Season 4, Post 6: The identity arms race

“Identity is key to all human society…you can only build trust if you can identify” These were the words shared by Dr Andrew Newell, the Chief Scientific Officer of iProov over a recent lunch with your author. Dr Newell is well-placed to make such an observation since not only does he have degrees in both Philosophy and in Computational Vision, but also since the business he works for is specifically seeking to solve the problem of proving who you are online.

If you believe in our Rubicon thesis and the fact that we are becoming digital by default, then it is integral to verify that someone is who they say they are online; not just the right person, but a real person (as opposed to a bot), authenticating right now. Failure to do so can result in significant costs both to consumers and businesses. Growth in cybercrime across all vectors has become increasingly prevalent, with the cost of identity fraud in the US alone totalling over $50bn. Developing technological solutions that are robust enough to defer the increasing sophistication of cyber criminals) is like being in “an arms race”, per Dr Newell.

The founding principle behind iProov, a private UK business that has been active in the space since 2012, is to decrease friction. It’s a message with which we strongly concur and something we have heard consistently from the large, listed payment processors such as Mastercard and Visa. Put another way, what this means is making visual verification as easy as possible and as accessible to as many users. Fail to do this and you may deter adoption (such as in the case of the trialled Iris recognition systems at some airports). Dr Newell highlighted that Face ID on newer Apple iPhone models had helped legitimise the idea of visual verification, but truly successful solutions would need to work on all phone models, even those with very basic cameras. iProov’s system uses a combination of advanced machine learning, behaviour science, computer vision and cryptography. With these tools, identities stored within a secure cloud can be verified consistently.

The use cases for successful verification solutions are potentially widespread. Banks, border authorities (such as the US Department of Homeland Security) and travel businesses have all been early adopters. Healthcare is another vertical that has grown in significant, particularly given the pandemic. UK residents who are completing the onboarding process for the country’s NHS (National Health Service) app use iProov’s technology. iProov is, unsurpsingly, growing. It is hiring “bright people who want to solve real problems”, per Newell. This is a message we’ve heard elsewhere too. Have no doubt, there’s also an arms race for talent across all industries, as the future trends we regularly discuss only grow in importance.

9 February 2022

​​​​The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in Mastercard. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​  ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Alex Gunz, Fund Manager​​​​​​​​​​​

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