Onfido partners up to research identity portability in UK financial ecosystem
Onfido has teamed up with Ethereum blockchain-based digital identity platform uPort and PwC to delve into consumer identity mobility in the financial services industry in the UK and around the world, the company announced.
uPort and Onfido want to empower consumers with access and control over their data. This year, they both joined the UK’s Financial Conduct Authority Regulatory Sandbox (Cohort 5) to investigate how disseminated identity can enable fintech ecosystems in the UK. PwC is joining the pilot to work with them on developing an open financial ecosystem where users are in control, can securely manage their personal data, and trust and privacy are ensured by decentralized identity.
“The ability for customers to use their digital identity to on-board seamlessly with financial firms will be game-changing,” said Mike Kennelly, director at PwC focused on Open Banking and Digital Transformation. “It opens up access to financial services, helps reduce fraud and is instrumental in driving more competition into the U.K. banking ecosystem. PwC analysis suggests technological step changes in the banking sector could bring a boost of more than £34.6bn to the UK’s economy by 2030.”
“With PSD2, the UK-wide directive that came into effect on September 14th, 2019, we see an increased demand for secure and privacy-preserving solutions that facilitate personal data sharing between financial institutions,” said Alice Nawfal, Strategy and Operations lead of uPort. “Our view is that consumers will eventually be able to build dynamic, robust financial identities based on data from all financial institutions they have accounts at, and be able to port their identities across service providers.”
Customer onboarding can be costly and tedious due to costs associated with KYC and AML compliance efforts. As a result, financial institutions could deliver a bad customer experience that would lead to customer drop-off.
Under the partnership, the three organizations aim to build “more holistic, open financial reputations” through portable identity verifications that would enhance onboarding experience and cut down on compliance costs. A top priority will be to analyze how a lightweight identity ecosystem can optimize the procedure financial companies in the UK have to verify identity and be KYC compliant.
“We know the old shared identity ecosystem of centralized models simply no longer works – it doesn’t work for customers because it’s vulnerable to being hacked, nor does it work for businesses since, for example, knowledge-based questions are no longer robust, because of the hacks,” explained Husayn Kassai, Onfido’s co-founder and CEO. “We believe in a world where identity is the key to access and this key should be held only by the customer, but used across multiple businesses to aid access and convenience, faster onboarding without compromising security, and improved KYC and CDD processes.”
In September, Onfido teamed up with blockchain payments platform Nuggets to deliver a private payment and identity solution with facial biometrics and zero-knowledge cryptography. Soon after, Onfido announced 171 percent quarter-over-quarter revenue growth, after its revenue had already increased by 137 percent on a year-over-year basis in Q1 2019.
Onfido has been named number one on the 2019 FinTech50, as judged by a panel of international experts.