Mark Straub, CoFounder/CEO Smile Identity

by

Transcription

Pemo Welcome Mark. So great to speak to you again. It’s been a little while and obviously it’s virtual rather than live like last time but tell me what’s happening at Smile Identity now?

Mark Straub Thanks Pemo. It’s so great to speak with you again and it has been quite a transformative couple of years obviously for the global economy, but specifically for our business at Smile identity. So I’m excited to share an update.

Pemo Right.

Mark Straub And I think, maybe to start with, you know, just a recap on where we left the conversation. It was probably oh I think late 2019, certainly before the world changed and, you know, we were in person doing this interview in San Francisco. So you know, at the time we had this idea that basically anyone should be able to prove their identity easily, regardless of their IP address or the origin of their ID card; and that doing so was going to be critical to access, you know, all the benefits of a modern digital economy. I mean I don’t think we could have predicted, you know, any more clearly, sort of the way that the world moved towards a digital economy, in many ways digital only. And in the in the wake of the pandemic now that has completely transformed a whole number of industries and bankrupted others, we’ve seen tremendous demand and tremendous growth for digital identity solutions within our in Africa and globally; and we’ve been building rapidly across across the board from products and expansion to new ; but also building out our team, and we now actually have over forty Smilers working from 12 different countries, eight different African nations, and speaking probably at least as many languages. And our team is really divided into, of course, a Commercial organization that works with customers to find solutions and help them be successful in scaling their businesses; but also an Engineering team and a Machine Learning and Computer Vision effort. So that team is spread across Africa the United states and Europe, and we’re really excited about all the accomplishments we’ve had in the last year and a half, and also how we’ve helped everything from customers to governments to nonprofits mitigate some of the impact of the pandemic; having now to switch gears from physical infrastructure and physical distribution to mostly digital infrastructure, or remote service delivery.

Pemo Such a positive story to come out of a lot of disasters, so that’s fantastic; and just tell me, in a few sentences, exactly what Smile Identity’s strength and solution is?

Mark Straub Yeah, so at Smile Identity we provide a set of APIs and SDKs that allow any commercial organization or nonprofit to verify the identity of a user over a smartphone and we do that across the African continent. And we have ambitions to scale beyond Africa. But today we work in about half a dozen African countries. We verify ID numbers and ID documents against sources of truth, whether that is ID authorities or bank authorities, or telecom authorities; and we also combine that with a face verification solution, So we can verify that a user’s selfie matches the information on file at an associated ID authority, or the information on an ID card. And we do roughly a million verifications every month. We’re doing that across roughly half a dozen countries across Africa.

Pemo Such a valuable service and was so necessary even before the crisis. But as you said, probably even more so now because everything’s gone digital that wasn’t digital before.

Mark Straub That’s right! And even in some cases where there’s still some level of physical delivery; whether that’s schooling or whether that’s government services, to populations that are at risk we’ve been able to offer people a contactless solution, right? So you can onboard a user with a selfie without having to have people fill out paperwork or put their thumbprint down on a piece of hardware. And so that contactless solution, whether it’s self-serve or a consumer with their own smartphone, or whether it’s an agent you know visiting somebody in the field, allows us to offer solutions that work, you know, sort of regardless of the circumstances or regardless of the application.

Pemo So tell me what sort of big problems you’ve been pulled into to try and solve. I mean obviously fraud and, you know, misidentifying someone is being big. Can you tell me, like, where that sort of has helped as regards your solution?

Mark Straub Yeah, I’ll talk about a couple of examples. So one was pretty much pretty early in the onset of the pandemic. There was a large number of people from one of the state governments we work with in Nigeria. There was a large number of people who were basically seen at risk, and they were at risk because of, you know, income going away. So with the pandemic, there was a number of folks whose livelihoods were put at risk; small businesses whose businesses were put at risk.  And there was a government program to give people, essentially, income security; and to do that, they needed to do identity verification to make sure that money was going to the intended individuals. And so we worked with in one case, a state government program, and in another case, a federal government program largely administered by local companies but we were in partnership with them, providing them identity solutions on the one hand to verify faces so that the users who are getting this government benefit were in fact who they said they were, and in another case to verify bank accounts to make sure that the money that was going into bank accounts was actually going into the intended recipient’s accounts. So those were 2 programs we worked on that were kind of on the public welfare side. On the private side, you know, we saw tremendous growth of the remittances business and the the cryptocurrency business; and so we had a whole host of of customers that were seeing tremendous demand across Africa for either being able to move money, lets say, from someone in the United States or the UK to a recipient that might be in Nigeria or in Ghana. And in other cases, small businesses that wanted to be able to move their currency into crypto to protect it from currency fluctuations, or individuals who wanted to be able to move money into crypto to get it across borders and and avoid very high fx costs; and in those cases we were doing, kind of, our classic product which is basically identity verification for consumers and doing that, you know, at very high volume but doing it in a way that allowed these businesses to catch individual fraudsters who were either trying to impersonate somebody else and we would catch that with a liveness detection. Or someone who was trying to open up, let’s say, many different accounts and take advantage of some referral programs or benefit from some bonus programs. And so in one case, basically catching fraud through liveness in another case catching fraud through deduplication.

