Video VOI to ‘fall by the wayside’ this decade: Mark Pesce

Mark Pesce, futurist and co-inventor of 3D vector graphics VRML, has suggested that single-source verification of identity (VOI) using existing voice or video technology will be mothballed before the 2020s come to a close, as cyber attacks and bad actors become increasingly adept.

During an event on digital transformation within the legal and property sectors hosted by Galilee Solicitors on Friday (5 August), Mr Pesce outlined that the ability for cyber criminals to mimic a person’s identity has become more sophisticated recently, particularly noting that software applications can be harnessed to superimpose the image of another person’s face onto live video/web chat (for example, via Deepfake), while other software can convincingly clone and synethise a person’s voice based on actual audio (for example, ReSpeecher).

Mr Pesce, who revealed that he is currently going through the mortgage process with a broker, suggested that while the mortgage industry had quickly moved to adopt technologies such as e-signatures and remote VOI, there were still vulnerabilities in the process.

“Even that ability to be able to identify someone over a video – which is what my mortgage broker was doing with me last month –
even that is going to fall by the wayside before this decade is over,” he said, emphasising that relying on one method of VOI checking will not be enough.

“There is a gap between where we are with identity and where we need to be. So what are we going to do? Well, we’re going to do what we’ve always done, which is to pull from multiple confirming identities…

“Any solution has to hit multiple identity points – for example, utilising government ID, plus verifying the physical person, plus matching biometric data on that person. If you bring those three things together, and those three things are in agreement, you have a reasonable confidence that you’re going to have the right person.”

Mr Pesce gave the example of Livesign (which was recently launched by online legal solutions provider thelawstore.com.au to combine digital signing and digital VOI on legal documents, including mortgages), as one such solution.

The tech works by binding digital signatures with government-issued photo identification at the precise point of signing. This is done by scanning a signee’s face via a smart device and matching that against their ID photo of a customer and biometric data.

This is said to result in a non-repudiable signing process as the digital signature cannot be completed by anyone else.

By digitising the signing process and verifying the signee’s identity at the point of signing, the tech aims to provide greater security by reducing the risk of fraud, while accelerating the administrative process by removing the need for physical witnesses/in-person verification.

“What it means in practice is that I could have done my mortgage pre approval, without having to pull my hair out and my mortgage broker could have been assured that it was me that was putting my final signature on these documents before they got submitted to the bank for pre approval,” Mr Pesce said.

Speaking to Mortgage Business about the software, the managing director of Galilee Solicitors (the parent company of thelawstore.com.au), Simon Duke, noted that Australians lost approximately $33 billion to scams last year, with the mortgage and finance industry particularly vulnerable to attack.

“Fraud is a huge problem for lenders and there’s a direct financial loss risk. There’s also a regulatory risk because the state-based land title’s registrars in Australia require that verification of identity is done, ideally, at the point when the mortgagor signs the mortgage,” he said.

“Livesign solves two problems: one is quality and one is timing.”

On quality, Mr Duke said that the highest level of certainty available to verify identity is through the photo and biometric data stored on passports. As such, he explained that Livesign asks a customer to hold a smartphone to their face, which scans the customer’s face, and compares that biometric data against the data stored in their passport chip (accessed via government databases).

“That radically increases the level of certainty that the lender can apply in identifying a customer versus an alternative technology… and has huge benefits for our clients in terms of fraud mitigation,” he said. 

On speed, Mr Duke noted that by having the VOI check take place at the point of a mortgage document being signed, this also reduces the possibility of a bad actor, a cyber criminal, intercepting documents.

“By identifying the customer at the very point in time that they’re signing the mortgage, you then close down that timing risk of the gap between when you’ve identified the customer when they’re signing the mortgage,” he concluded. 

[Related:Crime compliance tipped to cost financial services industry $3.6bn]