The world is returning to many pre-pandemic norms, and Money 20/20 was no exception. There was quite a crowd at the Las Vegas show in late October 2022. Numerous people I spoke with commented that attendance was up considerably compared to last year, and the energy and excitement in the air matched the crowd size.
In walking the exhibit floor and talking to many companies showcasing their solutions, it was evident to me that identity was the main theme of the event. A large majority of the fraud and security vendors were touting how their identity solutions address the user authentication challenge for financial institutions and merchants.
This continues a general industry trend observed over the past few years where new tools coming to market are targeting how to protect companies and consumers across various stages of the customer digital life cycle: new account openings, online applications, and authenticating returning users as they log in to existing online accounts.
I am reminded of an insightful comment made by a fraud executive back in September 2022 at Aite-Novarica Group’s Financial Crime Forum. He said, “I am no longer fighting the fraud battle; I will not win it. I am now fighting the identity battle, which I think I have a better chance of winning. And if I win the identity battle, then my fraud losses will decline.”
Tools to Fight the Identity Battle
Money 20/20 exhibitors showcased a wide variety of solutions to help companies in the identity battle. These included solutions such as synthetic identity, 3-D Secure, Know Your Customer (KYC), biometrics in many forms (location, facial, fingerprint, eye, and behavioral to name a few), document identification and verification, and others.
Solution providers are prepared for the digital world in which we live, along with its growing use of mobile devices for banking and e-commerce. There were solutions specific to mobile phones, leveraging data from mobile network operators (MNOs) to validate identity as well as using mobile devices as an authentication mechanism. There were also firms that leverage the fraudsters’ domain—the dark web—to harness data to fight identity and authentication attacks.
No one tool will solve all identity problems all the time. Fighting identity risks usually takes a multipronged approach. A number of exhibitors touted orchestration solutions whereby, via a single API, a company can code once and gain access to a suite of solutions. This is enticing as it provides a level of future-proofing one’s technology stack by eliminating the need to integrate multiple point solutions in house. And as the orchestration provider adds new capabilities to its solution suite, users of that provider can easily tap into those new capabilities with minimal to no IT effort.
Change on the Horizon
On Sunday afternoon, Money 20/20 held a Fraud Summit, where I gave the keynote to kick off the event. The presentation included findings from a recent survey conducted by Aite-Novarica Group of over 2,200 consumers in the U.S., U.K., and Singapore about their authentication practices and preferences. Unsurprisingly, consumers are really bad when it comes to passwords: Nearly 80% reported some level of password reuse among various online sites.
However, 74% of consumers expressed a willingness to migrate from username/passwords to a more secure authentication method. This is encouraging news, particularly for the exhibitors with passwordless solutions. These solutions are beginning to mature, and consumers may be at a point where they will embrace them.
In speaking with a fraud executive, I likened today’s environment to financial services firms all standing around a pool waiting to see which one jumps into the passwordless pool first. Firms are hesitant to be the first, but they know they need to move off of passwords. Look for waves to be made when the first few firms jump in.
The 2022 version of Money 20/20 was a wonderful opportunity to see many former colleagues, meet new companies, and see what solutions are emerging in the fraud-fighting landscape. Based on the vendors I spoke with, the exhibit floor should be quite full in 2023.
How is your firm fighting the identity battle? Are you planning changes to your identity control framework? If so, I’d like to speak with you about it. Contact me at [email protected].
