The ability to identify someone is one of the biggest issues of the modern world. It’s wrapped up in everything from your Facebook profile to your application for a new passport. And digital identity is core to this.
In the US Jumio (funded by Andreeeseen Horowitz among others) offers automated ID verification via scanning the ID card, which just goes to show how important major investors think this space is.
Applying for an account, investment portfolio, loan or other financial product is pretty hard online. In most cases it requires a trip to a bank post office to verify your ID. High security ID verification is generally pretty tedious.
And it’s not just a nice-to-have. Banks must verify ID, either for anti-fraud or for anti money-laundering requirements. Usually people have to snail mail, fax or photocopy their IDs.
In other words the the area is ripe for startups – but it’s a high barrier to entry.
Coming out of Munich, the latest to join the fray is IDnow. This lets consumers verify their identity online, using their smartphone, tablet or webcam via image recognition of their ID document – like an ID card.
This is the first startup to come out of JET A (that’s the code name for jet airplane fuel), the holding company set up by the former founder of amiando, Felix Haas, (who is also co-founder and executive chairman) and amiando his co-founders, Sebastian Baerhold, Dennis von Ferenczy and Armin Bauer.
So here’s how IDNow works.
First you take a photo of your ID document.
An IDNow app uses the flash light of your smartphone to illuminate the official government ID and its hologram. The hologram reflect in the flash light and IDNow measures these reflections to verify that it’s an official government ID.
IDnow’s patented image recognition software then compares the person against the document it’s scanned. (All current international ID documents are supported). Next, an IDnow ID verification expert reviews the documentation via video chat.
Both financial product provider and customer are informed immediately of the results and the data is processed only on the consumer’s devices. (This setup satisfies Germany’s stringent privacy protection standards, so it could well be rolled out internationally).
This all only takes 1-2 minutes. The combination of IDnow technology and manual review means fewer mistakes in the whole process.
This is what the company has patent protected, and what sets it apart from Jumio. And, crucially, this level of security is what is required by European regulators.
Haas hopes the system will replace germany’s long held ‘PostIdent’ process, performed at Germany’s many post offices. IDnow is currently being trialled at some unnamed finance companies in Germany.
But what’s the kicker?
Because it complies with German and EU-wide regulations, IDNow can charge between 7-8 Euros per identification, whereas Jumio can only charge $1-2 for their non-regulated US solution.
Scale that up and you have a quite and interesting proposition going forward.