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Fintech News Supplements 2021 The Fintech Magazine Thought Leadership

EXCLUSIVE: ‘A world on the move’ – Garient Evans and Hal Lonas, Trulioo in ‘Discover Sibos 2021’

EXCLUSIVE: ‘A world on the move’ – Garient Evans and Hal Lonas, Trulioo in ‘Discover Sibos 2021’ | Fintech Finance

There’s never been a more urgent need to create a digital identity system that keeps both people and their data safe. With fresh capital and ambitious expansion plans, Trulioo is determined to be that solution. Senior VP of Identity Solutions Garient Evans and Chief Technology Officer Hal Lonas, who both recently joined Trulioo’s expanding San Diego office, explain how. Hal Lonas, Trulioo | Fintech Finance

For most of us lucky enough to live in relatively wealthy and peaceful societies, not being able to move around the world at will during the pandemic was an inconvenience. Now that 2.9 billion people have received their first COVID-19 jab, just over one billion of whom have been fully vaccinated, many are regaining that freedom. But international travel comes at a price: your liberty for your data, specifically, your health status. Meanwhile, 80 million people weren’t lucky enough to sit out the pandemic in their home country. They were forcibly displaced by war and internal conflict, according to the UN Refugee Agency (UNHCR). That figure was a grim milestone and one that’s likely to be surpassed over the next few months as conflict in Afghanistan once again escalates, China tightens its grip on Hong Kong, and a humanitarian crisis deepens in Yemen.

The World Economic Forum estimates that, in a normal year, there are 272 million people – 3.5 per cent of the world’s citizens – moving across borders, mostly for work. But ‘normal’ years may no longer be a sensible yardstick. The International Organization for Migration predicts that there is another, even greater force, that will see huge personal, inter- and well as intra-continental upheaval , and that’s climate change. Unchecked, the IOM fears it could create anything from 25 million to two billion ‘climate-displaced persons’. The twin existential threats of a global pandemic and global warming have demonstrated that we are all citizens of the same, vulnerable world, but among the poor and the growing number of uprooted are many who cannot prove they are citizens of anywhere. They make up the one billion lacking any legal form of identification, and therefore denied access to even the most basic financial and other essential services.

Against this backdrop, governments’ post-pandemic ambition to ‘level up’ society leaves many policymakers unequal to the task, however virtuous the ambition. At the same time, governments are wrestling with the politically sensitive and technically challenging issue of how to attach a COVID-19 vaccination record to an individual in such a way that it can be accessed anywhere by those with the authority to view it – and that could be anyone from a border official to a nightclub bouncer. It’s likely that, without such certification, international travel will be limited or denied, while, in some areas, including certain US states, even grocery shops will be off-limits.

It was precisely to avoid people being robbed of the fundamental human right to prove their existence and claim the freedoms that others enjoy that Canadian regtech Trulioo began building a digital ‘trust network’ back in 2011. Its mission was to ensure that everyone was someone in the eyes of the world – and, specifically, of financial institutions – by creating an online digital identity from multiple, verifiable data sources that are dynamically updated. With more accessible personal information comes more ability for people to control their economic outcomes, it argued. They would be better able to access the resources they needed to prosper on an individual level, and this would unleash new levels of growth on a country-wide scale. Put another way, it was talking about the levelling up of the global economy, long before the phrase became a vote winner.

But Trulioo’s ambition now feels more like an imperative. And with one of the largest single funding rounds ever seen in Canada now safely tucked under its belt, it’s doubling down on the task. In the 10 years since it was founded, Trulioo has refined the technology with which it hopes to achieve its purpose, and expanded the territories in which it hopes to deliver it. It now provides real-time identity verification for five billion customers and 330 million businesses, in nearly 200 countries, through its GlobalGateway identification platform. It’s become the world’s largest identity verification marketplace.

Geraint Evans, Trulioo | Fintech Finance

In 2020, Trulioo was listed among Canada’s 100 fastest-growing companies, with an annual growth of 503 per cent and, in 2021, it was included in the Narwhal List of successfully scaling private enterprises. Its $394million Series D funding in June, led by TCV, one of the world’s largest growth equity firms, with participation from existing investors, pumped its valuation to $1.75billion and gave Trulioo the capital to accelerate its goal to become an end-to-end identity platform.

