By Arta Sylejmani, Digital Banking Strategy at Gemalto
Living in the digital age impacts almost all areas of our lives. So much so, that we’ve inadvertently created multiple online identities, in sharing logins, passwords and private information, for all the services we use. In many ways this has exposed one of the last remaining frontiers of the ‘analog’ world – in how we verify who we are.
Across Europe and beyond, we are still for the most part, reliant upon paper-based ID documents to authenticate our identity. Whether this is in airport security, paying taxes, applying for a loan or getting served alcohol. This creates a disconnect between the seamless and convenient nature of operating in a digital world, and the cumbersome process of proving your identity through uploading scans or sending off your paper-based ID.
To address this challenge, governments, private organisations and financial institutions are exploring digital identities. Digital identities include unique, verifiable information about an individual including biometric, biographic and behavioural data. This data can be verified remotely over digital channels, and in turn, unlock access to banking, government benefits, healthcare, education and other ID dependent services. Digital identities can be issued through a national or local government or even a third party, and use a combination of biometric data, passwords and smart devices to confirm your identity.
Let’s explore just how much value the onset of digital identities can create for both individual citizens and the industries deploying them.
Recognising the wider economic benefits
According to a recent McKinsey report, digital identities could unlock an economic value equivalent of 3 to 13 percent of GDP by 2030. While this is of course dependent upon significant levels of usage, there is nothing to suggest that these estimates are not reachable. With the correct infrastructure, digital IDs can provide a flexible, robust solution that can be used in a variety of industries.
The most direct use-cases are in banking services with Norway and Belgium already providing tangible examples of successful mobile schemes. BankID, for instance, is used by all Norwegian banks and provides secure, verified transactions, easy online on-boarding of new customers as well as automated digital signatures for the approval of online documents and notifications. Its mobile solution is used a staggering 3.5 times per week by customers and has fundamentally changed how the public interacts with online financial services.
Similarly, Belgium’s Itsme mobile solution has been supported by four leading Belgium banks and three of the country’s biggest telecoms operators. Thanks to its ease of use, security and flexibility, it attracted more than 350,000 users in its first year of operation. And now, as it eclipses two years in existence, it is reaching the one million customer milestone.
Bringing security, convenience and financial inclusion to individuals
Digital identities can also bring great economic benefits by driving financial inclusion. According to the World Bank’s ID4D database, there are approximately 1billion individuals without a legal form of identification, and just under 3.5billion with some form of ID but no recognisable digital trail. This means that over half of the world’s population is either unable or has no means to access critical online services and participate in the digital economy. For those in this bracket, the result is often societal marginalisation as they are unable to enjoy the same security and convenience benefits afforded by the connected world.
Digital identities provide a robust solution to this problem. They can create economic and social value for excluded communities by providing secure, yet flexible access to previously unattainable goods and services. Unlike paper-based ID documents, they are under the protection of a third-party, usually a bank, and can be used to unlock digital benefits in real-time.
Importantly, third parties, such as banks or government services, can use an individual’s digital ID to streamline access to public services and drive service innovation across the private sector. In this scenario, digital identities can be used by authorised government or banking institutions to verify ID requests without having to disclose the individual’s personal data. As the process is automated, individuals can benefit from instant access to financial services, improved passage to employment, streamlined government services and significant savings in time and effort. In real-world use cases, this translates as secure digital payments, digital tax filing, online voting, automatic school enrolment, automated background verification and efficient payroll services.
Using digital identities beyond banking and public services
However, it’s not just in banking and public services that digital IDs are primed for deployment. In travel and agriculture, electronic identity authentication has an opportunity to make significant progress.
Starting with travel and tourism, the sector is under increased pressure because of the growing number of travellers; this compounds risk and security requirements as well as infrastructure capacity limits. These pressures hinder a secure and seamless cross-border traveller journey and cause various pain points for governments, businesses and travellers. The integration of digital identities into the passenger experience could enable governments, in partnership with industry leaders and organisations, to conduct pre-vetting risk assessment and security procedures to enhance the seamless flow of travellers through borders. Security officials can then redirect attention and resources to identifying threats, as opposed to passenger processing, making the entire experience much safer and convenient.
While in agriculture, digital identities can boost financial inclusion and support supply-chain traceability and delivery of goods. For example, a comprehensive, government recognised digital ID service can help smallholder farmers formally register land and livestock, protect their assets, and access mobile, financial, and other services that allow them to work, sell and spend income formally.
Growing demand for ethical and organic produce has meant that smallholder farmers are increasingly asked to disclose the origin of their produce, especially when attempting to enter larger markets. This level of traceability relies on the ability to track produce back to a single farm of origin. In the case of smallholder farmers, this often means tracing back to a single farmer, which can be greatly supported by the use of a unique ID.
Achievable only through trust
Clearly, the value that digital identities can bring to both individuals and industries could fundamentally improve how society interacts through digital. Yet, these benefits are only achievable if it is built upon a trusted ecosystem containing all digital identity participants. It’s critical that whoever controls the verifiable data, be it banks, telco providers, government services or institutions, adopts secure yet scalable infrastructure solutions to protect the information as it travels from one party to the next.
