Russell S. King is the founder of Paycasso, a FinTech company that specializes in combating identity fraud through the use of innovative facial recognition and computer learning technology.
Paycasso is currently expanding into Africa and has already signed on a number of African financial institutions to utilize its facial recognition technology and other products.
2018 will mark a year of unbridled transparency. Our personal information, including detailed financial and health related records, is more likely than not to fall prey to a system breach ultimately available for a price to those with nefarious intent.
As the use of e-identity mechanisms broadens, our landing visas, financial statements, and/or our healthcare records have become examples of our digital fingerprints, in need of consistent safeguard.
I recently caught up with Russell S. King in Johannesburg to find out what it takes to defend against reputational risk and safeguard identity itself in this ‘brave new world’. He spoke to me about how identification can be a force for good, used to facilitate financial inclusion and foster opportunity for emerging market economies and their citizens.
Tell me about the impetus to safeguard consumer identity and also, e-Authenticity as the future of confident finance.
Prior experiences as CEO of a US Healthcare company and a rather unique position within the ICANN community led to my founding Paycasso in 2012. Both roles had afforded me two terribly different commercial vantage points which shed light on substantial disconnects in the B2B relationship.
The consequences of these disconnects were felt across the consumer demographic, and hold a direct side effect to technical innovation within financial services, healthcare and other regulated consumer industries.
Frankly, there were several ‘unanswereds’ – B2C service organisations suffered significant information gaps – who exactly they were working for (or with), who they may or may not have sensitive data on-file for, who specifically is requesting a loan, for instance, and how in particular one can determine likely repayment performance.
e-Authenticity, as you put it, demands holistic, accountable solutions. e-Authenticity is paramount to doing business safely and securely in the modern era.
A positive influence should be a guiding principal to those afforded a position of influence in shaping an industry. Whilst I appreciate such a statement invites accusations of self-aggrandizing, the core operating principals that define Paycasso’s proposition and are inherent to our solutions have afforded the company broad recognition through private sector deployment and to the best of our knowledge, unique market approval from within the public sector. We acknowledge the privilege of a leading role in the ‘e-Authenticity’ and ‘e-Identity’ industry and apply this principal in our delivery of solutions that effectively streamline the on-boarding and customer verification process. These solutions are simple to use, applying a consistent verification standard across clients’ digital and in-person consumer engagement channels, mitigating money laundering and impersonation fraud risks whilst supporting a primary operational requirement, compliance with regulatory obligations. Our technology platform employs image recognition, machine learning and facial recognition capabilities. Such capabilities enable a broad range of transactional use cases (including e-visas and mobile wallets), maintaining sufficient flexibility to adapt to an ever-growing array of required commercial risk management policies and procedures.
Our suite of services enables our clients to effectively manage consumer identity verification requirements, whether such transactional requirements take place over mobile devices, online, or indeed in-person, delivering a positive user experience that isn’t impeded by extensive instruction that results in user friction and frustration. In short, marrying transactional and identity verification solutions drives widespread and positive impacts for our clients, enables truly collaborative engagement and deployment models, delivering choice and confidence for both the client entity and the consumer; transparent risk management enables service providers to deliver the broadest range of accessible services.
Paycasso’s patented product portfolio consists of four solutions, each operating model fulfilling clearly defined objectives in addressing organizational, consumer and investor risks represented by money laundering and impersonation fraud throughout the customer lifecycle.
We know facial recognition technology has become much more advanced in recent years; can you give us a brief indication of how this works and what makes Paycasso different than other competitors?
Facial recognition technology utilizes algorithms that assess and measure facial features. Paycasso solutions generate a feature rich and factual set of data points that collectively define a level of risk associated with the identity represented in a given transaction. The facial recognition component contributes to this risk assessment but this is far from its determining factor. Facial recognition or indeed any biometric modality, in our opinion, cannot in isolation purport to deliver identity verification.
To further elaborate on this position, Paycasso’s VeriSure solution meets the core requirements that support identify verification through a combination of the user’s attributes and the various risk levels represented by those attributes. Capturing, verifying and authenticating a Government Issued Photo ID is a reliable control in helping mitigate impersonation fraud risk, however, ensuring that the ID belongs to the individual is also a crucial control. This process historically required human judgment that is prone to inconsistency and error, with variable degrees of scrutiny and due diligence. VeriSure combines these processes into a single, automated and ultimately consistent operating model.
