November 3, 2015
Headquartered in San Diego, CA, Mitek is a leading innovator of mobile capture and identity solutions for customer acquisition. Mitek’s mobile photo technology enables consumers to use the camera as a keyboard to reduce friction for mobile check deposits, account opening, insurance quoting, payments and ID document authentication. In June 2015, Mitek acquired IDchecker, a global provider of cloud-based identity document verification and facial recognition solutions. The acquisition broadens Mitek’s global presence, expands document coverage to more than 3,500 document types and adds international customers in payments, financial services & information services.
The LTP team had the pleasure of meeting Sarah Clark, VP of Product at Mitek, at the Money20/20 2015 conference in Las Vegas and were shown a demo of the company’s instant ID document verification solution, Photo Verify, as well as the company’s facial recognition capabilities which will be available next year. These two factors of authentication help businesses optimize mobile channels for customer acquisition and payments while mitigating risk.
With Photo Verify and facial recognition, businesses can quickly and easily verify that a mobile user’s identity document is authentic and that they are the person pictured on that document, said Michael Hagen, Managing Director and Corporate ID Strategist at Mitek.
Presenting the demo to LTP, Mitek's team talked about the capabilities of the solution. Sarah said
Many companies are now onboarding users for financial accounts/services digitally. Mobile has been booming in the past few years; the volume of inbound applications coming from mobile has tripled or even quadrupled. Moreover, there is a market problem with reliable secure identity verification of the person on the other side of the device. Therefore, we have a unique product where we can instantly scan the driver’s license of the user who is holding the mobile device, and our product Photo Verify can instantly detect if the driver's license is authentic. We bridge that physical-to-digital channel.
There are other market players in the space of identity verification, but Mitek claims the leading position with the technology that allows reading the enhanced security features of the license. Mitek's team explained to LTP how the solution works on the license sample:
If you look at this license, you can see that it has a hologram as does a real license. US licenses have a variety of security feature and many of them are visible. However, there’s one feature that is an enhanced security feature, which is actually not visible to the naked eye. It's embedded in the format of the license and it uses encrypted data. The solution Mitek provides allows reading encrypted data and verifying if the document is authentic.
It’s (the enhanced security feature) invisible to the naked eye, it’s encrypted and it takes advanced computer vision to scan for it and to be able to read it. When you do that, you know without any doubt that the license is authentic. That is what our Photo Verify Advanced product does, Sarah said.
Mitek's solution is not limited to drivers' licenses. The company is a leader in the remote check deposit technology with nearly a 100% market share.
There have been companies who have tried to provide the same kind of technology, but there are no companies in the market with in-live deployment other than Mitek, Sarah added.
Sharing the company's experience and the issues related to mobile check deposit with the LTP team, Sarah added, Mobile deposits depend on technology. When you take a picture of your check, it instantly reads some of the data off the check. If it cannot read the string of numbers across the bottom because a signature hooked into them, then it may be one of the reasons the process can fail. Mobile deposit is a pretty amazingly bulletproof product.We have a lot of experience with it. Many banks our now using our touch-free auto capture which makes it nearly impossible to fail due to image quality One of the last remaining reasons, which, of course, no software product can control, is if somebody does hook their signature into the key numbers that the deposit process relies on; it would take a human to look at that.
Mitek has an extensive network of clients; it works with 4,100 financial institutions that have integrated the mobile deposit products reaching more than 50 million end-users. Banks being the primary customers, the company's solution is applicable for other institutions as well, such as brokerage firms, alternative financial institutions, mobile-first banks, credit unions, insurance companies, etc.
Expanding the use cases, Sarah said, In addition, you have companies who take checks as payments. That has been an area where mobile deposits have recently been growing—for example, a major wine distributor. Their employees who are delivering wine to restaurants will take a payment from the restaurant for the shipment. It is a form of mobile payment. They take a check and they makea mobile to deposit it to their corporate account. We see the biggest growth coming from the business space because businesses get more checks than consumers do. Instead of a driver taking a check and sticking it into an envelope, they just initiate a mobile deposit right there; it moves much quicker and speeds up overall cash flow. It can give a customer immediate credit so that they can buy more on the spot.
The demo presented to the LTP team left no questions on the effectiveness of the solution. What brought Mitek's solution to that level is a crucial partnership with the company that prints the vast majority of the licenses and IDs in the US. Mitek has an access to understanding the algorithm of looking for the enhanced security feature.
