How is SmartSearch constantly innovating to keep you ahead of evolving fraud threats?
Tune into this must-watch SmartSessions episode as host Ollie speaks with Fraser Mitchell, our Chief Product Officer, and Geraint Rodgers, Marketing SME, Identity and Risk.
They'll dive into our pivotal partnership with Daon, the Digital Identity Trust Company, and reveal:
Discover how SmartSearch continues to lead the way, combining unparalleled technology with strategic partnerships to build a more secure future.
Oliver Telfor: Welcome to SmartSessions, a podcast where we talk all things SmartSearch, AML, and regulations. Today we're gonna be talking about our new partner, Daon, and what that means for our SmartDoc and what the upgrade looks like. I'm joined by two experts today who are gonna introduce themselves now, and then we'll get on with the show. So, Fraser, over to you.
Fraser Mitchell: Hi everybody. I'm Fraser Mitchell. I'm Chief Product Officer for SmartSearch.
Geraint Rogers: And I'm Geraint Rogers. I'm the Market SME for Identity Fraud and Financial Crime for Daon.
Oliver Telfor: So for those of us who are not aware of what SmartDoc is and what the product is that SmartSearch provides, Fraser, can you just give an overview of what SmartDoc is?
Fraser Mitchell: Yeah, certainly. So, SmartDoc is essentially a document verification service. What we will do is send a link to a user via either email or SMS. They can click that link. Typically, they'll take a selfie, a copy of the document, and then we'll electronically verify that the document is valid, hasn't been tampered with, there are no signs of fraud, and we'll match that selfie image to the image on the document. So that basically saves the need for our clients' customers to go into the office with a copy of their document or email it in, which is insecure. That leads to further ramifications with our clients potentially storing an electronic image on an unsecure laptop locally, or it's sitting in their inbox. So it removes that friction and makes it much more secure.
Oliver Telfor: Perfect. So as you said, new partner Daon, a new introduction to us, a new integration to our product. For those unfamiliar with what Daon is, can we just have an introduction into what it is and how it will integrate into SmartDoc?
Geraint Rogers: Daon's an organisation focused on biometrics. They've been around for 25 years. They create biometric assurance, so they provide both authentication and identity solutions from those biometrics. At the same time, we focus in on fraud-resistant technologies. So we're always looking for those seamless onboarding, those kind of capabilities to bring a customer or user on a journey. We are looking for real surety. We're looking to evolve with all of the market trends around new identity systems, and also the fraud vectors, which are increasing in this particular area. And ultimately that multi-factor authentication and that identity capability really helps global clients make the most of their onboarding opportunity and making sure that we, alongside SmartSearch, give the best possible opportunity and most compliance and rigour as the digital world evolves.
Oliver Telfor: So this sounds exciting. This is an exciting product for AML. This is a fantastic upgrade to us as a solution from SmartSearch itself. So what immediate effects, Fraser, does this have on SmartDoc?
Fraser Mitchell: Let me just talk about, first of all, why we chose Daon as a provider. Sure. So, what we were looking for was to improve our existing SmartDoc service. We wanted to improve the user experience and make that as best in class as we possibly could. We wanted to remove as much friction from the journey as possible. So, for example, no need to download an app. So the solution can be used on any mobile device without the need for downloading an app. We wanted to underpin that automatic service with a manual review process. So it's important to us that the partner could manually review anything which failed for whatever reason through the automatic process.
We've got a big roadmap item to deliver later this year for NFC chip reading capability, which enables you to be able to read the electronic chip on a passport, a biometric passport. And we needed that provider to be able to give us that capability as well. And we also, as we grow and as our clients grow, we wanted a partner that had a proven track record of servicing larger clients and blue-chip clients so that we don't run into service issues and we can keep our high level of customer service as we continue to scale and our clients continue to scale. Overall, what we're aiming for is to improve customer satisfaction with SmartDoc and with the SmartDoc service and to increase our brand awareness within this particular space, as well as enhance our position as thought leaders in the SmartDoc or document verification world.
