TFT webinar experts call for smarter digital ID to fight fraud
A recent webinar hosted by The Fintech Times (TFT) explored how digital identity solutions can be used to combat the effects of the UK fraud economy.
The panel saw the participation of Sift Trust and Security Architect Kevin Lee alongside MP Lord Chris Holmes and Financial Services Advisor David Birch.
Defining the economics of fraud
The event opened with Lee illustrating the main causes of the fraud economy today.
These include traditional payment fraud techniques such as credit card theft, money laundering and cryptocurrency fraud, but also account takeovers and disinformation techniques.
Lee also mentioned the lack of collaboration from internal teams, which opens the door to potential vulnerabilities within companies, as well as the proliferation of tools that are not necessarily compatible with each other.
Over the past year, all of these trends have escalated further due to the pandemic and the resulting growth in digital adoption around the world.
The characteristics of a new digital identification
Birch, who joined Biometric Update to discuss how sharing fraud information across a large network can help fight synthetic identity attacks soon after joining AU10TIX as an advisor , then took the floor, defining the role of digital identifiers in the fraud economy.
According to the financial adviser, the sector needs to “rebuild digital identities for the new era in which we live”.
Such a digital ID would have to exhibit three distinct characteristics, the first of which would be intelligence.
“Passports and driver’s licenses are stupid,” Birch said. “They don’t know who’s looking at them. They disclose everything to everyone, and they are indiscriminate in the type of information they provide.
A smart digital ID would instead be able to disclose only the information necessary for a given authorization action.
The second feature would be connectivity, designed as the ability to securely collect information about an individual for authentication and authorization processes, without having to disclose Personally Identifiable Information (PIP).
Finally, Birch said new digital identifications should be interactive, designed as capable of making intelligence decisions between individuals.
“It doesn’t just tell people other things about you, but also validates what other people tell you,” he explained. “There is a wonderful symmetry in this decentralized online world. It does not correspond to the hierarchies of the past.
Get involved in digital identification
Lord Holmes then discussed the importance of getting involved in the development and adoption of digital IDs, both from the public and private sectors.
Lee echoed this point, highlighting the benefits of digital identities in combating not only crime, but other negative online phenomena like bullying as well.
In other words, if an online interaction were tied to our true identity, individuals would likely behave more socially than they do online when their true identity is withheld.
The Sift executive also added that while privacy concerns are a reality when it comes to developing digital credentials, the benefits clearly outweigh those risks.
Hold the keys
The webinar then moved on to issues related to trust, who should be responsible for holding the cryptographic keys for user authentication, and whether it would be safer to deploy a decentralized system instead.
According to Lord Holmes, the UK’s efforts to develop digital IDs are currently fragmented, divided between different fintechs and government departments.
“The reality is that there is still an extraordinary need for government leadership on this issue,” he said, “whether it’s from the Cabinet Office, whether it’s from HMRC.
“It doesn’t matter which department has it, but there has to be a tighter grip, clearer leadership and a clear culture built around it,” Lord Holmes added. “An understanding of what we’re trying to deliver here. “
biometrics | David Bouleau | digital identity | fraud prevention | identity management | identity verification | secure transactions