This infrastructure requires the creation of a ‘trust loop’; the process of continuous service enrolment, application, authentication and approval that creates a loop of trust between the consumer, the service provider and other third parties. To work, this needs to be underpinned by the most advanced digital and biometric authentication technology to ensure all parties involved can trust the data that’s being shared. Without trust, the ecosystem will crumble and the digital identity opportunity ahead of us will never materialise.
‘Spooky’ AI tool brings dead relatives’ photos to life
By Umberto Bacchi
(Thomson Reuters Foundation) – Like the animated paintings that adorn the walls of Harry Potter’s school, a new online tool promises to bring portraits of dead relatives to life, stirring debate about the use of technology to impersonate people.
Genealogy company MyHeritage launched its “Deep Nostalgia” feature earlier this week, allowing users to turn stills into short videos showing the person in the photograph smiling, winking and nodding.
“Seeing our beloved ancestors’ faces come to life … lets us imagine how they might have been in reality, and provides a profound new way of connecting to our family history,” MyHeritage founder Gilad Japhet said in a statement.
Developed with Israeli computer vision firm D-ID, Deep Nostalgia uses deep learning algorithms to animate images with facial expressions that were based on those of MyHeritage employees.
Some of the company’s users took to Twitter on Friday to share the animated images of their deceased relatives, as well as moving depictions of historical figures, including Albert Einstein and Ancient Egypt’s lost Queen Nefertiti.
“Takes my breath away. This is my grandfather who died when I was eight. @MyHeritage brought him back to life. Absolutely crazy,” wrote Twitter user Jenny Hawran.
While most expressed amazement, others described the feature as “spooky” and said it raised ethical questions. “The photos are enough. The dead have no say in this,” tweeted user Erica Cervini.
From chatbots to virtual reality, the tool is the latest innovation seeking to bring the dead to life through technology.
Last year U.S. rapper Kanye West famously gifted his wife Kim Kardashian a hologram of her late father congratulating her on her birthday and on marrying “the most, most, most, most, most genius man in the whole world”.
‘ANIMATING THE PAST’
The trend has opened up all sorts of ethical and legal questions, particularly around consent and the opportunity to blur reality by recreating a virtual doppelganger of the living.
Elaine Kasket a psychology professor at the University of Wolverhampton in Britain who authored a book on the “digital afterlife”, said that while Deep Nostalgia was not necessarily “problematic”, it sat “at the top of a slippery slope”.
“When people start overwriting history or sort of animating the past … You wonder where that ends up,” she said.
MyHeritage acknowledges on its website that the technology can be “a bit uncanny” and its use “controversial”, but said steps have been taken to prevent abuses.
“The Deep Nostalgia feature includes hard-coded animations that are intentionally without any speech and therefore cannot be used to fake any content or deliver any message,” MyHeritage public relations director Rafi Mendelsohn said in a statement.
Yet, images alone can convey meaning, said Faheem Hussain, a clinical assistant professor at Arizona State University’s School for the Future of Innovation in Society.
“Imagine somebody took a picture of the Last Supper and Judas is now winking at Mary Magdalene – what kind of implications that can have,” Hussain told the Thomson Reuters Foundation by phone.
Similarly, Artificial Intelligence (AI) animations could be use to make someone appear as though they were doing things they might not be happy about, such as rolling their eyes or smiling at a funeral, he added.
Mendelsohn of MyHeritage said using photos of a living person without their consent was a breach of the company’s terms and conditions, adding that videos were clearly marked with AI symbols to differentiate them from authentic recordings.
“It is our ethical responsibility to mark such synthetic videos clearly and differentiate them from real videos,” he said.
(Reporting by Umberto Bacchi @UmbertoBacchi in Milan; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
Does your institution have operational resilience? Testing cyber resilience may be a good way to find out
By Callum Roxan, Head of Threat Intelligence, F-Secure
If ever 2020 had a lesson, it was that no organization can possibly prepare for every conceivable outcome. Yet building one particular skill will make any crisis easier to handle: operational resilience.
Many financial institutions have already devoted resources to building operational resilience. Unfortunately, this often takes what Miles Celic, Chief Executive Officer of TheCityUK, calls a “near death” experience for this conversion to occur. “Recent years have seen a number of cases of loss of reputation, reduced enterprise value and senior executive casualties from operational incidents that have been badly handled,” he wrote.
But it need not take a disaster to learn this vital lesson.
“Operational resilience means not only planning around specific, identified risks,” Charlotte Gerken, the executive director of the Bank of England, said in a 2017 speech on operational resilience. “We want firms to plan on the assumption that any part of their infrastructure could be impacted, whatever the reason.” Gerken noted that firms that had successfully achieved a level of resilience that survives a crisis had established the necessary mechanisms to bring the business together to respond where and when risks materialised, no matter why or how.
