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INNOVATORS VS COVID 19

A New Form of Identity Validation – Powered by a New Standard for Privacy

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Itay Levy Identiq

We talked to Itay Levy of Identiq about its a Peer-to-Peer network and Covid-19 pandemic.

First of all, how are you and your family doing in these COVID-19 times? 

Itay Levy: We’re doing well, overall – thanks for asking. Despite all the challenges, there have been positive aspects for us as a family – spending more time together, making more out of the time we have. I never would have thought to put up a swingset for my kids before all this started, but they love it, and by now, they can’t imagine a home without it.

Tell us about you, your career, how you founded Identiq.

Itay Levy: I started out as a software developer, but entrepreneurship was always my passion. I got my EMBA from the Kellogg School of Management at Northwestern University. I was part of the founding team of Buzzmetrics, which was acquired by Nielsen, and after that, I was the CEO and co-founder of Appoxee, which I sold to Teradata.

After that, I began another startup, also in marketing data and analysis. For the idea to work, we’d have needed to acquire a lot of data about consumers so as to be able to target them effectively. Exploring this took me down the rabbithole of personal data selling and sharing. I was so horrified by how easy it was to purchase sensitive personal information about people that I backed off completely. I didn’t want anything to do with it. In fact, I closed the startup down. 

I hated how data was being handled. I was sure there had to be a better way, and I started looking for it. I found providerless technology. Together with my co-founders, Uri Arad and Ido Shilon, I made that the basis of Identiq, and we created the world’s first anonymous peer-to-peer identity validation network.

How does Identiq innovate? 

Itay Levy: Innovation is at the heart of what we do – no one has ever done anything like this before. We bring companies together in a network where they can verify new users, or new user details, directly against the knowledge of other network members. All without ever sharing any personal user information. Not with Identiq and not with others on the network.

There’s nothing comparable on the market. I’d say we’re innovative in three ways: tech, approach, and focus.

We’ve taken mathematical and cryptographic techniques, which have been well-established and researched in academic circles for decades and used recent technical advances to apply them in the real world to fraud prevention. 

This tech’s potential is so huge that Gartner has actually made Privacy Enhancing Computation one of their top strategic tech trends for 2021.

The tech enables an equally innovative approach. Before, you always had to verify users using the information you got from third-party providers – data aggregators or brokers who gathered huge storehouses of consumers’ personal data. 

Fraud fighters all know the frustrations of that model – the data isn’t reliably fresh, and it’s hard to get coverage of various geographies and social populations, and so on. Not to mention the privacy problems it causes.

Now, it’s much simpler and much more effective. With Identiq, companies collaborate directly to leverage trust. It’s called providerless because the providers are out of the equation. It’s just companies working directly together.

So say I’m signing up for a new service. If the app is part of a network like this one, then my grocery store, my ride-sharing app, and my streaming service – all of whom know me way too well at this point – can simply confirm – yes, this is Itay, he’s been with us for years, we trust him, no problem. And that’s that. New details like credit cards or addresses become known and trusted quickly too. It’s so much easier for both consumers and companies – and all without any personal data being shared.

So the tech is innovative, and the approach is innovative. The third innovative aspect is that we kind of flip the traditional fraud prevention perspective on its head. Instead of looking for the bad actors, we show you the good ones – who are, of course, the overwhelming majority. They then get a great user experience. 

From the perspective of the fraud team, this makes their job much easier because the trusted users are easily and accurately identified for the. Then, fraud teams can spend all their time on the small number of grey area cases. Clear fraud signals show up in the network as well; for example, a known name and email being used with a different credit card, device, and IP is a sign that something strange is going on. 

How the coronavirus pandemic affects your business, and how are you coping?

Itay Levy: The pandemic has made it more obvious why online companies need a solution like Identiq’s. A flood of new users have come online, and consumers who shopped online before now do so far more than they used to. Digital transformation has rocketed ahead at least five years. Companies need to provide a service that keeps up with that demand and expectation. 

It’s hard to verify new users. How can you trust someone you don’t yet know? With Identiq, that’s no longer a challenge. You might not know them yet, but other online companies almost certainly do. Once you can leverage that trust, you can give good users the frictionless experience they deserve. Now, more than ever, companies are looking for ways to do that.