Oliver Telfor: Perfect. So a lot of key upgrades and a lot of upgrades within our SmartDoc there. So Fraser, thank you for that. But in terms of what that looks like for the market and where we see those upgrades coming in, is there more we can delve into that from Daon's perspective? But also how are we going to use this around AI, and how does that fit in?
Geraint Rogers: So I mean, the world of AI is changing massively, right? So we're seeing generative AI creating negative threat vectors which influence how this technology works, but we're already working with generative AI, good AI, in order to be able to combat that threat. So part of our ethos is we constantly evolve at the speed of fraud. So we're trying to get ahead of where those fraud vectors are going, recognise very early where the changes in mechanism are going. Think about those digital avatars, think about those deepfake AIs, whether it's a document or an individual, and making sure very critically that our data science teams are already pursuing answers to those to create a layered risk strategy. So looking at different attributes, whether it's the device, the actual camera, the bypass of the camera, whether it's liveness, whether it's document injection, all of those things layering in signals that say there is risk. And we are in a position, alongside Fraser here, to actually think about what the market needs and where it's going and actively respond very, very quickly and critically. I think extensibility, scaling, and understanding the market direction, especially around fraud threats, is really important. I'd also just flag that a lot of that then means changing identity methods as well, that will be coming in over time. And so between us, we're in a great place to actually ingest those new signals and also overlay that sort of fraud and risk defence.
Fraser Mitchell: Yeah. And just to add to that, one of the other key requirements for a new data provider was that they own a lot, if not all, of the tech themselves. That means that, as the fraud space changes, they're able either to keep up with the fraudster as they come up with new ways of bypassing or injecting deepfakes into the process, or just stay slightly ahead. But they need to be really responsive for that, and to do that, it's important that you own your own tech and you've got the right kind of data scientists around that, that Daon have.
Geraint Rogers: We've got a team which are dedicated within our organisation to understanding all the various threat directives that are coming through. And we would critically say, you know, things change rapidly, so you have to respond rapidly internally, or taking best in class from third parties if there's a short window where you have to lean on something else. But ultimately it shouldn't be the end user, it shouldn't be the end customer of SmartSearch that's suffering. We should be ahead of that.
Oliver Telfor: Perfect. I mean, we've talked about users there, so end users and users of SmartSearch. So from a user experience, what does this look like? What does this upgrade look like? How is it going to help through verification on our existing clients and our existing end users?
Fraser Mitchell: Yeah, so, I think it helps if we differentiate between our clients and their customers. So, our clients, it's important to realise there's no change to their experience. So whether they consume SmartSearch through a web browser, through a user interface, it looks exactly the same. The journey for them is exactly the same. If they're integrated, there's no need to change their API. So everything should be seamless from that perspective. From their customers' perspective, we've already touched on it, but the journey now will be much smoother. It's really intuitive in terms of the look and feel. There are things in place such as automatic capture of both the image and the document. So there's no need to physically press a button; as soon as it's in focus, it takes the image. That increases that throughput and removes some of the friction. There are really nice animated GIFs, which enhance that experience to show them what they need to do. If for whatever reason they can't work it out or they make a mistake, the feedback's real-time, it's really clear and concise as well.
All of that, and we've just come out of a pilot, what we've seen is our first-time pass rate, so the automatic pass rate, has gone to 82%, whereas previously it was at 54%. The overall pass rate has gone up another 9%. So that's going over 90% now. And so that's documents which have gone through the automatic process, for whatever reason, the technology can't actually deliver a result. So somebody physically reviews that result. That gives us that uplift, which is one of the key criteria for this partnership.
Oliver Telfor: I mean, yeah, that's perfect. It's impressive stats. So yeah.
