Takeaways from the Digital Identity Summit 2017
Posted January 12, 2018
In this episode Armen is joined by Reed Taussig, President and CEO of ThreatMetrix. They discuss the value of business leaders converging at the Digital Identity Summit.
Armen: Hi, I’m here with Reed, President and CEO of ThreatMetrix, and for today’s edition of Digital Identity 360. We’re on location here at the Digital Identity Summit in San Francisco. Reed, welcome to the show.
Reed: Thank you. Appreciate it.
Armen: Right, so we’re just wrapping up our biggest Summit ever. Did you like that new Summit 2017? What are your thoughts, coming out of it?
Reed: So this is my seventh Summit. And they’ve gotten better and better and better. This one was probably twice as good as any of them. The excitement around this Summit as a result of our product introductions, and I think just the speakers that we brought forth, Lexis and Chris Johnson from Pitney Bowes, and just a whole group of people with fabulous content, really great insights. There was just a general buzz and fabulous excitement through the audience for the past couple of days. Believe me, I’m feeling it physically.
Armen: Yes. Yeah, two nights of late nights and drinks will certainly get to you.
Reed: I tried to stay away from as much alcohol as I could last night, but it’s just been … People have been coming up to me one right after another. “You know, Reed, I just want to talk to you about this ThreatMetrix ID product that you guys are launching is really exciting. It’s just a leap forward…” And just a lot of excitement around it.
Armen: Yeah. So there’s nothing more powerful than when you have your customers and your partners on stage telling your story for you. And even non-customers, having someone like Uber on stage, who we’re not yet doing business with. Just telling stories about how they’re fighting fraud, how they’re thinking about identity. And really that intersects with our point of view and our business model.
Reed: Well, I mean it’s so true, because customers, they know that we’re going to say, “Hey, we have a great product.” So where’s the news there, right? But when their peers, who they respect a lot more than they’re going to respect us, in terms of being able to provide the unvarnished truth, that’s who they really want to hear from. And I got some great feedback; by the way, both positive and negative, from other customers who said, you know “I love your products. I love ThreatMetrix ID. Here’s something that would make my job a little bit easier.” And that’s really, for me, incredibly valuable, because it’s unvarnished. It’s not packaged in any way. It’s just, somebody just blurts out the truth and says “I don’t like this part of your product.”
And well, in some cases it’s a valid criticism. In other cases it’s not a valid criticism. But in all cases, certainly I want to sit down with Alisdair and the products team and say, “Look, I got this feedback. We should think about this.” And so, I mean these things are valuable. I think we’re sitting here somewhat self-congratulating ourselves on a really successful conference, right. But on the other hand, the feedback you get from one of these events is really terrific. And let’s, to go back to the self-congratulation part of it, this is our signature event. Every year. And customers come up to us and come up to me and go “This is just fabulous. Every year we come back because it’s just a great show.”
Armen: Well, ultimately it’s about the experience that we provide, and the content. And you know, when I think about some of the themes, I mean, clearly there was a lot of discussion around that balance between having great fraud controls, yet providing a superior customer experience. And obviously you can only do that with context that revolves around an identity, with the right attributes. But, given that, and that’s not a new thing, necessarily, but what is new is, I would say, the focus on, not necessarily “Keep the bad guys out,” that’s a given, but it’s how we are helping to enable digital businesses to grow and to drive revenue.
Reed: Well, so, right. And I thought actually one of the more interesting aspects of the discussions that came out at several places was the merging of digital identities, which ThreatMetrix is really the best at, with traditional, physically-
Armen: Analog data.
Reed: Physical analog data, if you will. Addresses, FICO scores, so on and so forth. And I think everybody agrees that by merging these two centers of information, you’re going to end up with a one plus one equals three scenario. I think what it does … I’d like to make a couple of comments on this. The first thing that it does is it provides attribution to digital datas. Digital identities. And, I mean, I think we need to be realistic about it. The digital identities, in and of themselves, are nascent. It’s a brand new thing. And people are trying to put their head around “What is a digital identity, and what do I use it for?” I mean, there are some clear opportunities, when Chris Johnson and I were speaking, for example, on better acceptance rates on cross-border e-commerce. The only way you’re going to get to that is with a digital identity.
