BIOMETRIC PAYMENTSVIRTUAL SUMMIT

5 MAY 2020

SUMMIT SPONSOR

PRESENTED BY

AGENDA

13:25

WelcomeAlan Goode, CEO & Chief Analyst, Goode Intelligence Opening keynote: The impact of COVID-19 on payments withNick Kerigan, Future Payments Expert and Senior InnovationLeader Panel discussion: The impact of COVID-19 on Payments andthe importance of biometrics in addressing the challengeswith Nick Kerigan, Alan Goode and Joe Bloemendaal, MitekSystems; moderated by Michelle Goode, Goode Intelligence Man and machine in synergy, delivering banking gradeassurance - Joe Bloemendaal, Mitek Systems Latest trends in biometric payments: an analyst’s view - AlanGoode, CEO and Chief Analyst, Goode Intelligence Panel discussion: The importance of Biometrics for PSD2 SCA:What's the latest and what's the role of biometrics in ensuringcompliance? With Martin Ingram, Identity & Access ManagementProduct Owner, Royal Bank of Scotland; Fredrik Sjöholm, VPSales, Precise Biometrics and Gautier Walckiers, Manager,Product Management, Cyber & Intelligence Solutions, Mastercard;moderated by Alan Goode Harnessing the power of biometric payment cards, FredrikSjoholm, VP Sales, Precise Biometrics Closing thoughts Close

13:00

13:10

14:00

14:20

14:40

15:15

15:30

15:40

THE IMPACT OFCORONAVIRUS ONDIGITAL IDENTITYAND BIOMETRICS

We are living in unprecedented times. TheCoronavirus (COVID-19) crisis is a globaltragedy that is affecting every part of ourdaily lives. The question on when the worldwill return to normality is a difficult one toanswer. The emergency measures thatinclude restriction on travel and socialdistancing may well be still in operation into2021. I believe that this Coronavirus is acceleratinga number of key megatrends of the lasttwenty years, collectively classified as digitaltransformation. Moving away from physicalservice delivery to digital service deliveryconsumed on any device that can run an appor load a browser. This affects most sectorsbut is most acute for retail and financialservices with physical stores and bankbranches being replaced by remote digitalservices. The need for social distancing is forcing all ofus to perform more of our daily tasks fromhome. As a CEO of a small business, I amvery used to working from the home officeand talking to clients and contacts around theglobe. I am now joined by my children whoare having their lessons delivered digitally viaplatforms that are normally used for businessweb conferencing – some of which aremanaging to stay up with the increased

demand. This is a seismic event, onethat will put a strain on bothtechnology delivery and society. The need to accurately identify andauthenticate people, and to authorisetasks and transactions through digitalchannels will accelerate. There will beincreased demand for identity andauthentication solutions that workseamlessly across endpoints, that areapplication-appropriate, that complywith regulation, that reduce ormaintain acceptable levels of fraud,and meet sudden surges of demand(scale). This is happening across all verticals;retail, finance, government,entertainment and education. Whatwill be interesting, is whether this‘emergency’ measure will become

"Coronavirus is

accelerating a number

of key megatrends of

the last 20 years"

Alan Goode,

Goode Intelligence

more of a permanent feature. Once we startto recover from the crisis, will we go back tocommuting to work, shopping in physicalstores, banking in branches and visitingtheatres and cinemas? This is my personal view on the impact of thecurrent crisis on this sector, some have animmediate impact; others will materialiseonce the world recovers. Biometrics – Don’t Touch This! In addition to the impact of social distancingon the physical world, touching sensors onshared devices will be restricted duringthe crisis. This includes sensors integrated into shareddevices including ATMs, point-of-sale (POS)devices, door-locks and kiosks. It has beenreported by the New York Times, that theNew York Police Department (NYPD) hashalted use of its fingerprint entry system at itsHQ.[1] Where there is a legal or nationalsecurity need to use these devices, forinstance in border control, then operators willneed to keep these devicesclean. Longer-term, organisations may look atdeploying biometric sensors that avoid touchin shared and public spaces. We havealready seen technology integrated intoairports that allow passengers to ‘wave’ theirhands through a reader. This doesn’tnecessarily mean that organisations willavoid fingerprint as a modality – just don’ttouch. This should not include sensors that areintegrated into devices that are not regularlyshared, where a single user will enrol andverify; smartphones or biometric paymentcards for instance.

