INTERVIEW: A Deep-Dive on Jumio’s Beam Acquisition with VP Dean Nicolls

Selfie-based authentication has emerged as one of the biggest trends in anti-fraud security over the last couple of years, and Jumio has established itself as a leading vendor. The company has distinguished itself with broad industry acclaim, picking up three Cybersecurity Excellence Awards near the start of the year, and recently being named a gold winner in the 2020 IT World Awards and a Representative Vendor in Gartner’s annual Market Guide for Identity Proofing and Authentication.

It’s no wonder, then, that the company is starting to expand in a big way, with Jumio having announced its first acquisition – of AML specialist Beam Solutions – at the end of September. That big move is naturally the starting point in a new interview between Mobile ID World President Peter O’Neill and Dean Nicolls, Jumio’s Vice President of Global Marketing. Talk of the acquisition leads into some elaboration on Jumio’s new KYX Platform, and from there the discussion moves onto salient topics like the COVID-induced spike in digital fraud, patient identification in healthcare, and online education.

Read the full interview with Dean Nicolls, Vice president, Global Marketing, Jumio:

Peter O’Neill, President, Mobile ID World: Let’s start off with your latest acquisition of Beam Solutions, just recently announced. Please tell our readers about this.

Dean Nicolls, Vice President, Global Marketing, Jumio: We’re super excited. It’s actually the first acquisition Jumio’s ever done as a company. Beam Solutions is a start-up based in San Francisco who’ve really built a pretty exciting platform for AML screening and transaction monitoring. For a lot of regulated industries, whether you be in banking or in crypto or even online gambling, you typically need a solution in place to monitor transactions for potential money laundering and financial crime. So, it’s a natural fit to what we’re already doing.

Peter O’Neill: What were some of the other drivers behind this acquisition?

Dean Nicolls: There were a few. Right now we are principally playing in the identity proofing space: when people are creating accounts up front, making sure that they are who they claim to be.  While we offer some basic level of AML screening  to detect if the person creating an account is on any kind of government watch list or a politically exposed person, but we typically have not gone downstream.

Part of the reason we’re excited to acquire Beam’s AML platform is to address  three primary use cases. One is the ability to detect suspicious activity. Beam analyzes a vast amount of financial data, and they’re searching for subtle trends and abnormal activity that may suggest a pattern of money laundering. That’s the transaction monitoring part of their solution.

A second part that’s super important is all around case management and review which really focus on investigations. Beam provides a streamlined platform to investigate suspicious activity, document findings, and complete a straightforward workflow that includes submitting regulatory filings (that is SARS) all from a single interface.

And I think the third area that really stands out is that organizations really need a more comprehensive and a holistic way to look at the risk associated with each customer. That includes not only the up-front KYC-related identity proofing that we’ve been talking about, but the ongoing AML screening and transaction monitoring.

Those three areas are critical drivers to why we acquired Beam, and I think it’s pretty exciting for our customers. Many of our customers in regulated arenas – typically will have 20 to 30 different solutions – that they’re managing to handle different parts of the onboarding, compliance, fraud detection and transaction monitoring process. What we’re trying to do with our KYX platform is to bring as many of those ingredients together into one platform so that they don’t have to have 20 different point solutions. They can just use Jumio’s KYX platform to do it all from, initial identity proofing and KYC to ongoing transaction monitoring and case management.

One of the things we just launched a few weeks ago is what we call our KYX Platform, which stands for Know Your X. Whether the X be a customer, a patient, a student, or in this case even a transaction, we help organizations, specifically those in regulated industries, know who the X is.

And so, this is actually a natural fit to that storyline. With the Beam acquisition, we not only help you protect your ecosystem with our  biometric-based identity proofing, making sure that they are who they say they are, but we also help companies mitigate their exposure to financial crime and terrorist financing through cloud-based transaction monitoring and case management..

Peter O’Neill: Am I correct in thinking that combining this with your recently announced KYX Platform, makes you really an end-to-end solution?

Dean Nicolls: Yes. And to our knowledge we’re really the first solution provider that offers complete, end-to-end KYC and compliance, from initial identity proofing to ongoing transaction monitoring.

Peter O’Neill: I’ve known your company for many years, and we’ve chatted often about what’s going on in our industry, but we’re certainly seeing a significant increase in fraud around pandemic. Are you seeing the same type of thing? And how do your solutions answer some of these significant challenges we’re seeing in the market?

Dean Nicolls: Certainly, fraud has spiked up – and the types of fraud perpetrated has become more varied. We have seen significant increases in credential stuffing (that is, account takeovers) and synthetic fraud.

Money laundering itself has also increased and even though it’s hard to measure and quantify… we think it’s somewhere between an $800 billion problem and a $2 trillion problem. It’s somewhere between 2 percent to 4 percent of global GDP, which is amazing.