While sharing the unique features of the solution, Mitek's team explained and demonstrated how the technology works with auto-capture:
You hover over it and it automatically captures the check. This is the same auto-capture experience that is used and approved by four out of five banks. We have augmented that with our technology to adjust to what we need to scan, which is a driver's license. The first thing we do is scan the barcode on the back; it then finds and picks it up quickly. This is the MiSnap experience. It then scans the back of the license. It<MiSnap> performs a lot of science to evaluate the image quality and determined that image quality is good enough to capture the image. It also, in real time, scanned the format of that image for the presence of the enhanced security feature. Even though it is not visible, the computer vision found it. Then it decrypted the enhanced security feature and determined that it's completely valid. It also reads all the data. Therefore, if I am a financial institution and I know that the person holding this device is holding an authentic Texas license, I can proceed to a high-risk transaction with a lot of confidence, that the person on the other end of the device is who they say that they are.
OCR is the technology that enables the solution to read and validate the documents. Sarah specified, Licenses are designed to make it hard to OCR the data. It is not easy in a regular context and it is very difficult with licenses because of all the stuff they put into the format and the reflective material they are produced with.
To demonstrate the capabilities of the product to recognize fixed license, Sarah put another image in the sample license and proved that the solution is tamper-proof. The demo indicated that the integrity of the document was compromised, and it could be instantly rejected . Fraudsters have become adept at fixing and putting their pictures on someone’s license. However, Sarah specified that because of the way the enhanced security feature works, it is one of the differentiators and strengths of our product. It can tell instantly without any question.
Mitek’s solution is focused on the driver's license verification. However, according to Mitek, it is certainly possible to overlay this technology with remote check deposit as well. Elaborating on the idea, Sarah added, They both leverage the MiSnap auto-captures user experience. That is what the banks use to capture the check. In terms of enabling another step in user experience, it is straightforward for our bank customers to do. It is an area we want to explore more. Certainly, if the banks see value in checking the license before the deposit is received, it is entirely possible for them to do that.
Mitek’s solution could be applied in a variety of ways. However, the company sees two primary applications as their target. Sarah shared those applications with the LTP team:
The first is customer acquisition: a customer applying for a bank account, a credit card, loan, etc. It is important to know who that person is. Traditionally, that depends on a user typing their data, and then, it is bounced off bureau data that largely requires you to have banking history. There is a gap between users whose identity you can verify through traditional means, and this a great way to do that through that gap. Last year, there were 783 data breaches. Identity verification that depends on your data or knowledge is less secure than it used to be. We think this plays a role in terms of all applications.
The second application is high-risk transactions. A mobile-wallet has a few ways to use it. One way is if you are provisioning a credit card to be used freely through the mobile wallet, the card issuer needs to be sure that you are the person on that card. It is a way to strengthen the security of the card issuer.
Another use case is if you reach a certain threshold with respect to transacting as a merchant, or just moving money around in general, it can sometimes hit some KYC needs. In addition—just for the interest of the peer-to-peer network or a merchant-based network—in providing a secure place to transact, you want to be sure that you verified the identities of those who are transacting, especially in high value transactions.
Mitek also shared with the LTP team plans for 2016 to explore another layer of verification—biometric. The company is demonstrating the FaceLink technology for the first time at Money20/20 and LTP had an opportunity to see the demo before everyone could.
The driver’s license is the basic bridge between the digital and physical. Mitek has the technology that enables the end-user to capture a selfie, which is then compared to the driver’s license. Sarah demonstrated how the added biometric verification works on her driver’s license. The FaceLink technology performs the face capture and liveliness check. When a person lines the face up, the facial comparison technology has the ability to perform comparison as accurate as possible. Sarah demonstrated how her blinking allowed the technology to approve that the person is alive and verify that the person in front is the same person on the license.
The facial recognition technology is already implemented in the financial services industry with successful examples of USAA, Wells Fargo and Master Card piloting the technology. There are examples that show it’s viable and reliable enough. Those are all authentication; we are doing a different type of use case. You are a known customer, you are registering your face and then authenticating. What we are solving is harder because, in our case, you are not a known customer. We are trying to verify that you are who you say you are. That is why we need to verify the physical bridge to you, which is the identity document, added Sarah.
Certainly, authenticating IDs with reliable and secure technology is better than the human eye. Mitek provides a solution that prevents people coming in with fake IDs. It is surprising how bold people can be. It is a real concern, concluded Sarah. Photo Verify is the solution that solves this issue. There are more applications and use cases for Mitek's Photo Verify solution, and the company is open to learning about them. Mitek is on its way to explore the large market beyond banking for this type of product.