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Portugal: A Population of Global Explorers and Diasporas

Vasco da Gama Bridge

Vasco da Gama Bridge

I am sitting in a nondescript office in the harbor sector of the city of Lisbon looking out at the beautiful Vasco da Gama Bridge. This bridge is the longest bridge in Europe spanning over 12 kilometers across the Tagus River in Lisbon. While this bridge is a modern wonder, the discussion taking p
lace inside the office is also a bit of a wonder in the world of global identity verification.

I am reviewing the results of a test file with our Portuguese Data expert. We had originally processed his file and achieved somewhat lower results than desired. The timing of the file processing and my trip to Portugal allowed for me to sit down directly with him and a colleague to review the results and better understand why the results were so low.

One of the first things we discovered about the data is that a percentage of the data was made up of foreign names meaning non-Portuguese in origin. As a result, these people were likely not citizens of the country but might still be residents. Portugal is unique in Europe because it has a large and growing population of ex-pats who retire there from the United Kingdom and France. The way our expert described it is that Portugal was a country where “many people are passing through”. Some stay for a little time and some stay forever. Given the temperatures, the beauty of its beaches and the great cost of living I completely understand this.

So while we could not accurately validate those people with our Portuguese Identity Verification we were able to architect within our system to run those people who did not validate in Portugal through our UK and then French Identity Verification providers all within the same system. This “waterfall” approach allowed for us to gain some immediate lift in the results and better validate the ex-pats that had settled in the region.

The next data validation challenge that was unique to Portugal (and likely unique to Brazil) was what I dubbed “The Maria Effect”. A large number of the women in Portugal are named Maria. This is a statement made by a guy who has spent more than 20 years working with consumer data in Portugal so I am going to choose to believe this statement of fact. Many of the Marias have secondary first or middle names which create differentiators (example: Maria-Theresa). Additionally the last name of her family and/or the last name of her husband might be used when completing some types of documentation thus Maria becomes possibly Maria Theresa de Salvo Carlos de Herrera. This a complete legitimate full name. At 32 characters this name likely would not even fit into most online data entry fields but that is the smaller of the concerns. Maria may also express her name as any combination of the above depending on how she choosing to distinctly represent herself. So she might be Theresa de Salvo or Theresa de Herrera or Theresa Carlos de Herrera. In all of these examples Maria may be substituted for Theresa creating a database of Marias that may or may not link back to a known identity in Portuguese data systems. This is where customized and localized fuzzy matching and rules logic are needed to ensure the best possible match result when attempting a identity verification for this country.

The next example of local data uniqueness is the “da Effect”. Many last names in Portugal have a preposition of da or de associated with them. Names can thus be represented in systems as Vasco da Gama or Vasco Gama. In both cases they are the same person. Many identity verification systems may choose to work with a hard 1:1 match and thus this would not generate a match on this particular name. Other systems may elect to drop the da/de as extraneous characters and not recognize them as part of the last name thus corrupting the name and likely generating a poor response.

After reviewing all of these examples we were able to ensure that we tuned our inputs to properly parse data going into our platform for Portuguese nuances. This allowed for us to create a better result and improve the overall match rates. This in turn helps satisfy our customer’s needs which at the end of the day was the goal of the conversation.

The above is a great view on how hyper-local knowledge and skills will produce quantifiably better results for global eKYC and identity resolution efforts. Whether it is mobile customer onboarding at BBVA or HSBC; or fraud risk analysis at Kreditech of fulfillment of European 4th Money Laundering Initiative compliance regulations between customer transactions. At GDC we enjoy learning these nuances from our local partners and much like the vision of da Gama we seek to spread this knowledge throughout the world.

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An Update on What We’re Doing at GDC (Hint: lots of global electronic identity verification)

Dear Friends,

You will notice some recent changes to the GDC website, and more are on the way. Let me explain what’s going on.