By the close of 2021, the size of its overall workforce will have increased two-fold, with a new customer-facing team established in Austin, Texas – a top technology hub – and an engineering team, focussed on artificial intelligence and machine learning, established at its existing office in San Diego, where there is already a strong digital identity ecosystem. Its current 260-strong workforce is distributed across Canada, the States and Ireland – all in locations carefully chosen to attract and keep top talent. There are plans to add additional offices in 2022, including in Asia.

Both based in San Diego, Garient Evans recently joined Trulioo as senior vice president of identity solutions, and Hal Lonas as chief technology officer. Evans, who has more than 20 years of experience in credit, identity, fraud, document verification and compliance, has been brought in as Trulioo continues to develop ways to deliver even smoother digital identity verification. Meanwhile, Lonas, who has been a technology leader for 25 years, now heads up all aspects of Trulioo’s technology development, ensuring the adaptability of its technologies around data, privacy, security and the expanding ecosystem of identity verification, with a particular focus on the use of biometrics.

Joining Trulioo is never just a career move: you have to buy into its mission to democratise the digital economy. And Evans says that aim for him is ‘very personal’, even if the scale of what needs to be achieved is mammoth. “It’s not going to happen in my lifetime,” says Evans, “which means that Trulioo’s got a lot of work ahead!” For Lonas, this particular moment in history, though, represents a critical opportunity to catalyse change.

“The pandemic has really accelerated us into the future,” he says. “The technological transformation of businesses is accelerating, and we’re in the right place, at the right time, to really help them and individuals take advantage this new digital economy.”

A real melting pot

In 2018, McKinsey forecast that the identity verification (IDV)-as-a-service industry would grow by nine-to-15 per cent a year for the next four years. Throw into that mix the huge and many permanent lifestyle changes forced upon the world by the COVID-19 pandemic, and the result is a demand for digital IDV that has never been greater. But if digital identities are to be truly portable across the world, it demands closer co-operation between the public and private sectors, says Evans.

“The challenge is making it a global experience. If a financial service wants to be able to operate in different jurisdictions with different rules, sometimes it comes up against the fact that paper is required in those areas. It needs government support to transition to being paperless. That’s where public and private collaboration is so necessary. We have to work with local politicians to get them to accept and own the fact that they can make life more convenient by embracing digital technology.”

As many of those politicians now back some form of vaccine certification, the call for digital COVID passports could be seen as a catalyst for that. It is, in fact, as Trulioo’s chief operating officer Zach Cohen recently pointed out, only the second globally co-ordinated attempt to establish such a verification system: the first being travel passports, which still exist as paper records. For it to be seamlessly interoperable and not put individual’s data at risk, he’s suggested that such a COVID-secure system would need to be underpinned by a new database so that the information is detached from other personal data. But who or what unlocks that information, given that most of us can’t remember where we put our car keys, gives rise to the question, where could it be stored? Decentralised identity solutions to minimise the risks associated with COVID-19 passports and, indeed, any other reason to validate one’s ID, would appear to be the answer.

EXCLUSIVE: ‘A world on the move’ – Garient Evans and Hal Lonas, Trulioo in ‘The Fintech Magazine’ | Fintech FinanceIn a recent blog, Lonas suggested that blockchain technologies could ‘create a secure, public and anonymous storage platform for identity data, and if this is combined with the requirement to use biometric authentication – something that, unlike a password, can’t be lost and is much more difficult to steal – as the means to claim identity, the process is both transparent and secure’. But he added that such self-sovereign identities would only become mainstream if governments ‘relinquish their sole responsibility for issuing and storing our identity information’. It would also need the technology to widely accepted and for the solution to ‘scale massively and cheaply’.

Evans welcomes early signs that governments are co-operating over COVID passports – at least in Europe. “Legislation and regulation can help with standardisation. It makes the decision-making process for technology providers easier and better.

“So, I do think that the EU coming together to propose these [COVID-19]passports, and describing how they should operate is really important. You don’t want lots of different approaches because you end up with passports that are not interoperable and are unreliable.”

