The new reality of identity

Start-ups and scale-ups are currently dividing up the market for identifiers on the Internet among themselves. That means more diversity.

When Gamestop stock prices skyrocketed a few weeks ago, frustration was running high among some investors. Not necessarily because they hadn't invested in the stock, but because they couldn't manage to open an account. This requires identification, which is now often done by video - and which in some cases was completely overloaded.

The reason for this was usually simply the human resource. That's because the videoidentification process requires consumers to make a video call to an agent on the other side, holding their ID document up to the camera, for example. If the counterpart can confirm that the customer is who they say they are, the account is opened. If the number of people wanting to identify themselves in this way increases rapidly, the platform operators face a problem: Where can I get agents so quickly - and what do I do when the rush subsides?

Because human resources are finite and cannot be used flexibly at will, the operators of large platforms such as WebID or IDnow and new attackers such as Solarisbank have been eyeing new methods for some time. Accordingly, the outcry in the scene was joyful when the Federal Office for Information Security (BSI), together with the Federal Network Agency, allowed automated procedures such as AI solutions to be used for identification a few days ago, even if only in certain areas.

IDnow and Solarisbank, among others, are already on the market with solutions

What sounds technical at first has relatively simple consequences: Humans are no longer needed in all cases. Instead of a video agent, users could chat with a computer in the future, for example. The computer would then use artificial intelligence to recognize and evaluate the ID documents. At the same time, a video could run along so that, in exceptional cases, humans could also check once again whether the user is actually who he or she claims to be. These new procedures are initially only permitted in certain areas of application, for example in insurance or telecommunications. Consumers will not yet be able to open bank accounts in Germany in this way. But that, too, could change in the coming months.

The Munich-based scale-up IDnow, which employs more than 300 people, has already developed such a solution under the name Auto Ident and launched it in some countries, such as the United Kingdom. The company promises that identification using artificial intelligence is just as secure as, for example, in a branch or with the conventional video ID process. It also wants to use the technology in Germany in the permitted sectors and hopes that the authorities here will also approve the procedure for opening bank accounts, for example.

Andreas Bodczek is chief executive at IDnow. (Photo: IDnow)

New competitors such as Solarisbank in Berlin are taking a different, equally automated approach. It has been offering the so-called Bankident for some time. Instead of a video chat, the customer must first enter his personal information, then log into his bank account and carry out a test transaction. He then receives an SMS TAN to create a qualified electronic signature.

At the same time, a Solarisbank partner with whom the customer wants to open his account pulls his personal information from a credit agency's database. If the data matches, an account is opened. Delia König, who oversees the product, says, "Since we don't need people to authenticate, there's virtually no capacity limit." The product, like similar ones from competitors, is also allowed for opening bank accounts and is already in use.

Since September, for example, smartphone manufacturer Samsung has been using Solarisbank's new product to authenticate customers for its in-house payment solution Samsung Pay, and other partners are waiting in the wings, König says. She does not want to say which ones for the time being. Only this much: "There are also the really significant banks, which confirms us in the assumption that our product also has good chances on the market."

The market is tending to get bigger and broader

Top dog IDnow is not afraid of new competition. CEO Andreas Bodczek sees the possibility of offering new procedures as a growing market, especially because different procedures are approved for different security levels. For example, conventional video identification is already established, along with identification via the electronic ID card and new procedures such as Bankident, in which identification takes place via an existing bank account.

In addition, there are the preferences of users. "We want to offer customers the full range of procedures. They should have the choice of which procedure they like best or is the most convenient to carry out. One person wants to use the new electronic ID card another prefers video chat and yet another values the speed of the procedure and prefers to use Auto Ident," Bodczek says.

He believes that the proportion of automated procedures will continue to rise, and that the mix of different procedures will change accordingly. Videoident will not disappear in the foreseeable future, in his view. There are enough users who don't use Bankident or prefer to talk to a human agent, he says.

IDnow has already seen a sharp increase in demand for video identification over the past year, with more and more customers using its platform to identify themselves for bank accounts, for example, especially during the lockdown. "The market is growing strongly, which means the pie for everyone is getting bigger for now, not smaller," says Andreas Bodczek.


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