Translated by Authme
Authme is a startup that provides digital identity verification services. They pioneered the use of mobile phones to read passport chips, coupled with facial recognition and liveness detection technology, for identity verification, significantly reducing the required time.
The most common use case for «digital identity verification» is in the financial industry. However, anyone who has tried opening a bank account online knows the challenges of multiple selfies, inaccurate recognition, and incomplete personal information fields on successive pages. How did Authme, a company founded just two years ago, become the invisible force behind many financial institutions, solving these pain points?
In September 2021, LINE Bank announced three major innovations: an intelligent chatbot customer service, the ability to upgrade accounts with an NFC-enabled national ID card, and the provision of eKYC services. Unusually, the service provider for the latter two services was revealed to be Authme, a startup founded in 2019.
«We are a startup company, and for financial institutions, it is indeed a riskier choice. We also don’t have any special relationships; it’s just that after a series of fair POCs and discussions, we were fortunate to be chosen by LINE Bank,» implied Andy Lee, Co-Founder and CEO of Authme. This suggests that despite their young team, they have gained high recognition due to their technical capabilities.
Discovered KYC Pain Points from Cryptocurrency
Before founding Authme, Andy Lee had established a cryptocurrency exchange and launched a cold wallet for storing cryptocurrencies. During this process, he realized the importance and pain points of anti-money laundering mechanisms. To prevent money laundering, it was necessary to link users’ online identities to their real-world identities. This involved requiring users to take selfies holding specific wordings or their ID cards, capturing their faces from multiple angles, and providing extensive personal information. The verification process often took more than 1-2 days.
In the crypto industry, the larger always becomes larger. Andy realized the resource limitations, prompting him to delve into digital identity verification. He saw this as an essential need, with a global consensus on the increasing importance of anti-money laundering measures. However, as the procedures became more complex, the user experience suffered.
Authme’s solution involved utilizing OCR technology to scan the basic information on passports and using the NFC functionality of smartphones to read the passport’s chip. Since the passport chip contains various personal information, including a high-resolution photo, Authme used facial recognition technology to confirm if the user at that moment matches the photo on the passport. Furthermore, Authme incorporated liveness detection technology to determine if the user is a «live person» rather than someone attempting to use a stolen photo. While this process might seem complex, it could be completed in under one minute.
It was the combination of NFC technology for reading passport chips and Authme’s digital identity verification solution that set Authme apart and made it a technology provider for LINE Bank.
Andy humorously pointed out that this solution required both the right timing and favorable circumstances. The timing was perfect as it coincided with Apple’s opening up of NFC on smartphones, making it compatible with most devices. The favorable circumstances included the growth of pure online banking in Taiwan and the increased demand for digital identity verification services due to remote account openings during the pandemic.
While digital identity verification is commonly associated with the financial industry, Authme’s first client was actually a shared transportation service provider. For instance, with shared scooters, when a user decides to give it a try after seeing one, lengthy identity verification processes often discourage them. By utilizing Authme’s solution, this verification can be completed in just 1 minute. Today, Authme serves a diverse range of corporate clients, including financial institutions, insurance companies, banks, remittance services, and social networking apps, offering its services on a project basis or through a Software as a Service (SaaS) model.
Future Goal: Become the Center for Identity Verification
However, there is a possibility of replication when the technical process is disclosed.
Andy also mentioned that when it comes to breaking down the technology components such as OCR, passport chip scanning, and facial recognition, there are corresponding technology providers available. However, what makes Authme unique is the accumulation of algorithm models and datasets. For example, compared to people with deeper facial features in Western countries, facial recognition for Asians presents higher challenges. Authme has a vast amount of experience in recognizing Asian faces, making it an irreplaceable asset. They have also established an in-house research team dedicated to studying relevant technologies and have access to the most cutting-edge journal papers and data to ensure their technology remains at the forefront.
In the future, Andy hopes that Authme can become an «identity verification center.» Not every financial institution has the budget to promote digital identity verification. Strict regulations in financial institutions, along with the high costs of remote backup and multi-stage testing, often deter them from adopting new technologies.
«If Authme can play the role of an identity verification center and become a third-party service provider, whenever any financial institution needs KYC, they can integrate with us through APIs to quickly complete online identity verification,» said Andy. While this goal involves legal and policy aspects and requires time for supporting measures to be established, Authme will continue to be an invisible force behind many financial services until this goal is achieved.