Biometric Payment CardsGauging the impact on biometric paymentcards, I am predicting a delay to large-scaledeployment by approximately one to twoyears. Existing pilots will need to be curtailedand new pilots will likely be postponed. Cardmanufacturing will be hit as factories areclosed down around the globe, althoughChina is slowly starting to re-open (seestatement in biometric sensors below). One of the biggest drivers for adoption isincreasing spend limits for contactlesstransactions. As a result of Coronavirus,countries with high contactless card adoption,including Egypt, Ireland, the Netherlands,Saudi Arabia and UK are increasing thespend limit to remove the need to enter in aPIN for higher value transactions. Ireland hasincreased its spend limit to €50 from €30, andthe UK has increased to £45 from £30. Thisis a small increase and does not offset thebenefit enabled by biometric payment cardsof lifting the spending limit for biometricallyauthenticated payment transactions or bringcontactless cards in line with mobile paymentwallets. Biometric SensorsChina, South Korea and Taiwan are thecentres of biometric sensor manufacturersand these countries have been at theepicentre of the crisis. Factories have beenshut down and will take time to get back toback to normal operating levels afterreopening. Factories, especially in China areslowly reopening but it has been estimated

that they are still operating at 70-80percent of their pre-COVID-19 capacity.[2]This will have a negative impact on thesupply of biometric sensors to OEMs,although this impact may be lessened as OEMs, in particular

Is it a real user? Is it authorised to use the data itpresented?Can you do business with the user?What is the risk of doing business with theuser?

mobile OEMs, have recently reported anover-supply. Demand for consumer electronic devices willbe dampened and this compounds thereduced demand for biometric sensors fromthe principle OEMS. There is demand for hybrid devices that canboth identify and perform an ‘at range’ quickbiomedical check on citizens to determine ifthey may have been infected. In China, thesehave been worn by law enforcement officersand have also been deployed as scanners atairports. Longer-term, this could potentiallykick-start the combination of biomedical andbiometrics in ‘worn’ technology – smartwatch, wrist bands and clothing – to createapplications that know who you are and howyou are. Checking body temperature, bloodpressure, ECG and heart rate and alsoknowing the identity of the person (patient). There needs to be an adequate privacy andtrust framework to support this collection ofsensitive personal data and it remains to beseen if these ‘emergency’ measures willbecome permanent once we are out of crisismode. Digital Identity Verification (Proofing)Digital Identity verification answers thefollowing questions:

Back in May 2019, I predicted that just over704 million digital identity verification checkswould be made during 2020 around theworld. As a result of the COVID-19 crisis andwith businesses increasingly reliant on‘remote’ technology to verify identity and toquickly onboard people to digital services, Ibelieve that this forecast needs to increase –probably by an additional 15-20 percent. Digital IdentityIn a Goode Intelligence analyst reportpublished in November 2019 covering themarket for verified digital identity, we forecastover three billion digital identity users by2025. I believe that this forecast still remainsrelevant but there will be different speeds ofadoption between verticals and applications.For instance, for air travel, the impact ofCOVID is resulting in considerable reductionin passengers. The number of passengerscoming through terminals for 2020/21 will besignificantly reduced. IATA has predicted thatthe virus will cost airlines $30 billion [3] andsee passengers numbers decline by 13percent. A driver for the deployment for the‘kerb-to-gate’ digital identity schemes hasbeen increasing demand on airlines and theneed to efficiently process passengersfrom the kerb to the gate. A consortium ofairlines, airport authorities and governmentshas developed single token systems thatleverage biometrics to ensure thatpassengers can check-in, pass throughsecurity and board the plane without the useof a combination of tickets, passports andboarding passes.

"Document accuracy is not where it should be. The combination of machine

learning and human review may add grit into the process and introduce cost

but serves to provide a positive outcome for customers"

emergency measures from centralgovernments. How Goode Intelligence is HelpingAs a business we have taken steps tosupport our community by suspendingphysical events and summits until the time isright to reintroduce them. As an establishedanalyst company with years of experience ofrunning online webinars we shall be creatinga number of virtual summits in the comingmonths to educate and influence our network.If you need support with research orinfluencing the industry, we would bedelighted to hear from you. In the meantime,please take care and stay safe. [1] https://nypost.com/2020/03/11/coronavirus-in-ny-fingerprint-security-protocol-halted-at-nypd-hq/[2] https://www.lazardassetmanagement.com/us/en_us/references/announcements/coronavirus[3] https://airlines.iata.org/news/coronavirus-outbreak-set-to-cost-airlines-30bn-in-revenue