Blurring the lines

When it comes to identity verification in financial services, the first ever legal framework was laid down by the USA Patriot Act in 2001, which sought to prevent, detect and prosecute money laundering and the financing of terrorism, and spawned similar KYC and anti-money laundering (AML) laws globally. As e-commerce developed, strict privacy legislation was also introduced by regulators to protect consumers’ personal data from being misused or falling into criminal hands. E-commerce, of course, gave rise to the emergence of big techs like Amazon, which changed consumer expectations forever by offering fast, secure and convenient onboarding to the point where every business operating in the digital economy must now up their game. And, as Evans points out, their arrival has also fundamentally changed financial services.

“Now the tech providers are financial services,” he says. “In 2017, Amazon lent US$1billion in cash advances to its merchants. So the lines are blurred between companies that were strictly technology, or e-

commerce, or marketplace; now they are clearly participating in this financial market. Walmart even applied to be a bank about 15 years ago; they were denied that, but they have continued to offer financial services. “All that has meant more choice for consumers. Gone are the days when someone stuck with the bank where they opened their first account; now people have many relationships, maybe dozens of relationships, across their financial lives.”

Evans suggests that the way financial institutions can compete with that is through a combination of strategy, technology and talent. “For me, strategy is the intersection between customer need and product value. Some institutions are so obsessed with managing risk, that they’ve made their products really hard to get hold of; while others just have horrible technology that doesn’t allow the match between product value and customer need. But getting the strategy right is nearly impossible unless you have a flexible core technology. “Those responsible for user experience should view their work as being highly scientific, where they’re constantly testing resources, features and capabilities. If the underpinning technology doesn’t allow for that type of experimentation, the right strategy is going to be nearly impossible.”

Institutions have at least acknowledged the need for customer-centricity. “When it comes to talent, the largest bank in the US has more than 800 job postings for individuals with the term ‘user experience’ in their profile, which is roughly 10 per cent of all of its openings,” says Evans. “The demand for talent to be able to drive a better customer experience, is just one sign of how financial services view this as an area of competition and core competency.” But there is still a tension between build, buy or partner in order to innovate, he adds.

“Traditional banks are buying services from solution providers like Trulioo, where almost the entire onboarding experience is outsourced via APIs. You have some institutions that have tried to build their own offerings, with mixed success, and then you see some traditional institutions, like Goldman Sachs, having a tonne of success building things on their own, as with [its digital bank] Marcus. There are others that have just abandoned the effort to have a completely digital experience of their own. “So, what you can expect to see is a tremendous amount of merger and acquisition activity playing out over the next few years, where traditional institutions that can’t do it themselves buy players that are truly innovative.”

SIZE DOESN’T MATTER

Trulioo, meanwhile, continues to plough an independent furrow, exploring every opportunity for contextual, proportionate, secure and fast IDV – and not just for large organisations. Authenticity and fraud prevention is just as important for a startup or small business, which arguably has more to lose and much to gain from digital verification software – smaller players in underbanked markets in particular.

Last year, Trulioo announced that it had developed facial recognition and document verification technology to give small businesses the same level of online protection, and offer the same level of access to customers, as large corporates. The new features allow for ID documentation verification and biometric authentication for an added layer of security. This enables small and medium-sized enterprises (SMEs) to check the authenticity of government-issued ID documents and use facial recognition with liveness detection to ensure the person creating the account matches the photo on the ID document. That technology is likely to play a major part in Trulioo’s drive to capture more business in the US, where documents like driving licences, which vary hugely from state to state, are still commonly used for identity verification.

“Just look at the proliferation of documents in the States,” says Lonas. “We have been able to take care of that for our customers by building technology that makes a complicated set of connections seamless for them.” Lonas is convinced that biometrics used for digital identification will become commonplace globally, partly because of the pandemic highlighting the need for inclusion. There is, however, that question over  whether ‘identifying the world’ can be achieved without state-backed intervention. Lonas acknowledges the progress of the Indian Government’s Aadhaar project in capturing the biometric details of 1.3 billion people since 2009. But the success of the Aadhaar project was underpinned by trust, which was called into doubt during the pandemic when the data collected was linked, unbeknown to the owners of those identities, to another programme involved in the vaccine roll-out.

Trust is one of five vital components identified by Trulioo for creating a successful digital identity ecosystem, the others being simple onboarding, user experience, security and fraud resilience.

