In this special live webinar, The Fintech Times sat down with Trust and Safety Architect Kevin Lee alongside Lord Chris Holmes and David Birch, as they discussed the drive towards digital identification and its suggested improvements to the growing fraud economy. With a Draft Trust Framework already produced in the UK, safety and trust online are evolving conversations around the world of online payments. This webinar examined how digital ID could potentially help combat the fraud economy
To watch the webinar in full, click here
Moderator Mark Walker, Editorial Director at The Fintech Times was joined by panellists Kevin Lee, Trust & Safety Architect at Sift, Lord Chris Holmes, Member, Democracy and Digital Technologies Select Committee, UK House of Lords and David Birch, Author, Advisor & Commentator on Digital Financial Services.
The session kicked off with Kevin Lee explaining what the term “fraud economy” actually means, advising it’s to do with all the different ways that companies can be taken advantage of.
“The fraud economy has certainly grown up in the last year,” he said. “But it’s been a long road to this point. There are several key areas to fraud, the first is payment fraud, such as stolen credit cards, money laundering and fraudulent purchases.
“The other areas to focus on were one: there are a tonne of siloed teams out there which can be a challenge as a lot of these teams don’t necessarily talk to each other, certainly not as much as fraudsters do. For example, my team monitors the dark web and looks at different forums, and we know that fraudsters are quite good at collaborating and sharing. I wish that was the case internally at the companies I’ve worked at and the companies I work with today. And the last area is around tool proliferation, where if you think about the tools that are available to a company, those tools don’t necessarily talk to each other. When I look at the fraud teams that are fighting this war, they are essentially fighting a three-sided war where they’re really going up against external threats and internal challenges.”
The role of Digital ID
The conversation moved onto the idea of digital identification, and how it is a key player in the fraud economy fight. David Birch, who described himself as “obsessed” with the identity and payment space, explained to the attendees what Digital ID is and what it does, and how it is different from current identification.
He said: “It now looks like a bit of a mistake to build an internet that didn’t have some form of identity layer built into it. At the time it seemed like a great idea to have everything open and give everybody access to everything, but in practice the lack of identity has had some pretty serious consequences. The reason I’m very specific to say that we need digital ID is that we don’t want a digitised identity, we don’t want to take the old identities like passports and driving license and making electronic shadows of them, what we need to do is start constructing digital identity for the new era that we’re living in. When I say digital identity I mean something very specific, I mean that new kind of identity that’s built for the new world that we’re living in now.”
David continued to explain that there are three key characteristics he believes a digital identity should have for the new era. He said: “The first is that digital identities are smart, they know who’s asking and what information they can tell. Secondly, digital identities are connected, they can go out and get information. We have all sorts of ways now of proving things about us in order to obtain the authorisations that they need. So digital identities should be able to go out and get the data they need in order to achieve what it is you want to achieve. And the third thing is that they’re interactive. The idea is that your digital identity doesn’t just tell other people things about you, but it values what other people are telling you.”
For Lord Holmes, he explained he was interested in the digital ID space as he realised “Just how dumb documents and ID documents currently are.”
He continued to speak on the future of Digital ID, and said: “This session has made it clear it is a war. It’s possible in an instant for any of us to lose all of our savings or our identity. There’s a real opportunity for Fintech to make a success of this, any nation that really gets ahead of this has a tremendous advantage not only economically but also socially, psychological and with well-being. That’s why I’m excited and interested in digital ID. That’s why I believe everybody should be and needs to be.”
Finally, at the end of the session, the panel were asked questions from the audience, with one attendee asking “If you ruled the world, what is the first thing you’d implement to combat fraud?” David Birch took the lead on this answer, saying that he would make everyone use bitcoin. “At the moment, criminals use cash and you can’t trace it. If all criminals used bitcoin we’d be much better off because you can track, trace and monitor bitcoin that you can’t with cash and other things. So if you want to cut down on fraud, making people use bitcoin would be an excellent step forward.”
To hear more insights on this topic and to watch the webinar in full, click here.