Two years ago we saw an opportunity to extend the Global Data Consortium model to electronic identity verification. This is where companies use independent reference data to instantly verify the identities of their customers. Think of opening an online bank account. Your bank is required to verify that you are who you say are before you can start moving money around. They want to do this as quickly as possible as you go through the registration process, otherwise you might lose interest and move on. Yes, we live in an instant gratification world!

We had a hypothesis that GDC could take the model we proved with global address hygiene- negotiating over 50 partnerships worldwide and building the technology to access all this distributed data in real-time – and apply it to identity information. And in true agile startup fashion, we started a customer discovery process to validate our assumptions. In talking with dozens of people across a range of industries, this is what we heard:

1. It’s not just banks! FinTech, eCommerce marketplaces, the sharing economy, social networks (I could go on) all want faster ways to verify identities as they move into new country markets.

2. All these companies are generally unhappy with the options available for global electronic identity verification today. This leaves them using document authentication services, which are too slow, create friction with customers, and cost too much.

3. They want a solution that gives them one point of access to as many countries as possible. (Many had tried building a similar technology in-house but failed. It was too hard!)

The feedback was enough for GDC to build a simple solution and put it quickly into beta mode. With just seven countries to offer, we found several early-adopters and two key strategic partners. They each used the product hard and gave us tons of critical feedback. We iterated, working out the kinks and proving out the technology and the economics one step at a time.

GDC is now over a year past that beta launch, and it’s time to show the world what we have to offer. I couldn’t be more excited.

We have already expanded the platform from seven to 19 countries, integrating services from over 45 data partners along the way. And we are only accelerating from here, gearing up to pass 50 countries (135 data partner integrations) by the end of next year. We are serious about becoming the one point for the market to access global electronic identity verification services.

So checkout our revised website. In the coming weeks we are adding more content to describe our services in each country, and we will be adding new countries.

www.globaldataconsortium.com

If you need help with global electronic identity verification, reach out to me and let’s talk about what GDC can do for you.

Also, if you are a data provider in a country we don’t yet offer, we would love to learn more about your services and consider adding you to the GDC platform as a Consortium partner.

Best,

Bill

bill@globaldataconsortium.com

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Spotlight on Brazil and Electronic Identity Verification

Next month the eyes of the world will once again be on Brazil, this time for the 2016 Summer Olympics. Despite all its recent turmoil  – the trifecta of political, economic and health issues – I’m optimistic that Brazil will put on a fun and safe show for us all. More importantly, I’m optimistic about the country’s overall prospects.

The turmoil has kept many companies away from Brazil. But over the long run, businesses with ambitions in Latin American will have no choice but invest there. It is, after all, the world’s sixth largest country by population and seventh largest economy by GDP. Ignore it during this short-term instability, and you might lose your chance to participate in the long run.

The big eCommerce marketplaces recognize this. The financial press prints story after story of Alibaba, Rakuten, Amazon, Mercado Libre and others investing heavily in Brazil. Why do this in the face of the country’s current instability? Because competition among them is brutal. If any of them cedes market share today, competitors will be all too happy to take over relationships with their sellers and buyers.

GDC got the chance to see this competition firsthand earlier this year. We launched a Brazil electronic identity verification service to help eCommerce marketplaces onboard sellers quickly.

Verifying the identities of merchants before they can begin selling goods on marketplaces has become common practice in the industry. Without it, bad actors are quick to infiltrate a marketplace with counterfeit goods and other forms of fraud. Using identity verification – asking the seller to provide information proving he is who he says he is – stops fraudsters from registering under false pretenses. They never get access to buyers, so fraud goes down and customer satisfaction goes up.

One of the big eCommerce marketplaces recently started using the Brazil electronic identity verification service. Previously, they had a clunky seller onboarding process. It leaned heavily on a manual workflow, used multiple data reference sources, and required new merchants to provide a lot of personal information. For example, applicants had to scan and submit photo ID’s to a document verification service as part of the process. The whole thing was time-consuming, inconvenient for sellers, and expensive for the client to maintain. Worst yet, they were losing sellers. The friction of onboarding had legitimate merchants abandoning their registrations before they could be approved.