Geraint Rogers: Just to emphasise that ultimately it's all about how that user captures something that's usable. Right? Because you're talking about that 9%. Just as an example, a lot of that is to do with, you know, user experience. So if you are capturing poor quality images, you are going to have poor quality assessment. You are not going to have, well, you're going to have more false positives as a result of that. So our duty of care is to make sure that you are empowered to strip out all of the unnecessary manual intervention that come from poor capture, and we would aspire that those figures go north of those that you've stated. So yeah.
Fraser Mitchell: I mean, and I think it's important to realise this is at the early stages of release as well, so as we fine-tune that, we'd expect that to go well above 90%. In terms of overall pass rate, the other thing I didn't mention in the journey actually, is we've got, or we utilise passive liveness check. It's a check on the selfie to make sure it's not being injected. It's not a static image, that that person is actually holding that device. So again, to remove that friction and to try and prevent fraud, there's passive liveness in play, so it detects movement and can realise that that individual is actually live and holding that device. Some systems ask that user to look up, look down, look left, look right, whatever it might be, which then enables fraudsters to mimic that. So if the fraudster is not quite sure what you're actually looking for, it's quite difficult to inject a fake into that process.
Geraint Rogers: Yeah. And what we've seen with our customers is AI systems in particular are being trained on organisations with active, sort of, authentication. So they're looking to replicate that with those sort of AI videos. The second thing that's in there is that sadly, as you grow older, things like blink as an authentication mechanism, people's eyes drop. So sometimes it's hard to actually work out whether you've got the eyes closed, the eyes not blinking or whatever else, which has an impact on, you know, the ability of some populations to go through. So the passive, not only is it a fraud mechanism, you know, better for the fraud side of things, but it's also better for customer experience and more inclusive. Exactly.
Oliver Telfor: Alright. I mean that's perfect. So, it sounds like really good products, a lot of stuff, and something that's, you know, with AI and the pace it's changing, not just our industry, but every industry, we're working towards that. But with SmartDoc, obviously it's not a standalone solution. We have lots of different solutions within our SmartSearch suite and what we offer. How does this benefit the offer?
Fraser Mitchell: It's a good question. So, a lot of what we do is electronic verification for UK individuals in particular. So that uses all three credit reference agencies in the UK, so Experian, TransUnion, and Equifax. And what we're doing there is overlaying the individual's name, address, date of birth against their credit file to determine if that person is in fact who they say they are, and if they exist. With the increase in synthetic identity, so somebody being able to create a fake consumer credit profile, SmartDoc, and the document verification process, adds an extra layer of security to that. So not only have you got your credit bureau check, you've also got a document which matches an individual's face to that document with that name and date of birth if there's a driving licence with an address as well. So that's the first part.
What we also do is a fraud check. We do a fraud check on the device itself, so on the individual themselves, to tie the email address and/or the mobile number to that individual. So that's key. So what you now know is, first of all, if you use our triple-check service, which is those three combined, you've not only verified that person electronically using the bureau data, you've verified that their passport or driving licence, for example, belonged to them, and you've tied that individual identity to that specific device using either their email address or their mobile number. So it's a fully, fully complete picture of that individual.
What we also do, with every one of our services, is a watch list check. So we use... we're checking for politically exposed people or people that are on the sanctions list or people that have been exposed to adverse media for some reason. And we're able to surface if that name exists on a particular list, give our clients the ability to see all of the underlying data around that individual and determine whether or not the client or the individual they're interacting with is on a sanctions list or is politically exposed. What we then do is monitor that individual on a daily basis. So if there's any change to circumstance for that individual, we'll alert them to it. If they're dealing with somebody on day one who's completely clean, but then is added to a sanctions list, for example, we'll alert them to that as well. So they know that they're completely comfortable and completely confident that the people they're dealing with are who they say they are and are not exposed in any way.
