How Big Data, AI and Biometrics Are Building Trust in the Sharing Economy

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In this special guest feature, Labhesh Patel, CTO & Chief Scientist at Jumio, discusses how big data and digital identity will power businesses in the sharing economy in the future. The article looks at the massive amounts of data being collected from government-issued IDs (driver’s licenses, passports, etc.) and photos individuals take to verify they actually are who they say they are, and how AI and big data analytics can help these companies create a more frictionless experience and build trust that fraudsters are being kept at bay. Trust is the most important currency in the sharing economy, and big data, AI and identity verification will enable companies to retain it. As CTO and Chief Scientist, Labhesh is responsible for driving Jumio’s innovation in the identity verification space with deep learning, computer vision, and augmented intelligence – an alternative conceptualization of artificial intelligence that focuses on AI’s assisted role to enhance human intelligence. He holds a Masters of Science in Electrical Engineering (MSEE) from Stanford University and Bachelor of Technology from the Indian Institute of Technology in Kanpur.

Companies in the sharing economy will have a much harder time building trust with consumers in 2019. In the wake of high-profile security breaches, it’s now more difficult to maintain trust after establishing it. Marriott’s Starwood Hotels breach gave fraudsters access to 500 million accounts, and Equifax 143 million, which has made personal identifiable information readily available for purchase on the dark web.

Given information exposed in 2018 alone, companies who operate digital businesses in the sharing economy need to be more careful now than ever before to ensure individuals receiving or offering a service, such as a ride-share, are who they say they are. Verifying individuals in the onboarding process with identity proofing is emerging as the new viable method. The global sharing economy is predicted to grow to $335 billion by 2025, according to a study by PwC, and companies need to make sure they are keeping their customers safe when enabling face-to-face meetings between strangers, whether it’s grocery deliver or a dating app.

The application of emerging technologies such as biometrics, artificial intelligence and machine learning, are providing the level of accuracy and security necessary in the identity authentication process to power the sharing economy and other digital, app-driven businesses.

Biometrics is Fueling Smarter and More Accurate Digital Identity Verification

The sharing economy is expected to grow to 86.5 million users by 2021, up from 66.3 million in 2018. Individuals leave millions of digital signals each day while using electronic devices, which sharing economy apps live on, and companies will now be able to leverage machine learning and AI to analyze the signals and define patterns.

Thanks to Apple’s recent launch of Face ID, biometric facial recognition has become mainstream and it’s easy to understand why. Facial-based biometrics are easy to use and convenient because every human has several unique physical characteristics — such as iris, voice and face — and behavioral characteristics that no one else has.

This increasing shift to biometric-based identity verification is creating a huge market for providers in the sector. In a recent report, McKinsey predicts this industry will grow to a $16-20 billion market by 2022.

Augmented AI and Machine Learning are Employing Digital Identity Verification at Scale

Biometrics will be key to establishing trust in the sharing economy because biometric data is continuously being fed into AI applications and they’re getting better at determining a user is who they claim to be based on collected facial, iris, voice and behavioral data.

How do they know indefinitely that the person is who they say they are? They compare biometric features in a selfie with that of a government issued ID. An ID by itself is not enough to verify an identity — it needs to be corroborated with biometrics and AI to ensure the individual presenting the ID is in fact the person pictured.

AI is being trained by human trainers to verify IDs and other documents at a global scale – some companies are training their algorithms with data pulled from more than 200 countries and are conducting more than 300,000 verifications daily. The databases are large, and the algorithms are becoming more intelligent daily.

This means that it is becoming nearly impossible to fake a digital identity with a company deploying these innovative tools because users are required to take a selfie and then that is compared that to a government issued ID. The AI can identify fraud in several ways: the biometrics do not align, the government issued ID is fraudulent, and so on.

Evolving Verification Methods Maintains Two-way Trust in Sharing Economy

Trust in the sharing economy is a two-way street, and there is a high level of risk involved for companies that do not take the precautions to establish it. Companies must worry about the safety of the users of the service (someone looking for a ride on Uber or Lyft), as well as the users providing the service (the driver taking people from point A to point B). CNN reported in April that 103 Uber drivers have been accused of sexually assaulting or abusing their passengers in the past four years, and many other sharing economy companies, and users, have fallen victim to fraud.

To avoid exposing both parties in a sharing economy transaction to risk, both parties need to be thoroughly vetted. However, the intensity of this vetting process will depend on the value exchange at stake. For example, if an Airbnb user is opening their home to strangers there’s a lot more at stake and more intense vetting of the tenant will be the result. If an individual is requesting an Uber, they may not need to be as thoroughly vetted as a passenger, but drivers may be worthy of additional vetting. Being able to efficiently verify millions of accounts ensures both sides of the sharing economy can participate with more peace of mind.

Trust is the most essential part of the sharing economy, and companies need to evolve with the criminals to make sure they are staying ahead of new trends in digital identity fraud. The application of biometrics, machine learning and AI to the digital identity verification process is ushering in a new age of desperately needed security and confidence to protect sharing economy companies and users alike. 

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