GDC was glad to help. Our Brazil electronic identity verification service consolidated their entire process into a single registration form. When a seller submitted his name, address and national tax ID, a single API call to our platform queried multiple sources of credit, government, commercial and consumer identity reference data from our in-country Brazilian partners. The various sources cover over 95 percent of Brazil’s addressable adult population, and we were able to help our client match and approve nearly 75 percent of all applications within seconds.

We streamlined their process, limited the need for manual intervention in the workflow, and reduced their dependence on document verification and multiple data services. Most importantly, we got rid of the friction that had so many sellers abandon the registration process.

This is what GDC does both in Brazil and in the many other countries integrated into our global electronic identity verification platform. We give you one point of access to instantly verify the identities of customers, partners or counterparties no matter their country of origin. We help you bring in the good customers quickly while weeding out the bad ones.

If your business is expanding into Brazil, and you need help with verifying the identities of your customers, let’s talk. In the meantime, enjoy the Olympic show Brazil has prepared for the world.

Thanks for reading!

Best,

Paul

Paul Dryden
Global Data Consortium
paul@globaldataconsortium.com

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The Patagonian Express- Connecting Latin America Then & Now

I recently reread Paul Theroux’s book The Old Patagonian Express. His book details his journey by train from the suburbs of Boston to the tip end of Argentina by rail. Yes, one can truly travel the length of North, Central and South America by relatively contiguous passenger rail service. The first time I read this book was over 30 years ago when I was in high school. Now rereading it after having traveled extensively and establishing partnerships with companies throughout Latin America I have a greater appreciation for Theroux’s experiences captured in this body of work.

The Americas are full of rich and diverse cultures. In the age of the Internet these cultures have become more connected and accessible. eCommerce platforms such as Linio and Mercado Libre are thriving on the continued growth of consumer access to the Internet. At our company we have seen an intense interest in helping many companies validate and verify consumers and businesses in Mexico, Brazil, Columbia and Argentina. Age Verification to restrict minors from making inappropriate purchases online, Seller Verification to help ecommerce marketplaces ensure the quality of products offered on their platforms and Customer Identity checks for Fintech companies needing to complete AML/Compliance checks. All of these are services needed on a country by country basis.

An example of the robust nature of some of our data is in Mexico where GDC is able to offer coverage for about 96% of the population. What this means is that we cover the people in most of the major cities and population centers. We do not likely have significant coverage in Papaloapan or Tapachula which is located in the southern border region of Mexico. Those regions are slowly but steadily joining the rest of their brothers and sisters with access to the Internet but it will take more time to see them fully represented.

As I read about Theroux’s journey through the jungles of Mexico and the pampas plains of Argentina I marveled at where our paths crossed in the major cities of the Americas. I haven’t traveled by train in Latin America but I have experienced some of the same cultures as he did during his journey. Engaging with business owners in each country served to broaden my understanding of what the challenges are to produce a good ID Check and why the same data inputs captured in the US or Germany would not be the same type of needed data input in Columbia or Ecuador. Understanding that diversity in cultures is what makes my company unique in our community of vendors. More importantly our network of in country data providers understand the diversity of cultures that are resident in their respective countries and regions.

In Identity Verification, one size does not fit all. Different countries allow for the verification of different elements of a consumer and a business’s key details. Knowing the required data inputs to create a good match for a desired output ID is a key function of what we help provide at GDC. Whether it is producing a NAP (Name, Address, Phone) match or doing a CURP or other National ID verification, GDC can help. Helping an eCommerce or Fintech company reduce the amount of paper documentation needed to conduct seller verification is something the GDC Worldview platform can do in a real-time or batch-based process.

Now is Carnival season in the South. Celebrations are being had and people are visiting their lineage homes to celebrate with family and friends. I imagine Theroux’s trains are crowded with passengers taking the journey North and South on the Patagonian Express. I also imagine many of them are using mobile phones to connect with friends and family and to conduct commerce transactions as they roll through the night.