Oliver Telfor: And I think with the upgrade from Daon, in terms of strengthening SmartDoc's position within the market and subsequently SmartSearch's, and then the clients that we serve and then their clients as well, does this overall package basically raise the bar from what our clients can expect from us, and also what the securities that they can provide their clients as well?
Fraser Mitchell: Yeah. I think this keeps us at the forefront of this technology and this space. So, the other products I talked about were already in existence, but what the partnership with Daon is doing is elevating that. So for the reasons we've already discussed in terms of the AI, the fact that they own their own technology, they're at the forefront of innovation as well. We have a roadmap which will enable us to layer in additional services which Daon will either develop or have already developed in terms of fraud, anti-fraud mechanisms. So, we can do things, or these guys can do things such as make sure that device is in the UK for example, if that individual is saying they're in the UK. There's no VPN being used or deployed to redirect that number for example.
Oliver Telfor: Perfect. I mean, in terms of next steps and future developments with Daon, is there anything you can allude to now about what that looks like with SmartSearch and how we move this forward as well?
Geraint Rogers: Well, I guess there's plenty of opportunity that we need to make sure that fits your customer profile, right, and is in the right balance. But the type of things that I would be pointing out that you have an opportunity to consider here are things like the device stuff, you know, geo-fencing as it's called, has just been described. So, is your person onboarding from the UK or is it Vietnam? Are they using a privacy-protecting device that's obscuring their real identity? Are they coming from an IP address that's actually from a Tor, which is the onion router, which is a common practice for fraudsters? Is it coming from an IP block list, which is associated with fraud? All of those type of things. And the mixture of signals can help.
Secondarily, there's a whole pile of opportunity around what we describe as watch lists, so faces that have been repeatedly associated with bad outcomes, whether that's fraud or maybe the face has been seen with multiple personalities, or it's been seen 20 times in a particular period, or combining it with the device information, you could see that that face and that device has been used across a network multiple times. All of those things start to layer in all of those additional signals that may enhance the surety that you have. There's also the document watch list side of things. So the face on the document, so you see a face on the document that's got a changed name on the document, and you see that repeatedly and a whole series of other vectors that can create real enhanced opportunity for trust.
Fraser Mitchell: Okay. Yeah. And I think generally the direction of travel within the ID and V space is moving more and more to mobile device. Correct. Our clients want their customers to onboard themselves effectively and go through that process. So anything we can do to give comfort to our customers, or our clients, sorry, the people they're sending these links to, whether it's through email, through SMS, actually own that device, that device is not being used in any cases of fraud, just gives us that additional layer of security and our clients that additional confidence.
Geraint Rogers: Yeah. And I look at the two things coming together, right? So you've got a link going out, you know that that link is going to the right person, right? Because you've done that sort of phone, email lookup, you're then making sure that the response is free from risk when the device is being used, it's moving more towards mobile and away from desktop, which has more risk associated with browsers. You're then having a real layering of identity methodologies, including data and, you know, the biometric authentication and future forms of ID as well, more electronic digital ID. And then you're blending that with all of those risk signals. You know, have we seen a fraud? Have we seen this face badly before? Are we seeing it exposed to financial crime? You know, PEP sanctions enforcements, adverse media. So the whole thing together just sounds like it's taking the pressure completely away from those compliance officers in your teams, you know, and I'd see that it's our duty to make sure that we continue to respond to those market threats, those opportunities for enhanced due diligence, and we make sure we deliver it in the right way.
Oliver Telfor: Exactly. I mean, SmartSearch, you know, we're here to empower our customers to win business through trust identities. And that definitely sounds like Daon is going to continue to provide that for us. So thanks for your time. Thanks for your time, Fraser, taking time today. If you want to hear more about SmartSearch and SmartDoc and any of our other products, head to smartsearch.com. You can see all the products we work with, the industries we work within, and how we can help your business. And if you want to talk to more experts like the guys I've had on today, click that 'book a demo' button or talk to one of our experts. Thank you again for this SmartSessions and see you next time.