There will quite likely be a revaluation ofthese schemes with reduced revenue andrepurposing resources to support passengermonitoring and virus containment. Containing the virus and monitoring citizensand has been a priority for many countries,especially those that have national identityschemes. I expect to see an acceleration inactive national identity schemes that collectour ‘digital exhaust’ – identifiable dataobtained from a variety of sources includingmobile networks and devices, travel/transportation, social network, healthnetworks, financial and payment systems.Even though we are in an emergencysituation, this type of ‘surveillance’ identitymust be carefully designed and deployed toensure that the privacy of citizens isrespected. Privacy legislation includingGDPR must be respected even in thesedifficult times. Business FinancingFinancing for businesses, especially pre-revenue start-ups may become more difficult,especially in the short-term. Investors havetaken a significant hit to their portfolios andwill be understandably more cautious aboutany new funding especially for pre-revenuefirms with lengthy runways. This excludes

Joe Bloemendaal, Head of Strategy, Mitek SystemsFor over 15 years I ran sales teams and loved being responsible for the business development in technology companies. Twice in my career, I’vejoined founding teams in companies’ early stages, remaining there until they were acquired. I’m an entrepreneur at heart, and enjoyed building themfrom local to international organisations. Currently I’m using my experience and expertise to help Mitek and our clients use technology to succeed inthe digital identity sector. I enjoy solving problems in this exciting and ever-changing environment. To escape the business world, I love the outdoors, preferably on a sailing boat. My last one was a Nacra F18 but with my family I usually go for amono-hull 😊. I like to meet anyone who works with identity technology. People who are interested in developing interoperable self-sovereign identity services,and care about protecting personal data because I believe the true potential of the Internet will only be unlocked if we can trust people online in thesame way that we can trust them offline. Alan Goode, CEO, Chief Analyst and Founder of Goode IntelligenceAlan Goode is the CEO, Chief Analyst and Founder of Goode Intelligence, a world-leading identity and biometrics research and consultingorganisation founded in 2007 and based in London. With 13 years of research and analysis experience and 17 years of senior management andtechnology consultancy including strategy and deployment, Alan is an expert in biometrics, authentication/identity, fraud management and cybersecurity. His previous roles include Head of Information Security at T-Mobile UK, Security Practice Manager at Atos Origin, Head of Digital Securityat De La Rue Identity Systems (including biometric passports) and Security Analyst for Citibank (Payments). Michelle Goode, Chief Operating Officer, Goode IntelligenceMichelle Goode is responsible for business planning, operational management and communications at Goode Intelligence. Prior to this Michellewas a key communications leader for leading financial and technology organisations with senior positions at the Pension Protection Fund, 3M andGEC/Marconi. She is an Associate of King’s College, London University where she graduated from with a BA (Hons) degree and holds a PostGraduate Diploma from the University of Warwick in International Engineering Management. Martin Ingram, Identity & Access Management Product Owner, Royal Bank of ScotlandMartin Ingram is the Identity & Access Management Product Owner for RBS, in charge of transforming identity & access management for RBS tosupport new customer digital journeys and requirements such as PSD2. Prior to RBS he has had a broad experience in security both from a vendorand a client organisation perspective having consulted or worked for organisations in Europe, America and Australia. As such he has been involvedin IAM, Crypto systems, Content Security and malware amongst many other security domains. Martin has a background in engineering and hasbeen on the board of several start-up technology companies. Nick Kerigan, Future Payments Expert and Senior Innovation LeaderNick is a Future Payments Expert and Senior Innovation Leader. In his most recent role, he was Managing Director for Future Payments in Barclaysin London, leading a team of strategists, designers and developers responsible for Innovation across the Cards and Payments businesses, creatingnext-gen payments experiences and partnering with FinTechs. He has strong expertise in digital payments, growth strategies and productdevelopment, based on a deep understanding of customer and merchant trends, and grounded in more than 20 years’ experience in developed andemerging markets. He drove cultural change around innovation in a Barclays, alongside creating a strong brand profile as a top 100 financial sectorinfluencer on social media. Hence he is optimally placed to drive new growth in established and scaling financial services businesses. Nick is an established conference speaker at industry events including Finovate, FinTech Connect, Fintech World Forum, The Cards and PaymentsSummit, Lafferty International Cards and Payments Conference and the Future of Payments Conference. He has an established presence as athought leader in payments as the author of many articles and monthly blog. Nick was with Barclaycard since 2011 and with Barclays since 2006, invarious digital, market intelligence and strategy roles including Head of Strategy for Retail and Business Banking. Prior to that, Nick was PrincipalBanker in private equity at the European Bank for Reconstruction and Development (EBRD), where his role included investing in financial institutionsin CEE. Earlier in his career, he worked for the Financial Services Authority supervising banks. Nick has a First Class Honours Degree inPhilosophy, Politics, Economics from Magdalen College, Oxford University. Fredrik Sjöholm, VP Sales, Precise BiometricsFredrik Sjoholm heads up sales and business development at Precise Biometrics, exploring how biometrics can make people’s lives moreconvenient and secure. He leads Precise Biometrics efforts in transforming identity authentication for smart cards, smartphones and digital services,and as such improving ease of use and security. Fredrik has many years’ experience from sales management and business development attechnology companies such as Cybercom, ENEA, Sony Ericsson and Telelogic. Gautier Walckiers, Manager, Product Management, Cyber & Intelligence Solutions, MastercardGautier Walckiers is part of the European Authentication department at Mastercard, looking at the onboarding of Merchants and Issuers on EMV3DS, the EMV 3DS testing solutions and product owner of the Mastercard biometric authentication SDK “Identity Check Mobile”. Prior to Mastercardhe worked for the Belgian Payment Service Provider Ogone (acquired by Ingenico Group) for seven years.