It is a combination of the efficiency and transparency in applied processes, coupled with detailed and factual transaction reporting that enables comprehensive, client-defined decision-making. These are the ultimate values that our clientele find compelling in our distinction.
DocuSure™, InstaSure™ and IdentiSure™ make up the balance of the product portfolio. InstaSure™ and IdentiSure™ leverage our core biometric competency to deliver respectively: a) identity authentication that confirms the ‘live’ user biometrically matches the facial record that was captured and verified when the account was originated; and b) assesses whether a user already exists within account records which would further identify duplicate and potentially fraudulent account records using the face as the identifier.
Though distinct in approach and application, each of these products seamlessly integrates across our clients’ digital and in-person channels. Identity verification is an important financial crime control, acting as a barrier to entry for any financial institution however, it is only one part of a financial crime control model – the information obtained through the Paycasso product suite is effectively leveraged to manage enterprise-wide financial crime risks (for example, transaction monitoring).
Much like the security systems you experience at border control points and e-gates, speed is essential to the consumer experience during financial transactions, whether they are applied in account opening, real-time purchases or monetary transfers.
The stakes are high. In the U.S., for example – According to a Federal Reserve Payments Study, Americans used credit cards to pay for USD$26.2 billion purchases in 2012 alone. The estimated loss due to unauthorized transactions that very year was USD $6.1 billion.
And so in the era of digital commerce, e-identity software provides the opportunity for retailers in the United States, the United Kingdom, across Europe, Africa and around the world, to grow their consumer bases by offering ease of process. To our clients operating in a multitude of markets and service offerings, our solutions ensure transparency and comprehensive controls, in all matters of e-Identification.
From a competitive intelligence standpoint, we offer choice in the deployed operating model, hands-on expertise and committed support for our clients’ evolving business models; real collaboration for innovations in enhanced security. We are helping our clients improve brand distinction through identity, increase sales, safeguard proprietary and customer information whilst importantly, grow their businesses, many on a multi-national basis.
What is the application for digital identity beyond everyday transactions?
The industry is effectively demonstrating how biometric technology can be leveraged to elevate secure access to banking information, medical records, purchase history, travel documents and more, reducing reliance on usernames and passwords.
For example, losing your passport in a foreign country is a serious problem – It can leave you stranded for days at a time (at the least), ruin predetermined business arrangements and even force incurred fines from your home country on your return. The future of digital identity in alleviating many of the challenges we have historically been obliged to accept is truly bright.
Further, ‘trust’, in all aspects of digital commerce, is a fundamental requirement. Transparency is another core Paycasso operating principal. Its primary consideration in our applied technology, process and procedures strive to perpetuate the trust model and its universal application.
Indeed today, our client solutions demonstrate broad applicability in meeting bespoke commercial requirements well beyond financial service providers and include healthcare services, retail banking, insurance and restricted goods or services – each being an industry that requires a clear and definable trust model, be it B2B or B2C. Trust is ultimately critical in the handling and use of sensitive information.
At present, we are seeing technology create several different digital signatures – Smartphone GPS locations, bank and credit purchases, e-mail history, accommodation confirmations – However, the information attained is still spread out and disjointed in functionality. It is once we combine these various sources that we will be able to cohesively create a fully functional digital identity with branded controls, allowing an individual to access the entirety of their records within mere seconds, and take these records with them safely wherever they may go.
Right now, we see the integrated application of facial recognition capabilities in border security, crowd control, travel and banking transactions, but there is no real limit as to how this software can continue to be applied in support of improved information security and efficiency within our daily lives.
Lastly, there is an inherent Corporate Social Responsibility (CSR) in the contribution we can make in expanding inclusion and access to the digital economy and services that ultimately empower individuals i.e. ‘banking the unbanked’ in developing markets in Africa, Eurasia and Latin America (as but examples) through e-identification.
Verifying loan applicants or supporting the e-identification process for an individual perhaps previously disconnected from modern financial services, from the emerging markets or otherwise, is an application in which we take great pride in fostering.
From the mass distribution of smartphones worldwide, it is truly an honor for Paycasso to play even a small role in connecting men, women and families to the global marketplace and for many, for their first time.