“Everybody wants that low-friction, high-confidence, high-trust experience, but then sometimes that creates contradictions in the space,” explains Lonas. “Where do we set the dial to ensure the lowest friction with the highest confidence and trust? Making sure all consumers feel comfortable and confident with not only the onboarding experience, but transparency around the security of their data and where it’s going, is a balancing act. They want to know they are dealing with a trusted partner.

“In future, this is a perfect opportunity for artificial intelligence (AI) to help us process the amount of data we need, and spot the subtle signals that, amidst all the noise, make sure we identify people correctly.” Evans agrees that the use of AI and machine learning will only expand as the need for effective data processing and analysis becomes ever-more critical.

“I’ve heard the quote that data is the new oil. And, much like oil raw from the ground, it needs to be treated in a particular way to make it valuable,” Evans says. “It’s not enough to have fantastic data; you need to be able to derive actionable insights from it. To prevent money laundering and terrorist actions, and accurately identify individuals is a never-ending exercise. “To meet compliance requirements, a financial institution must be able to mine data and transactions and then investigate and report on anything it finds that the laws say it has to do something about.

“Cutting-edge institutions will bring in onboarding experts and work with third parties in the identity space, like Trulioo, to secure customer interactions and ensure their compliance. These organisations rely on us to test new technologies and new capabilities, and bring them the best possible solutions. They realise that building a network of really advanced global technology like ours would take them a decade to do, as it did us. We don’t think there’s a one-size-fits-all approach, so we explore things like biometrics, bank account verification, device intelligence and document verification, in order to meet different needs and we’ll continue to be a flexible marketplace for these solutions.”

Meet the San Diego Team

Kim Hong, Trulioo | Fintech FinanceHal Lonas, Trulioo | Fintech FinanceGeraint Evans, Trulioo | Fintech Finance

Trulioo’s new San Diego office is headed up by three senior executives – Kim Hong, Senior Vice President, Marketing; Hal Lonas, Chief Technology Officer and Garient Evans, Senior Vice President, Identity Solutions. The next two years will see them being joined by more than 30 employees in engineering – notably, artificial intelligence and machine learning – as well as sales, partnerships and marketing roles.

Nestled down on the Pacific coast in sunny California, close to the Mexican border, San Diego is widely thought to be gaining ground on established fintech centre Silicon Valley, which is just a 30-minute flight away. As well as playing host to some of the world’s fastest-growing tech startups, big-hitters Google, Apple and Amazon have a presence. The US’s eighth-largest city is considered to have a real advantage over traditional hubs when it comes to cost of living and availability of development talent. It’s certainly popular – according to CBRE, it is the sixth fastest-growing US city for software and technology professionals.

Trulioo’s decision to establish itself in San Diego was influenced by all of this, plus the fact that there are nearly a dozen identity companies – small and large – which contribute to the digital identity ecosystem in some fashion, such as document verification, biometric authentication, digital identity networks and AI/ML fraud detection technologies.

Meet the Austin, Texas Team

James Robison, Trulioo | Fintech FinanceMatt Schatz, Trulioo | Fintech FinanceArika Swank, Trulioo | Fintech FinanceCarlo Toffano, Trulioo | Fintech Finance

At first glance, the capital of Texas might appear a less obvious choice for Trulioo to base a customer-facing team, which it plans to grow to more than 25 staff over the next two years. But this well-educated town is punching above its weight when it comes to attracting America’s fastest-growing companies – it’s among the top 10 in the FT-Statista rankings. In fact, the city has dubbed itself ‘Silicon Hills’, in recognition of the rapid influx of tech, including from Silicon Valley.

Elon Musk was one of the first entrepreneurs to base himself there, with facilities for manufacturing Tesla electric cars and components for his SpaceX venture. A number of Fortune 500 companies have their headquarters or regional offices in Austin, too. A lack of state income tax, light-touch regulation and a government renowned for supporting business development, also make it attractive to startups and the new tech blood is creating a diverse living and working environment in a town previous dominated government, education, and music. On the downside, that’s pushing up house prices!

Trulioo chose the States’ 11th most popular city, and the country’s southernmost state capital specifically because it has grown to become a top technology hub in the United States. “We want to tap into the massive talent pool here in Austin to continue our growth trajectory,” says Matt Schatz. “Austin is such an exciting and vibrant place to be, with technology companies both big and small choosing to open up offices here.”


 

This article was published in Discover Sibos 2021, Page 20-22

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