Santander’s aspirations to be your trusted identity repository
I recently met Rod Boothby, Global Head of Identity – Digital Platform at Santander. The podcast copy of our hour-long conversation is above. An audio version of this text version is also available via the icon at the top of this story.
I’ve known Rod for about 16 years. He was both influential and helpful in understanding how to use blogging at the time. Since then, he has had a career in various business and technical development roles, including periods at Wells Fargo, Joyent and AIG. In short, he comes from a real pedigree in solving difficult problems. His background in financial services seemed like an excellent choice for Santander when they came knocking on the door. Eighteen months or so, and Santander is poised to deliver the trusted identity custody service that consumers and their providers need.
Traveling to Santander Rod was taking some risk as the general principle was that he would lead or be part of a team tasked with creating a new global platform for the digital age. It has always seemed like a big, if not impossible, undertaking to me. Rod explained how the team was built to be successful and the fundamental problem it solves:
It is difficult to move a huge organization. And it’s hard to change the way it’s marketed, especially a business that was built from an acquisition strategy because you have a lot of strongholds. But you can lead the way; you can light the path that others can take. And that’s what we’ve done. It’s a very clear path for individual countries and the global group to understand that what we are building is a true cloud platform. This is what a very agile system looks like where you can launch new applications very quickly and adapt to all incoming fintechs. This is what the bank does. But the team also created a space and an opportunity to radically solve huge global problems. And trust and truth on the internet have turned out to be the main flaws of the internet today. And what we worked out very quickly. And the data backs it up, because while people don’t always trust banks to always get them a good deal or give them the lowest rate, they trust them to protect their assets.
The dangers of digital
As the conversation continued, we quickly got to the heart of the identity problem. As Rod explained, you walk up to a service desk in the analog world and show the supplier a piece of paper, usually with your photo attached, that is from a trusted source, often the government, and you’re good to go. from. But it’s an expensive process for everyone involved. There has to be a better way in the digital world, but it’s also a challenge because your digital identity is split into many different pieces.
The fragmentary nature of what constitutes a digital identity makes it easy enough for fraudsters to collect information about individuals to establish an identity that they can use to scam you and your suppliers in a number of ways. This presents risks on both sides of a transaction.
As the team explored Santander’s potential to act as a trusted custodian, they discovered that there are a myriad of ways digital technology offers pieces of the puzzle. He explained, for example, that in some countries a photo of your hand and face can be used to create a biometric measurement of your heart rate, which in turn can be used to identify you. But again, this is only part of the puzzle. Taking this concept further, Rod suggested that because Twitter uses a blue check mark to indicate that someone is recognized as verified, the bank can use the many ways they can verify you and perhaps attach a similar verification mark. . As the person who pays, you want to know that the person you are paying is who they say they are too. Rod told a horror story of how a friend of his was tricked into paying a substantial sum of money which literally disappeared. ROd explained that it’s not just the consumer who gets scammed:
Large companies are constantly receiving bogus invoices; it is a real problem and more and more difficult to distinguish from the real thing. Receiving through a trust mechanism – like the bank – could be a vital addition to a fraud prevention team’s arsenal of weapons.
We’ve seen consultants send invoices with wire transfer instructions in Word documents as if the emails can’t be hacked, and no one is going to edit the Word document and put in new payment instructions. Turns out SWIFT and all that other stuff when you wire money, it’s blind on the other end. So it is easy to commit a simple fraud.
We then discussed the false positive curse when a bank repeatedly calls customers for fraud investigations. It happened to me, and eventually I changed banks. It was too tiring. Turns out, it’s a prime way for scammers to find out more information about you and your spending habits as they put together profiles of people they consider vulnerable. Rod said that:
People don’t realize how much data is available and held by Google and Facebook around the world. You can ask them and they will tell you. But would you trust these services as the gatekeepers of your identity. Of course not. The mission of technology companies is to monetize data, your data. Banks are on a mission to monetize your privacy.
