A Digital Tool to Verify IDBy Jan Hogewoning | Fri, 09/25/2020 - 13:21
Q: How grave is the issue of identity theft in Mexico?
A: It is a very serious problem. According to Banxico, the country is eighth in the world for identity theft. Moreover, CONDUSEF has reported that identity theft has been on the rise. In 2019, there were 181,202 claims made related to identity theft compared to 156,386 in 2018. The issue is connected to cybercrimes and, in particular, is prevalent in activities of financial services companies and governmental agencies. The CNBV does have diverse regulations in place for different sectors to try to avoid such theft.
Q: What does your tool do to stop identity theft?
A: Our solution is modular, which means clients can apply it in different ways depending on the level of identity verification they seek. The tool is white label and can be integrated into our clients’ applications. This means that end users do not have to leave our client’s applications to have their ID documents or other information verified.
We offer 27 types of identity verification. One option for verification is that the end user scans their identity document on their mobile device. This document can be a voter registration ID, passport, a professional certificate, a migration document or another option. We have the ability to verify over 7,000 different types of documents worldwide. The client’s application will send the photo to our cloud-based server, where information collected from the card will be checked using an algorithm that is consulted through an API. In the case of a document scan, the only information needed to be verified is on the document itself. This includes the name, the address, the voter registration number, CURP (a personal ID code used in Mexico) and the visual layout of the document. The algorithm checks whether the information coincides with the combination of digits on the back of the document. The process happens very fast, between 15 to 30ms.
Q: What verification mechanisms do you offer in the area of biometrics?
A: We offer the option of biometric facial recognition. The user takes a selfie, which is compared to the photo on their ID. We have technology that can verify that the photo being taken is of an actual face and not a mask or a photograph. Our tool can also extract a fingerprint from a photo. This fingerprint is then formatted according to FBI standards and can be compared with existing databases.
Q: In which segments are your clients focused?
A: Most of our clients are in the financial sector, which is also the most affected by identify theft. We provide ID verification services for the Mexican operations of the world’s fifth-largest bank. Another important segment is casinos, mainly online. Our clients include Caliente and Big Bola. They use our tools to prevent money laundering. In terms of government clients, we provide our tool to the Ministry of Foreign Relations and the National Security Commission. We are also active in the real estate sector where our tool is used in areas such as rental contracts for residences or self-storage warehouses.
Q: Where do you expect a boost in demand for your product in the near future?
A: We see a big opportunity in the area of fintech, which was already witnessing a boom before the contingency. These are companies that do not have physical branches but they need to carry out identity verification for a variety of processes. In addition, they are subject to strict regulations from CNBV. We already have a few important clients there. We also see that e-commerce has been growing fast and in this segment there is card theft and identity theft. These companies, as well as third-party vendors, need to have forms of verification. ID verification is particularly important when payment is done using e-wallet mechanisms.
Q: What is the level of competition for your type of service?
A: Competition has been growing substantially, particularly due to the entry of many foreign companies from the US and EU offering a similar service. In terms of national companies, I can count them on one hand. Despite foreign competition, we have been able to compete and win at bidding processes. We won two requests for proposals (RFPs) with Nacional Monte de Piedad, one this year related to electronic payment and one last year related to biometric identity verification. The reason for our success is that we offer a modular product that can be personalized to our clients’ needs. They pay for what they use, not the whole tool.
Q: Is your company looking to raise capital from external investors?
A: I think we are the only company in the market that has not approached external investors. The reason is because we wanted to grow organically first and demonstrate what we could do. VeriDocID was launched in the market in 2019 after having grown out of SUMA Mexico. Since then, our growth has accelerated. In July this year, we had already sold more than in 2019. This year, we expect annual recurring revenue of approximately US$1 million. Next year, we expect this to rise to between US$3 million and US$5 million. However, we are interested in outside investment to take the company to the next level. If we can already compete without external investment, imagine what we can achieve if we have that.
In terms of new product development, we are exploring ways to provide end users a sovereign space where they can manage their digital IDs.
VeriDocID is a technology tool that allows verification of identity using different methods. The software consults a cloud-based API and can be integrated into third-party applications