Bitcoin prices recently breached USD $11,300 for the first time in history, representing a rise of over $3,100 in one week alone. This marks a stunning boon for cryptocurrencies, despite influential public sector voices echoing concerns about limited regulatory clarity. How do you envision the rise of Bitcoin and cryptocurrency transactions in general being managed – Would the merits behind facial recognition software be applicable here? Do you agree with the notion of several major governments, including the U.S., in their willingness to regulate the cryptocurrency space rather than outright ban it?
It is clear that as a global society we are moving away from reliance on brick and mortar institutions and that individuals are becoming more interested – invested – and connected – in and by digital only financial services and cryptocurrencies.
Cryptocurrencies are increasing in scale at a dramatic rate. It has been predicted that Bitcoin could reach USD $40,000 by the end of 2018, and Ethereum, $1,500. These are predictions could well prove to be underestimated. At present, total market capitalization of digital coins is approximately $304 billion, projected to increase up to 6 times that amount by the end of 2018. And so it’s easy to see that globalization and digital currencies are intangibles working hand in hand in bringing mass investment into cryptocurrency markets. Such a market necessitates secure mechanisms to protect people and their transactions.
Modern-day commerce, financial technology and perhaps even sustainable development are hinged upon perpetual boons in matters of tech-efficiency. Cryptocurrencies, supported by Digital Financial Services (DFS), will continue to be a driving force.
Conversely, in this time of unprecedented interest there continues to be, perhaps for many, a concerning lack of transparency. Cryptocurrency investment confidence is key; technological private sector-driven innovation in tandem with appropriate and effective public sector oversight and regulation are the leading candidates in addressing these concerns.
Incorporating e-identity and a trust model into digital currency transactions will deliver safeguards that would elevate risk controls and therefore protections against identity fraud in the marketplace.
With the cryptocurrency market remaining relatively unregulated, particularly with respect to Government Monetary Authorities, the identity of the cryptocurrency holder remains largely opaque. Smart technologies that incorporate facial biometrics could very well become increasingly relevant to the market.
What do you foresee as the major challenges and opportunities in e-Identity and how do you aim to overcome them at Paycasso in future?
First, let’s speak to the challenges as I see them – e-Identity is an evolutionary process. The innovations in authenticity, be it at border controls or within one’s mobile wallet, are consistent only in that technology is always improving.
Across the board adoption of this technology and its uniform use in both mature and emerging markets around the world, will no doubt pose additional challenge, one we at Paycasso never shy away from.
We then must speak to regulatory environments in those global markets. Ensuring commercial and consumer interests are adequately protected requires a cautious approach to regulatory amendments that address the effective shift from brick and mortar institutional banking and physical currency to remote, mobile banking and technology-driven commerce.
And there are very sound reasons for trepidation – dramatic technology driven change, where the delivery and access to financial services is a prime beneficiary, creates significant opportunity for those with nefarious intent. Effective safeguards that adequately consider new and rising threats for both commerce and consumer are essential.
Then we must speak to the use of certain high profile technologies. Whilst a number of new technologies lend themselves terribly well to decision making processes and ultimately driving better outcomes for all parties, there are properties that are unique to identity and use of these very same technologies could have significantly different outcomes. Artificial intelligence or ‘A.I’ as an example, is beginning to be represented as a potential ‘game changer in the marketplace. In my opinion, if not appropriately considered and applied, could pose the proposition of a false ‘safety net’, one that could support a viable initial foothold for the scaled use of synthetic identities.
Turning to the opportunities in the future, they are abundant. From continued enhancements in person-to-person financial transactions supported with our technology to, and I must stress this, public private partnerships (PPP). We recognized that Regulatory Authorities must be part of the conversation if we were to successfully foster an environment to effect change. Our consistent, open and transparent engagement is critical. Patience and deliberacy in articulating the evidence based proposition and demonstrating efficacy has, in my opinion, garnered a level of trusted authority within this community and in certain cases contributed in resulting to a publicized leadership role for the company. We will continue to make the investment in broadening visibility and our contribution to the public sector.
Ultimately, we must all continue to evolve to meet rising demands for technological innovation to thrive. I certainly believe that Paycasso has, in its short history, made a significant contribution to creating the opportunity for real and positive change. The passion and belief we have as an organization in what we set about to achieve, its importance beyond our own door and ultimately the positive nature of its impact in the marketplace and on the consumer are without question, key factors in what we have achieved to date and will continue to be driving factors in shaping our future.