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Having Your Cake and Eating It, Too: Accessing the World’s Best Identity Data through One Source

Next week I’ll be at MRC Vegas, the big annual meeting for Merchant Risk Council. It’s a trade group for eCommerce payment and risk professionals, and everyone will be talking about how to grow their international business while minimizing the impact of fraud.

Fraud prevention and global identity verification data go hand-in-hand. But that debate has long been defined by this “either-or” mindset. EITHER you choose the best data to power your fraud prevention efforts (but you have to find all these specialized providers, do the hard work of integration, spend a bunch of money, etc.) OR you choose a single point of access that rolls a bunch of data together and gives you a single vendor to manage (but you get poorer data and it’s not updated very often).

“Either-or” has been the only option for a long time. But now there’s the option to have the best data from many different sources AND access it through one system. You can have your cake and eat it, too.

More on that in a moment.

Talk With a Global Identity Data Expert at MRC Vegas 2015

First things first. It’s easier than ever to integrate with local sources for identity information and to use it to improve your fraud mitigation efforts. If this subject interests you, and you’re going to be in Vegas next week for the conference, let’s talk.

Shoot a quick note to bill@globaldataconsortium.com or connect with me on LinkedIn.

Now, here are some of my thoughts on ways every eCommerce business should be considering locally-sourced identity data to help with fraud.

Fear of Fraud is Slowing Your Growth

Fraud is no small problem for eCommerce. Cross-border trade represents all this growth potential. Countries like Mexico, Brazil and Turkey and regions like Eastern Europe have this tremendous appetite for online buying (each fueled by an exploding middle-class with newfound disposable income). But shipping across borders presents real risks that start with this very fundamental question…

Is that person trying to buy your merchandise really a customer, or is he a thief?

The growth opportunity is exciting, but when you don’t see the actual credit card (CNP or Card Not Present) the problem of fraud is very real.

There are a lot of tools out there to help merchants figure out this question. Silicon Valley seems to launch bigger-better-faster fraud prevention startups every day. But it all must start with determining whether that customer on the other end of a computer (or, as is more often the case, tablet or smartphone) is a legitimate person or not.

Solving the problem of fraud in cross-border eCommerce starts with identity verification.

The Best Sources for Identity Data are Local Providers

The best sources for identity data are local providers, experts in their own markets who know the nuances of their home countries better than anyone else and who are committed to keeping data constantly up-to-date.

Take Mexico, for example, where the combination of paternal and maternal last names are used in the performance of an identity check. And where there are multiple identity numbers in use (RFC, IMSS and CURP). The Global Data Consortium partners in Mexico supply 361 million unique records that provide identity verification (some combination of name, national identity number, address, date of birth and more) for 110 million individuals.

It’s an enormous amount of identity data, maintained by businesses that use it for identity verification purposes within Mexico, and that invest in it by adding new data and continuously refreshing what they have.

Mexico is only one example to highlight these points: Local sources have more complete data to share, they update it more frequently and they bring to bear their local expertise to help you understand important nuances like the differences in RFC versus IMSS versus CURP.

The Problem with Accessing Local Data

The problem with accessing local data is that jurisdictional issues around privacy laws mean each country tends to put strict controls over who can do what with identity data. So the best sources are almost never global services where the data is shipped across borders and aggregated onto a big server. Most governments don’t like this data leaving their countries.

So what you want to do integrate with the in-country data of local providers via the cloud where an API call accesses the data on the local source’s servers. This gives end users exposure to more data because governments and IP owners feel more comfortable when the data never leaves the country of origin.

Of course this sort of cloud-based integration isn’t easy to do. For most eCommerce businesses, there are simply too many complexities based on communicating in different languages, surmounting legal issues, development costs to build and maintain access to various systems, and all sorts of payment headaches.

And so the “either-or” mindset kicks in. Many of the eCommerce companies decide instead to rely on aggregators of global identity data, services that bring together a lot of information but require their clients to sacrifice quality for convenience. They provide one point of access for a lot of data, but they fall far short of the standards set by in-country local sources.

Going Beyond the “Either-Or” Mindset

So here’s the question I’m testing next week at MRC Vegas…

What if you could have both?