And it is already working in some parts of the world.
In the Nordic countries, you can get a mortgage approved within minutes. They already have identity systems that allow them to build services around identity management such as this type of transaction. We want to take this idea to the world.
The way Santander works in this area gives the user full control over what is shared. In some situations, such as applying for a mortgage, the mortgagor will likely need a lot of information about a person to determine their risk profile. As a mortgagee, I will allow access to various types of data, some of which is held by my bank and others controlled by third parties. In this case, Santander wants to be the trusted custodian of all the required data. As a customer, we hope you will view us as that trusted supplier. In turn, the bank can generate income by providing this service, but at a fraction of the cost in money and time.
Open source matters
It sounds good in theory, but how does this idea work in practice? There are three legs to this problem:
- Santander has partnered with the open source OpenID foundation.
- Santander determined that what they were developing should be an open source standard, freely available to everyone.
- They defend the idea with other banks.
We went to PayPal and eBay who like the idea but said for it to work everyone has to use the standard. eBay wants both people (buyer and seller) to be verified and have a seal of trust.
This encouraged Santander to start talking to other banks. He contacted the Institute of International Finance, which gave him access to other larger financial institutions. Santander has agreements with several in the UK and others. This is only the beginning, but Rod believes that the combined influence of these institutions improves the chances of success.
The potential is huge with benefits in terms of cost reduction and convenience. Rod gave the example of British Airways:
Today BA scans your passport several times before you fly from London to New York. Why? Because they’re charged $ 50,000 by ICE in New York if they drop off someone who isn’t legally allowed to be in the United States. Besides, they have to bring them back. So they want to transfer the risk. They want someone else to confirm that this person is who they say they are, that they have a valid passport, that they have the correct entry visa, and soon, probably, that they have a vaccine. COVID-19 in progress. And if they can’t confirm all of these things, BA pays. The airline will pay a small fee to have someone else do it for them. They no longer need the staff to check all of this. They no longer have to take the risk. It is therefore to take out insurance. And transferring the risk from the dependent party to the bank means we can take the risk or we can fire it. This is why insurance companies are all interested.
But that’s just one of many examples McKinsey looked at to answer what a solution to the identity problem could do for the global economy. McKinsey says that in advanced economies, this will increase GDP by three percent. And that will increase GDP by six percent in developing countries. It is a huge value returning to the global economy. Looked at in these terms, it’s no surprise that Santander wants to be seen as a top player.
None of this happens without management sponsorship and Rod here credits Santander executive chairman Ana Botin, who recently said the following on LinkedIn:
Together with The OpenID Foundation, Institute of International Finance, IBM and Soft, among other things, we encourage developers around the world to help us innovate in the way data is shared, verified and trusted.
As digitization spreads across the world, our expectations have grown considerably higher: we will only use products and services that provide a great customer experience without compromising our privacy and online security.
Building digital trust is now more urgent than ever. Despite two decades of technological and digital advancements, everyone still needs some form of physical identification and we still need to create a surefire way to identify ourselves online. Digital trust will not only help us serve our customers better, but also make society more inclusive.
Join us until December 10 and share your ideas at the “Santander Digital Trust Hackathon”: https://lnkd.in/eqcMmf4
You don’t get much stronger support than that and I would highly recommend aspiring developers to check out the competition. There is real money on the table.
When I first met Rod in his current role, I wondered if he was chewing on something that so many people had missed in the past. Getting to this point in such a short time is an incredible achievement that everyone should pay attention to. The positive impact that the trusted identity could have on many aspects of our global digital life is beyond the scale of anything I have seen in recent years.
It’s a topic that has largely gone unnoticed in the wider tech world, but as many businesses and organizations respond to the pandemic with digital initiatives, identity is now part of the burning platform issue. Santander’s position couldn’t be better for both making a positive impact in the world while enjoying their work. Why? Because the trusted identity is the basis of a platform from which many services can be built.