Identiq’s solution also identifies fraudulent actors, which is equally vital at a time like this. 80% of Certified Fraud Examiners say fraud levels rise in times of economic distress, and the coronavirus pandemic is, sadly, no exception. Fraudsters attack multiple businesses in quick succession, so a solution like Identiq’s, which enables them to work together and collaborate to catch fraud, just makes sense. 

Of course, it’s been an unexpected year, just like for everyone else. We’ve had to adapt to the new normal, both within our own team and work-life and in the way we interact with clients. Some of the changes have been beneficial – our member summits this year, both held during the pandemic, had even more people and more companies than we could have imagined when we originally planned a face-to-face event at the beginning of the year.

We’ve been surprised and impressed by how little difference the pandemic has made to many members’ commitment to being part of the network. Even in such strange times, data privacy is an issue that cannot be ignored. The CPRA legislation, passed in California only a few weeks ago, shows how strong the consumer concern for privacy is even in the midst of a pandemic. And a federal privacy bill is likely to come under discussion in the coming year. Companies want to future-proof their businesses against whatever change is coming. This innovative solution is a great way to do that without impacting business functionality. In fact, it improves functionality! 

Did you have to make difficult choices, and what are the lessons learned?

Itay Levy: It’s strange to think about now, but back at the end of February, we were agonizing over whether we should keep our member summit live and in person, in San Francisco, as planned, or whether to move online. We decided to move early before it was clear that things were all moving online, and it was fantastic – we had an amazing event with incredible energy in the virtual room. 

We’d decided to shift online before it was clear whether it was necessary or not because we prioritized the health and safety of our members. Doing the right thing actually got us even better results in the end. 

We’ve also had to decide whether we ought to be moving more slowly or changing anything in response to the pandemic. The lessons learned, for me, are twofold. Firstly, that a clear vision is crucial to success so that you always make choices that support that vision. Second, that there’s nothing more important than having an amazing team. I feel very lucky to be working with everyone at Identiq. It’s because of them that we’re this far into the pandemic and still going strong. 

How do you deal with stress and anxiety?

Itay Levy: I go running! Exercise is crucial for me. And I surround myself with great people – my family, and the fantastic colleagues I’ve been able to bring to Identiq. With them, I always know that I’m doing something important and that together we’ll make it work. 

Who are your competitors? And how do you plan to stay in the game?

Itay Levy: The third-party data providers who demand that companies both pay them and send them precious customer data in order to use their services. They then save that data and reuse and resell it. 

We have a totally different model. 

The positive validation aspect is crucial – being able to see which users are good, and should be trusted. It’s so different from just trying to pick out the bad guys. Fraud teams can see who they ought to be concentrating on and give everyone else a fast, seamless user experience. 

There are 2 other big differentiators, as I see it. There’s collaboration – something industry professionals tell us they’ve wanted for years. Because of privacy, until now, the best they could do is share blacklists, and as we all know, by the time you’re sharing the blacklist, the fraudsters have already moved on. Now they can really collaborate directly.

The third differentiator, of course, is privacy. A lot of fraud-fighting professionals aren’t comfortable with the amount of data they share with third parties for data enrichment. They know that the third parties keep the data and use it later in other contexts, never mind the fear of third party data breaches.

This kind of rampant data proliferation is becoming a risk for companies – both consumers and regulators are aware of it and unhappy about it. Shifting to an approach like Identiq’s is safer. You just stop giving out user data. They give it to you, you keep it, the end.

We’re compliant by default. No personal user data is ever shared. I’ll say this again – it’s not shared with other companies on the network, and it’s not even shared with Identiq.

We’re not just staying in the game; we’re changing the nature of the game. It’s a different way of verifying identities – one that is more accurate, gets better results and is far safer for all involved.

Your final thoughts?

Itay Levy: The third-party data provider structure made sense 50 or 60 years ago. People needed to have credit scores and so forth validated, and there was no other way to make it work except to collect lots of information in centralized data stores.

But now, that’s more of a liability than anything else. The massive data breaches of the last five years or so have shown us that. If you collect users’ personal data into a centralized location, you’re just creating a treasure trove for criminals. The Equifax and Experian hacks show this in a real and painful way. 

And the thing is – it doesn’t even work that well. The data is always decaying once it’s being stored. You never know how fresh or reliable it is when you’re making decisions based on it. First-party data is consistently fresh and far more accurate. 

Now that the technology exists to do it this way, it just makes sense to change.

Your website?

https://www.identiq.com/

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