At the same time, we’ve seen a corresponding increase in regulatory fines associated with noncompliance. Just in the first six months of this year we’ve seen fines go from over $700 million. And compare that to the full year of 2019, where fines were $440 million. That’s a huge uptick in fines. So we are absolutely seeing upticks not only in fraud but also in regulatory fines – a double whammy for companies operated in regulated markets. .

Peter O’Neill: Where are you seeing the greatest growth? You mentioned that a lot of the industries that you work in are fairly highly regulated. The one I’m thinking of right now is healthcare, because again, with the pandemic, remote doctor calls, remote prescriptions, there’s a significant need in that marketplace, which traditionally had been lagging behind financial services anyway. But their needs are immediate right now. Are you seeing that as well?

Dean Nicolls: We do. The notion of KYX obviously has long existed in the financial services space. We’re helping to pioneer what we call KYP, which is Know Your Patient, in the health care space. And much like financial services, there’s two areas where there’s a specific need. One is around the initial up-front account creation, where we make sure that you know that person creating an account online is in fact who they say they are. Obviously the notion of people creating accounts online is pretty ubiquitous these days. Everything is being digitized.

The other part of the equation is around the tele-consult experience. If a doctor is consulting with a patient online, maybe perhaps via a Zoom call,  how do you know that the person on the other end is in fact that patient, the patient that created the original account? How can you make sure that you’re dispensing your medical guidance or potentially even prescriptions to the actual subscriber to your plan, and not someone posing as the legitimate subscriber?

Those are a couple of the areas that that we’re addressing. We got a pretty amazing response to our Go for Good program (which expires on December 31^st)  – a program that provides free identity verification services for any company that is involved on the front lines with COVID relief, and that obviously included a number of health care organizations. So we’re definitely seeing a lot of uptick in the healthcare space.

Peter O’Neill: Yes, I remember chatting with you about that. It’s been interesting to watch the healthcare industry over the past while, but now their needs are so immediate. It’s wonderful that companies like Jumio are stepping up and really starting to assist them with remote everything. What about markets like education?

Dean Nicolls: Yes, and we’ve signed a number of online universities too. Including the University of Texas and Coursera Again, there’s a couple areas where we’re playing a role there. First of all, it’s when students are creating new accounts online. I have a son who’s a senior in college, and everything obviously is now online, and this includes the curriculum, the enrollment process, and the test taking. Universities have the same kind of challenges as healthcare organizations. When students are taking people are creating accounts online, are they in fact the students that were admitted? When students are attending classes online and submitting their homework, you need to make sure they are the enrolled students. And when tests are taken, obviously, can you be sure that the person taking the test is in fact the enrolled student? We’re helping a growing number of universities, especially online universities, to get a better handle on all those problems.

Peter O’Neill: And any other markets that you’re involved in that you can tell us about?

Dean Nicolls: I think those are the primary ones. Taking it back to the Beam Solutions acquisition, what we’re seeing is a handful of industries that experienced big upticks in verification volumes during the COVID relief.

In fact, we just closed Q3 and it was our best quarter ever – and it’s been driven by a lot of these very same regulated industries and their accelerated efforts to digitally transform their operations. In financial services, it’s difficult to just walk into a branch office so more and more account openings are happening online. The whole notion of digital transformation is really propelling the need for online remote onboarding.

Gartner just published their Market Guide for Identity Proofing and Affirmation where they discussed the increased importance of document-centric identity proofing  – folks can download a copy of the report from the Jumio website. Gartner distinguishes identity proofing from identity attribution. Identity proofing is any method where you can more definitively assess someone’s online identity, and here they’re recommendation is to rely on a person’s government-issued ID along with a corroborating selfie and some liveness detection checks.

Gartner also recommend that many enterprises should probably be paired with identity attribution methods. There’s a variety of different methods for attribution, i.e. pinging a third-party database like a credit bureau, it might mean looking at attributes of the phone or the phone number, it might mean looking at behavioral biometrics – if they’re completing an online form, is it taking 0.3 seconds, which might suggest it’s a bot.

But then the real interesting thing in that report is, they’re saying if you do anything, you need to leverage an identity proofing method which pairs a government-issued ID and a selfie along with some form of attribution methods. That approach is a big part of our whole KYX strategy and providing our customers with document-centric identity proofing and layer in fraud signals that help strengthen identity assurance.

Peter O’Neill: I think it’s got to be like that. Again, COVID is making the market move a lot faster but your solutions were already there. Congratulations on the new acquisition, and keep doing what you’re doing, the world needs these kinds of solutions right now to help us through what’s going on out there.

Dean Nicolls: Well, thank you Peter. Have a great day!

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(Originally posted on Mobile ID World)