What if you could have the best available local identity data and get it through one point of access?

That’s what we’ve done with our Worldview system. It provides:

API Management. With one point of integration –to Worldview – you get full access to the world’s best local identity providers without the development costs or headaches.

Legal + Compliance. GDC complies with the EU-US Safe Harbor Framework to protect personal data. We vet our data partners through rigorous legal and compliance checks so you don’t have to.

One Language. There are 6,500 spoken languages in the world. GDC talks with identity data partners in many of them. But you only need to know one to access their data through Worldview.

One Place to Pay. Vendor management is complex when dealing across languages, borders and currencies. GDC simplifies that for you: one payment in one currency when using Worldview.

When you go global, going local can help you reduce fraud and improve your view on who your real customers are. Get a local view on your global transactions. Try Worldview.

Is this important to your business? If so, let’s connect next week in Vegas.

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The Opportunity in Korean Cross Border Commerce

Koreans have discovered the value in cross border commerce arbitrage of many electronic products. For US and other vendors looking for new global market opportunities, the Korean market should not be ignored.

In 2013 there was 47% growth in imports to Korea due to cross border commerce activity. And, mobile commerce in Korea has been growing fast since 2011, at a compound annual growth rate of two-and-a-half times that of the United States. Korean consumers seeking ways to avoid paying for expensive global brands through brick and mortar retailers or domestic e-commerce channels now purposely shop on global platforms and willingly pay customs and duties on products to take advantage of the significant pricing disparity.

In addition, the Korean payment market has adopted a complex ActiveX payment model for buyer identity verification. Only after more than a decade later is Korea realizing the impact of that choice – forcing eCommerce players to conform to prohibitive methods to try and reduce the amount of card not present fraud in Korean e-commerce transactions. However, Korea has recently taken steps to open up the options for its payment and identity verification for online transactions.

Global merchants can take advantage of this opportunity but avoid the complex ActiveX type validation services by implementing other forms of Identity verification offered by companies like GDC and others. In addition, in the same API call you can validate the delivery address information to improve results on delivery time to the customer and reduce call center costs stemming from customers concerned with the status of their order.

Valuable New Market Opportunity. Reduced Fraud and Customer Call Center complaints. Improved Delivery. Try Worldview and See the World More Clearly.

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Ex-pats, Students, FACTA and Banking Collide

Read an article in the Wall Street Journal about how US ex-pats are being shut out of the global banking system due to bank concerns with compliance requirements.

When we had the original idea for our company, one of our advisors told us the story of how he had been a long time employee of IBM in Australia. Then he got the opportunity to move to the US with IBM Americas. He moved his family to Boston and then had the most puzzling experience when trying to purchase a car. It seems that the bank could not give him a loan because he had no credit history in the US. Further he couldn’t get anything but a prepaid credit card despite the fact that he was a Visa and Mastercard holder in Australia. For all intent and purpose he did not exist in the eyes of the US financial system. He ended up having to get a letter vouching for him and his employment from IBM just to be able to open a simple bank account.

Why couldn’t the bank run an Australian ID verification or Credit Check on him? Why couldn’t the US citizens living in Germany and Dubai get credit in their new home countries and retain credit in the US despite living abroad? The answer is simple..They don’t have the systems in place that provide them with the access to validate and verify on a global basis.

This same problem exists in the US academic universe. Students accepted into university programs must submit realms of forms and copies to try and prove they are who they say they are to the university admissions department. After they are accepted they are unable to procure simple local credit due to the inability of banks and financial providers to perform a standard identity check on them.

International Identity Verification is not difficult. There are solution providers such as our company that will provide a per click verification of information at a cost of no more than $2.00 per click. Providers are able to access networks of providers that manage ID verification on a country or regional basis. All of this information is available via a web service and is browser based for ease of use.

At GDC we provide this information using a unique network of specialty providers. With just one click banks and other financial institutions can reduce fraud, manage identity verifications and better determine whether an applicant is a good potential customer. With one click you can expand your Worldview. Why not?