SPEAKERS

Machine-learning algorithms can digestmultiple secu rity features in a passport ordriving licence and know whether it’s fake.This can be combined with a selfie takenby the consumer on their mobile phonewhich verifies them using livenessdetection. Fully automated sys tems can be fasterand are sufficient for many requirements.Computers can be better at facialrecognition, and artificial intelli gence-powered technology can rec ognise a validID as genuine and match the ID photowith a selfie using biome tric facialcomparison. But while algo rithms arepowerful, they are not per fect and thereare exceptions that the technology hasnot yet been trained to recognise. This iswhere agent-as sisted solutions come intotheir own. Human experts are still betterat spotting fraud in some forms of paperID. For this reason, we still need peopleto assist in digital onboarding.

During the coronavirus lockdown, as millions areworking and shopping from home, verifying peopledigitally has never been more vital. It’s not justbanking. Government benefits, health services,online edu cation, dating companies and gaming arejust some of the sectors witness ing a huge surge indemand for digital know-your-customer services.The outbreak is also proving fertile ground forfraudsters exploit ing the global rise in onboarding.This is expanding the use of digital authen tication. Many claim that fully automated processes are thefastest way to alleviate risks and reduce fraud.However even in 2020, most forms of ID are stuck inthe analogue world. There is no comprehensive,interoperable digital identity that exists anywhere inthe world. Fraudsters are hot on our heels cre atingfake IDs and we estimate that about 20 percentof the techniques they deploy each year are new.You cannot account for all types of ingen ious fraudin an automated system. The science behind digital authen tication hasbecome more complex and automated than at anypoint in history.

Joe Bloemendaal, Head of Strategy, Mitek

Man or machine: which provides the highest assurance levels?

Guest article

With over 36 years of experience, Mitek knows the importance of the human expertwho knows what the latest fraudulent activity looks like. Man and machine mustwork together to reach the highest levels of assurance. Machines don’t teachthemselves; they learn from experts. Capturing the latest fraudulent IDs andfeeding these into powerful analytical systems allows com puters to spot fakedocuments, continually improving the machine’s abilities. It’s not man or machine,it’s about using the best of both to achieve the highest possible assurance levels.

"Man and machine must work

together to reach the highest

levels of assurance."

Mitek (NASDAQ: MITK) is a global leader in mobile capture and digital identity verification solutionsbuilt on the latest advancements in computer vision, artificial intelligence and machine learning.Mitek’s identity verification solutions enable an enterprise to verify a user’s identity during a digitaltransaction, which assists businesses operating in highly regulated markets to reduce financial riskand meet regulatory requirements while increasing revenue from digital channels. Financialservices, marketplaces and other organisations around the world use Mitek to reduce frictioncreating the digital experiences their customers expect. Mobile Deposit® and Mobile Verify® areused by millions of consumers for check deposit, new account opening and more. The company isbased in San Diego with offices in New York, London, Amsterdam, Barcelona, Paris and StPetersburg. Learn more at www.miteksystems.com

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The nexus between physical and digital identity