US financial agencies highlight teams in remote digital identity proofing competition

Two U.S. federal agencies that oversee the law enforcement of financial crimes and seek to strengthen trust in the digital banking system announced three finalist teams in a competition to see who could best measure the effectiveness of digital identity proofing for remote banking. The competition drew the participation of experts from across the biometrics industry.

The Federal Deposit Insurance Corporation (FDIC) and the Financial Crimes Enforcement Network (FinCEN) held a tech sprint named, “Measuring the Effectiveness of Digital Identity Proofing for Digital Financial Services,” held from March 11, 2022 to April 4, 2022. The event brought nearly 60 participants from over 200 others divided into eight teams to present their solution to a panel of government judges. The question was: “What is a scalable, cost-efficient, risk-based solution to measure the effectiveness of digital identity proofing to ensure that individuals who remotely (i.e., not in person) present themselves for financial activities are who they claim to be?”

The two agencies state that digital identity proofing is becoming progressively challenged by compromised personally identifiable information, synthetic identities, and multiple, varied approaches for identity proofing. They also mention dynamic identity evidence like state mobile driver’s licenses or other identity credentials that are frequently updatable and interoperable, and behavioral analytics.

With the solutions offered by the tech sprint, the FDIC and FiNCEN hope to increase efficiency and account security; reduce fraud and other forms of identity-related crime, money laundering, and terrorist financing; and foster customer confidence in the digital banking environment.

Him Das, the acting director of FinCEN, says, “Identity is a fundamental cornerstone of financial integrity, and identity proofing is precisely the type of complex issue that benefits from public-private collaborations like this Tech Sprint.”

The panel evaluated the eight teams for creativity, effectiveness/impact, and market readiness categories. The three finalist teams comprise of participants from various disciplines, including biometrics and identity companies, and were selected for each category. For creativity, Michael Engle of 1Kosmos and Vadim Slavin of globaliD were picked as Team ConfIDence. For effectiveness/impact, Stephen Ritter of Mitek was chosen alongside Team Heimdall. For market readiness, Jay Meier of FaceTec made the list as part of Team Six.

Others in the competing teams that did not progress further include Paritosh Vatsal Tripathi and Mohammad Waqas Khan of Signzy, and Anthony Lam of iProov.

“We brought together a diverse collection of innovative and energetic minds to think deeply about how we can ensure bank customers are who they claim to be in our increasingly digital age,” comments Martin Henning, the FDIC’s deputy director of operational risk. “Helping financial institutions to stop identity fraud will help us to continue to have confidence in the safety and soundness of our banks and the integrity of the U.S. banking system.”

Though the tech sprint was hosted in the U.S. and focused on the American context, Dominican Republic Superintendent of Banks Alejandro Fernández W. said at a recent lecture that the country’s banks are hurriedly implementing face and fingerprint biometrics as they digitize their operations, Dominican Today reports.

Dominican banks are moving towards the same remote processes as those examined in the competition, according to Fernández W., who says 55 percent are now using cloud data storage, and that online and mobile app transactions are approaching 50 percent for some institutions.

The global market for biometrics in banking and financial services is expected to reach $8.9 billion by 2026, according to a new report from Global Industry Analysts’ StartegyR, driven by attempts to stem security breaches and money laundering. The forecast is based on a $5.2 billion market in 2022, growing at a 12.8 percent compound annual growth rate.

Fingerprint biometrics are expected to make up a large majority of that 2026 market, at $6.2 billion, in part due to the relative ease and low cost of implementing the modality in various systems, including ATMs.

Article Topics

AML  |  banking  |  biometrics  |  digital identity  |  financial services  |  FinCEN  |  fraud prevention  |  identity verification  |  KYC  |  onboarding  |  remote identity proofing  |  secure transactions  |  synthetic identity fraud