But here and elsewhere, in terms of authentication, risk-based authentication, being able to merge a digital identity with Lexis information, for example, or Equifax information, that has been vetted, and that’s been in the market for a long long time, is trusted. That provides attribution and I think provides a degree of grounding in terms of people really feeling that this is incredibly useful data. I was explaining … I actually compared it to early airplanes. So everybody that got into an early airplane, say 1920s, said “Well I want a parachute with me. I mean I’m not gonna get into this thing without a parachute.” I think that’s where we’re at today with digital identities. And you know, pretty soon, people will realize that the plane’s not gonna crash and they won’t bring the parachute anymore.
Armen: Life will go on. So I talked with Tom Brown from LexisNexis earlier. He appeared on this show, and you know, the merging of the analog data with the digital data works both ways. It’s how do you provide even richer context for in the moment digital decisions? But also, for the more offline decisions, big mortgage decisions, how do you bring the digital attributes into that decision process. And that’s where I think, there’s really good value, all around for everybody.
Reed: There’s fabulous value, I mean for example, in the insurance industry, we have seen some near-term success in the insurance industry, purely in PwC, where analog identities and digital identities … Analog identities have been the name of the game up until now. Where digital identities can really demonstrate to that carrier “Is this a real person? Are you getting a scam here?” Yeah, I mean I think it’s absolutely true.
Armen: It’s a true statement.
Reed: That ThreatMetrix, in the creation of its digital identities, is adding as much value to the traditional players as they’re adding to us. And so I think it’s a great partnership and it’s really exciting so I found that, at this conference, to be one of the more interesting aspects of what you were talking about.
Armen: Yeah, I mean you often say, you know, at ThreatMetrix, we’re in the business of really helping to enable digital businesses to grow, to grow their business. One just small anecdote that we heard, the speaker from Netflix on stage just gave an anecdote around hey, if he could drive a higher conversion of trial accounts to paid accounts, that’s revenue into Netflix’s income statement. It’s real money. And that repeats over and over again with virtually every customer we’ve worked with. It’s not just about fighting, it’s fighting for a reason, to drive the business forward.
Reed: I thought also that Andreas’ presentation today, which really itemized and demonstrated that our march to digital identities wasn’t a means to an end. That all of the stepping stones that we’ve gone through and all of the components to that product, in and of themselves, separately and combined, add a great deal of value to the ThreatMetrix solution. And you know what, I had a conversation this afternoon with a customer who’s been a small customer, and is now really upping the ante to become a big customer of ThreatMetrix. And they told me; the person told me it’s really gratifying to see the fact that ThreatMetrix has separated itself from “The Device ID” World. Because devices are a signal. They’re becoming less and less reliable, frankly, particularly as it pertains to mobile phones. As we both know, we do 80 million transactions a day. Half of them are on mobile. And every iPhone 7 looks like every other iPhone 7, and so using that as your only signal, which, by the way, some of our competitors rely on.
Armen: That’s right. Their entire business is built around that.
Reed: There are entire businesses built on that. Is becoming less and less relevant, so adding to the platform, you know, we’ve had persona rules and we’ve had trust tags and things like that, but now with ThreatMetrix ID and our smart analytics products, probabilistic solutions, we’ve really matured into a very broad set of solutions. And then to put that on top of that, the announcement that I made that we are combining these solutions, so that customers will be able to take advantage of those components that we provide and point them at the particular problem that they need to solve without having a lot of artificial barriers in terms of “How do I acquire this product?” And “I don’t have a license for this product.” And, you know “How do I budget for this product?” And all of those kinds of things. So I think it was a really good decision on our part. And by the way, I got huge, really positive customer feedback on this. So, for those of you who are watching this video that didn’t attend the Summit, we’re packaging all our products into a single solution, which includes the Dynamic Decisions Platform, Case Management, Smart Rules, the Integration Hub, ThreatMetrix ID, into a single product along with our Threat Detection products, into a single product without additional charge through March 31st. And the objective here is to encourage the customer base of new customers as well as existing customers to really use these products and discover the value that they can provide.
Armen: Well, as you said on stage, it’s we want to make it easier to do business with ThreatMetrix.
Armen: We’re able to deliver value. Let’s just remove friction from our relationship with our customers.
Reed: That’s right.
