Picture this: you’re the CEO of a successful FinTech company that has enjoyed better-than-expected numbers in the past quarter. After finalizing your 10-Q, you hit the morning talk show circuit to publicize your fantastic quarter. A few days later, you learn from an internal audit that the bulk of the new users aren’t actually customers, but bots. You’re forced to amend your financial report and the news goes viral. Your company takes a hit on Wall Street and you are left with egg on your face.
This is the exact scenario a growing number of CEOs are experiencing in real life. And yet, despite the increased public awareness of bots and the dangers of poor identity proofing, too many companies still treat customer identity like an afterthought. That has to change.
Throughout my career, I’ve found myself searching for the executive responsible for managing digital identity. In my various global senior roles at banks, neo-banks, fintechs, and technology companies, I often asked the question "Who owns customer identity?” More often than not, it’s a simple question with a complicated answer.
The first person I would be pointed to was the CISO of the organization. Generally, after a very informative conversation, I would learn that while the CISO owned the employee access and security portion of the company, they were merely a stakeholder in the consumer identity strategy and not the owner.
The next person I would speak with was the owner of the channel or global authentication strategy. Ah, this seems promising! Nope. After a very interesting conversation about the authentication strategy, including FFIEC guidelines, PSD2, and the cool features of the future of authentication, the owners would tell me that they just "assumed" the customer identity checks were completed by the time it got to them. What? Sound the alarm!
Finally, somebody would point me to the BSA/AML Officer. They own the KYC program, and I would think, this has to be my last stop.
Close but no cigar. Although the compliance aspects of the Customer Information Program (CIP) were covered by KYC and Customer Due Diligence (CDD), this team focused solely on "consumer data verification" (name, address, SSN, DOB in the US) and not actually establishing identity confidence. When it came to ensuring that the consumer was presenting their own data, most companies were asleep at the wheel. No wonder why so many companies find themselves in the unfortunate position of explaining to investors how and why they mistook fake bots for real customers.
So what should you look for when hiring a digital identity executive and how can you set them up for success? Considering that identity touches every step of the customer journey, from the first consumer interaction to ongoing customer experiences, the role is extremely cross-functional. The role touches security, authentication, compliance, fraud strategy, and technology so the executive should have an eclectic resume with expertise in multiple disciplines. The owner should have good knowledge of the "business" of identity and understand the technology landscape. Ultimately, their vision for how the organization can leap forward and modernize the processes, customer experience, and technology must be supported by the CEO.
Additionally, the identity executive should work with the business to measure the organization's definition of a "North Star" customer. The organization's metrics should include the identity confidence of the account owner, if your identity leader is not being supported in the people, process, and technology required for this confidence level to be adequate then the measurement should be discussed with the C Level of the organization and transparent to the investors if that scenario applies.
By leveraging the next generation of digital identity tools like Prove Pre-Fill®, digital identity executives can help companies accelerate onboarding, increase revenue, and prevent fraud. When companies have a high level of confidence in who their customers are, they can worry less about bots and more about growing their business. In today’s digital-first world, fraud executives are no longer a nice-to-have, they’re critical.
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