Pemo And I know people that are inclined towards being fraudsters often take advantage of very critical times, so I would imagine that when, particularly last year, when the crisis hit, and all the lockdowns happened, was there any particular, you know, fraud schemes that came up whether you were involved in them or not as far as a solution that happened that you could talk about? I’m always interested in the criminal mind. I can never work out how they work these things out or want to do them. But I’m still interested.

Mark Straub Yeah, I think one of the things we’ve tended to see is that it’s often a relatively small number of people who are perpetrating you know, sort of a large number of activities. And so I think unfortunately you know that sometimes get painted with a brush is just unfair.  I think the reputation, for example, that let’s say countries like Nigeria or other countries in Sub Saharan Africa have gotten is largely due to very specific individuals who’ve engaged in this kind of activity. So what we’ve seen just as an example of this is, we saw roughly twenty thousand frauds that happened during the relatively early part of the pandemic that were carried out by, we think it was only about 200 individuals.  So roughly twenty thousand attempts, but you know, only kind of linking back to 2 hundred people; so you can imagine that you know whether it was coordinated or mostly individuals, these were folks who were trying over and over again to get through our systems and we caught them, you know, using our deduplication engines.  And what this means is that for other companies that weren’t using our services if they were giving out loans or if they were giving out referral incentives for people to sign up for their products they’re probably, you know, they’re probably attracting a relatively small number of people who are taking advantage of their system over and over and over and over again. And so that’s one of the things that was interesting that we saw during, basically during 2020. We were able to help one of our partners catch this behavior, identify the individuals, and ultimately to report them back to the Central bank.

Pemo Wow! That’s pretty satisfying and I noticed too, just from news events that there were a lot of ransomware attacks on Hospitals which to me is insanity obviously because, especially during the crisis, they were also already under incredible pressure. Did you have any wisdom or overview on that from your seat?

Mark Straub Yeah, you’d sort of think like maybe there might be some sectors that are kind of beyond the pale right? That fraudsters wouldn’t want to attack; but I think the reality is that people are looking for the open latch. They’re looking for the easiest or weakest link to break. And so it tends to be not the organizations that have the most modern software, or even the organizations that might have the most value at risk. But it tends to be organizations that are least prepared from a security standpoint and so we’ve tended to work with very high growth companies that put an emphasis on security. They put an emphasis on protecting user data and they put an emphasis on user experience. And so you know most of the companies we work with are investing heavily in security solutions and anti-fraud solutions.  And so we’re obviously working with those companies, and unfortunately, it’s usually the organizations that have not spent or invested the money on protection that find themselves at most risk.

Pemo Yeah, and unfortunately the health sector in a lot of western countries often is very antiquated and behind and definitely probably hasn’t focused in the past on protection and security issues. 

Mark Straub Well it’s all an evolving picture right? So you know, even as we’ve built this business over the last five years we’ve seen the nature and the types of fraud change everything from people using cardboard cutouts to try to pretend that they are a picture of a human that they’re not to pictures of Barack Obama who apparently applies for loans on a regular basis! Yeah, we’ve seen everything, and I think, you know, it’s just one of these things that requires sort of an ongoing effort, and basically a learning machine.  So that is what we’ve built. We have both the volume of transactions that we’re watching to see emerging patterns, and we’ve built some pretty powerful computer vision and data duplication solutions that we’re able to put to work for our partners; and we don’t stop right? This is an ongoing effort and we get better and better. I like to say that, you know, our solutions are currently the worst that they’ll ever be. The next week and next week they’re going to get better and better and better. But it’s an arms race and we have to keep pace with the evolving nature of fraud.

Pemo Really interesting to talk to you again, Mark, and so fabulous that things are going so well because obviously there’s always been a dire need for security and safety, now particularly digitally. So I’m so pleased that your business is doing so well and continuing to grow. Thank you so much.

Mark Straub Yes, thanks so much for having me.