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Tuesday, July 23, 2024

Trust Stamp Provides Identity Verification Tools to Help Financial Institutions Fight Fraud and Protect Consumers

Trust Stamp Helps Financial Institutions Prevent Fraud
Andrew Allen

Written by: Andrew Allen

Andrew Allen
Andrew Allen

For nearly 20 years, Andrew has worked for financial institutions ranging from regional investment organizations to some of the largest banks in the world. At Wells Fargo, Andrew was a Consultant within the Insight and Innovation division. A graduate of the University of Georgia’s Terry College of Business, Andrew’s goal has been promoting personal financial wellness and solid money decisions. As a Staff Writer for CardRates, Andrew seeks to inform readers of solutions to help them on their path to financial freedom.

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Edited by: Lillian Guevara-Castro

Lillian Guevara-Castro
Lillian Guevara-Castro

Lillian Guevara-Castro brings more than 30 years of editing and journalism experience to the CardRates team. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct journalism instructor at the University of Florida. Today, Lillian edits all CardRates content for clarity, accuracy, and reader engagement.

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In a Nutshell: Businesses and consumers both require security when transacting online. Trust Stamp offers solutions that help financial institutions verify the identities of new and long-term customers. Its identity verification and duplicate detection tools help financial institutions block criminals from committing fraud. Trust Stamp also serves fintechs and industries outside the financial sector.

Online security has undergone numerous enhancements over the years as technological innovations allow for more convenient and secure solutions. In the past, individuals could access their online accounts by using login credentials that consisted of a unique identification name and password.

As the online underworld developed techniques to hack accounts solely protected by manually entered identification names and passwords, businesses built solutions such as multifactor authentication tools and biometric capture technology.

Trust Stamp provides digital identity solutions that employ biometrics and maintain privacy standards for all parties involved in a digital interaction. We spoke with Kinny Chan, Trust Stamp’s Chief Commercial Officer, to learn more about the company’s innovative solutions that help businesses and consumers maintain privacy and security.

Trust Stamp logo

Trust Stamp helps enterprises use facial recognition technology in a way that preserves the end user’s privacy. Chan said the company’s Stable IT2 technology allows Trust Stamp to enable facial recognition without storing biometric measurements. Businesses can use biometrics without first having to store them on Trust Stamp’s servers.

Hackers who successfully access a company’s private data can steal sensitive information about its customers. Chan said hackers can steal more than just a consumer’s credit card number or login credentials — they can steal someone’s biometric information. 

People can ask their credit card issuers to change their credit card numbers, and they can reset the passwords they use to access online accounts. But people can’t change their biometric measurements in a similar fashion, which makes protecting biometric measurements essential to a consumer’s online security.

Chan said Stable IT2 use cases include securing a digital wallet and using blockchain to secure digital assets.

“Now there is a way to verify that a digital asset is actually owned by someone,” Chan said. “You can essentially store parts of your stable string on the blockchain or cloud. That way, you can actually authenticate without having to show your face or biometric template to a third party. That’s where the benefit of Stable IT2 will come in. It opens up new use cases where privacy is now first.”

Helping Businesses Know Their Customers

Most people don’t mind if a friend or family member posts details online about where they had dinner last night or how they spent their birthday. But they likely would feel differently if someone posted their financial information. Chan said the financial services industry was the first industry Trust Stamp served when it started, and it remains the company’s core market.

One of the primary tools Trust Stamp offers financial services companies is its identity verification solutions, which allow individuals to use selfies to prove their identities. Chan said Trust Stamp serves credit card issuers that use the company’s identity verification tools to authenticate their customers. 

Trust Stamp can tokenize selfies and then search for that same token running across other transactions using different names, which can indicate an instance of synthetic identity fraud.

Trust Stamp liveness detection capabilities
Trust Stamps helps businesses verify selfies.

“Our duplicate detection solution catches when someone is using someone else’s selfie as their own to open new accounts under someone else’s identity,” Chan said. “It’s a way for our clients to identify fraud quickly. It’s one of the most significant products of its kind out there.”

Companies that serve a customer over a relatively long period of time can become accustomed to the types of transactions they perform and notice when their actions aren’t consistent with past behaviors. But companies may struggle to identify inconsistent behaviors in new customers because they don’t have an in-house record of their past activity with the company.

“Financial services companies use our identity verification and duplicate detection services to make sure that any clients they are working with aren’t fraudsters,” Chan said. “These are the two main services we provide to financial services institutions.”

Strengthening Clients’ Ability to Manage Risk  

Tokens enable an enterprise to identify a customer during their first interaction with a business and each subsequent transaction they engage in with the company. Chan said Trust Stamp’s focus on privacy differentiates the company from its competitors.

He said Trust Stamp is unique because it is happy to offer its tokenization services to other providers that help companies verify their customers’ identities. Trust Stamp is pleased to work with clients who want to layer on another provider’s facial recognition or liveness algorithms.

Kinny Chan
Kinny Chan is Trust Stamp’s Chief Commercial Officer.

Trust Stamp’s services can help large banks that issue credit cards to manage risk. Chan said credit card issuers using Time Stamp’s solutions can increase performance and significantly reduce fraud losses. 

Trust Stamp also works with smaller banks that may have fewer resources to verify their customers’ identities. Chan said Trust Stamp partners directly with fintechs who engage with other financial institutions, but the company also serves industries outside the financial arena.

He said Trust Stamp aims to help businesses in the travel and hospitality sector verify the identities of their customers.

“When you buy a hotel room, a lot of hotels need to know that whoever’s buying the room is the person who’s actually staying there,” Chan said. “We also partner with businesses that provide gaming services. That’s a huge industry that’s booming, and they need to know who’s accessing their accounts.”

Trust Stamp’s tools can also help companies prevent bad actors from misusing promotional offers. Chan said gaming companies use duplicate detection to prevent customers from fraudulently accessing enrollment bonuses. 

“Gaming companies often provide customers cash bonuses to open up an account with them, and they need to make sure they’re not going to abuse their bonus system and open up five more accounts,” Chan said.

Fighting Synthetic Fraud Across Industries

Chan said synthetic identity fraud is the fastest-growing form of fraud in the U.S. Instances of synthetic fraud can go unnoticed because banks may misclassify it as a credit loss. 

He said companies can prevent many instances of fraud by detecting synthetic identity fraud.

Interest rates are really high, meaning borrowing costs are high,” Chan said. “If there are a lot of purported credit losses that are actually synthetic fraud, then we need to stop that. I think we’re only going to see these sorts of credit losses increase, which will make credit that much more expensive for the average consumer.”

Smartphones employ biometric technology to prevent people other than the phone’s owner from accessing the device and its stored data. Biometrics allow a smartphone’s owner to unlock their phone without entering a password. Chan said individuals can bypass a smartphone’s facial recognition challenges if they know the phone’s password.

If someone has possession of another person’s iPhone and knows the password to their phone, then they can change the Apple ID and gain access to various accounts, he said.

“As fraudsters continue to evolve, we need other tools to combat them,” Chan said. “What Trust Stamp is providing, and a lot of other companies are providing, is a tool that’s to be used in addition to iPhone and Android biometrics. We utilize solutions that, in order for you to prove who you are, you need to present your device and your face. It’s not just one or the other — it’s both. We think that’s essential to make processes more secure.”