Biocatch, a biometrics startup from Israel (total funding of US$ 41.6 million) employs continuous biometric authentication to protect users and enterprises from identity theft.

According to our own analysis of solution offerings from 60 technology providers offering biometrics-based user identification, we will initially see most use cases/implementations in financial services, enterprise/workforce management (access to buildings, company systems, software), health care (e.g., patient identification and tracking, remote patient access), public services (e.g, personal identification for government applications), and e-commerce/retail.