We’ll talk about the bit we know best here; by testing for cyber resilience, a company can do more than prepare for the worst sort of attacks it may face. This process can help any business get a clearer view of how it operates, and how well it is prepared for all kinds of surprises.
Assumptions and the mechanisms they should produce are the best way to prepare for the unknown. But, as the boxer Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” The aim of cyber resilience is to build an effective security posture that survives that first punch, and the several that are likely to follow. So how can an institution be confident that they’ve achieved genuine operational resilience?
This requires an organization to honestly assess itself through the motto inscribed at the front of the Temple of Delphi: “Know thyself.” And when it comes to cyber security, there is a way for an organization to test just how thoroughly it comprehends its own strengths and weaknesses.
The Bank of England was the first central bank to help develop the framework for institutions to test the integrity of their systems. CBEST is made up of controlled, bespoke, intelligence-led cyber security tests that replicate behaviours of those threat actors, and often have unforeseen or secondary benefits. Gerken notes that the “firms that did best in the testing tended to be those that really understood their organisations. They understood their own needs, strengths and weaknesses, and reflected this in the way they built resilience.”
In short, testing cyber resilience can provide clear insight into an institution’s operational resilience in general.
Gaining that specific knowledge without a “near-death” experience is obviously a significant win for any establishment. And testing for operational resilience throughout the industry can provide some reminders of the steps every organization should take so that testing provides unique insists about their institution, and not just a checklist of cyber defence basics.
The IIF/McKinsey Cyber Resilience Survey of the financial services industry released in March lasy year provided six sets of immediate actions that institutions could take to improve their cyber security posture. The toplines of these recommendations were:
- Do the basics, patch your vulnerabilities.
- Review your cloud architecture and security capabilities.
- Reduce your supply chain risk.
- Practice your incident response and recovery capabilities.
- Set aside a specific cyber security budget and prioritise it
- Build a skilled talent pool and optimize resources through automation.
But let’s be honest: If simply reading a solid list of recommendations created cyber resilience, cyber criminals would be out of business. Unfortunately, cyber crime as a business is booming and threat actors targeting essential financial institutions through cyber attacks are likely earning billions in the trillion dollar industry of financial crime.A list can’t reveal an institution’s unique weaknesses, those security failings and chokepoints that could shudder operations, not just during a successful cyber attack but during various other crises that challenge their operations. And the failings that lead to flaws in an institution’s cyber defence likely reverberate throughout the organization as liabilities that other crises would likely expose.
The best way to get a sense of operational resilience will always be to simulate the worst that attackers can summon. That’s why the time to test yourself is now, before someone else does.
Thomson Reuters to stress AI, machine learning in a post-pandemic world
By Kenneth Li and Nick Zieminski
NEW YORK (Reuters) – Thomson Reuters Corp will streamline technology, close offices and rely more on machines to prepare for a post-pandemic world, the news and information group said on Tuesday, as it reported higher sales and operating profit.
The Toronto-headquartered company will spend $500 million to $600 million over two years to burnish its technology credentials, investing in AI and machine learning to get data faster to professional customers increasingly working from home during the coronavirus crisis.
It will transition from a content provider to a content-driven technology company, and from a holding company to an operational structure.
Thomson Reuters’ New York- and Toronto-listed shares each gained more than 8%.
It aims to cut annual operating expenses by $600 million through eliminating duplicate functions, modernizing and consolidating technology, as well as through attrition and shrinking its real estate footprint. Layoffs are not a focus of the cost cuts and there are no current plans to divest assets as part of this plan, the company said.
“We look at the changing behaviors as a result of COVID … on professionals working from home working remotely being much more reliant on 24-7, digital always-on, sort of real-time always available information, served through software and powered by AI and ML (machine learning),” Chief Executive Steve Hasker said in an interview.
Sales growth is forecast to accelerate in each of the next three years compared with 1.3% reported sales growth for 2020, the company said in its earnings release.
Thomson Reuters, which owns Reuters News, said revenues rose 2% to $1.62 billion, while its operating profit jumped more than 300% to $956 million, reflecting the sale of an investment and other items.
Its three main divisions, Legal Professionals, Tax & Accounting Professionals, and Corporates, all showed higher organic quarterly sales and adjusted profit. As part of the two-year change program, the corporate, legal and tax side will operate more as one customer-facing entity.
Adjusted earnings per share of 54 cents were ahead of the 46 cents expected, based on data from Refinitiv.
The company raised its annual dividend by 10 cents to $1.62 per share.
The Reuters News business showed lower revenue in the fourth quarter. In January, Stephen J. Adler, Reuters’ editor-in-chief for the past decade, said he would retire in April from the world’s largest international news provider.
Thomson Reuters also said its stake in The London Stock Exchange is now worth about $11.2 billion.
The LSE last month completed its $27-billion takeover of data and analytics business Refinitiv, 45%-owned by Thomson Reuters.
(Reporting by Ken Li, writing by Nick Zieminski in New York, editing by Louise Heavens and Jane Merriman)
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