Armen: So those were two announcements. ThreatMetrix ID, making it easier to work together. But two other announcements, one around a strong authentication capability, integrated with our traditional risk-based authentication.
Armen: And then the partnership with Nok Nok Labs, for FIDO compliant solutions. So how do you think about that set of capabilities, with respect to the overall offering that ThreatMetrix delivers.
Reed: So, I was having an interesting conversation during lunch here today with Evander, who you might consider to be a competitor, frankly, who offers strong authentication, and they had a real misconception. They said, “We don’t really understand why you’re getting into this strong authentication market.” And that’s because their perspective of strong authentication is, for the most part, an IAM. An employee-based workforce authentication. I told them I said, “Look, you know there are issues, PSD2 in Europe, for example, that will mandate strong authentication, and in some cases, those merchants, those customers of ours, want to be able to provide strong authentication, but they don’t want to have to have a complete platform to manage for strong authentication. They really look at it from the viewpoint that “We want to use your risk-based authentication. If the risk-based authentication can’t come up with a definitive answer, we’ll go to strong authentication, or if there are regulatory requirements. So, as we announced today that we’re going to deliver, or are delivering strong authentication that is mobile-based, that is biometric based, and we’ll add other biometric features to it. But it’s simple. It’s straightforward. It’s integrated into our platform. It’s not difficult to consume. The Nok Nok FIDO announcement is really intended for a completely different purpose. And that is, FIDO has become an accepted standard, particularly across financial services, but also the platform vendors. I think that many people, if they don’t realize it’s true that Google and Microsoft have both signed on to FIDO. They’re part of the FIDO alliance. They’re incorporating FIDO into their products. In fact, they’re going to put that capability into their browsers as well as, it’s already on the mobile side. And as a result of that, other major players in the industry, including Facebook, including Bank of America, and basically every single major bank that I talk to, is pretty much signed off on, you know, “We’re going with FIDO.” So in those cases, where strong authentication is required at the platform level, at a scalable enterprise level, and understanding that we are a B2B to C company. We’re not really that interested in employee-based authentication. But there are a lot of companies that have very large retail channels that are adopting FIDO, particularly in the retail-banking sector. And I think that in order to be a full-service vendor to those customers, that we need to be able to provide that product, tightly integrated into our risk-based authentication solution.
Armen: Yeah, I think that another way to think about this is if you think about the world through the lens of the customer, being customer-centric, we have the context to know, across that journey, right? Not all customers are created equal, and how you treat a customer in a given use-case might be different in scenario A versus scenario B. Having this full breadth of capabilities allows us to provide the right authentication capabilities at that right moment in time. So, sort of reinforce that customer-centric treatment.
Armen: Good. So any parting thoughts? As you’re coming out of the last three days and looking forward?
Reed: Yeah. I am really looking forward to making sure that our customers gain adoption into these new products. That they use them. And towards that end, I, yeah we do have a full services organization. We encourage you to take advantage of it. They have been trained on these products to help you get them installed, to help you understand what the value is. I really do want to make sure that our customers gain the insight on ThreatMetrix ID and the Smart Analytics and all the products that we’ve delivered. Really really important. And you know we’ve provided our customers six months at no additional charge to do that. To encourage them to do that. So we really want to see that happen. Next year, we’re going back to southern California for the next Summit. I expect the next Summit will be better than this Summit.
Armen: The pressure is on.
Reed: Just saying.
Armen: Just saying! No pressure.
Reed: Yeah, no pressure. And you know, we have a whole bunch of products that are lined up that we’re working on now, to be new products that we’re working on for 2018, which will further extend our capabilities into risk-based authentication, and to other areas, which I’m extremely excited about. And it’s just, as I said, this has been the most eventful year, 2017, in the nine years that I’ve been at ThreatMetrix, this has been the most eventful year that I’ve been here. And I’m hoping that at the 2018 Summit I can say 2018 was the most eventful year.
Armen: That’s right. Yeah. I think that’s great context. The big announcement being that ThreatMetrix isn’t the endgame, per se. It’s a milestone in our development. It will enable a lot of amazing things to happen with our customers. But there’s a lot more to follow. There’s more to follow from there. Well great. Well Reed, thanks very much for appearing on our program.
Reed: You’re welcome.
Armen: And thanks very much for your support.
Reed: Happy to do so. Thanks.
Armen: All right.