Tobi Olopade is the Strategy & Biz Ops Lead for Cash App + Afterpay at Block. Tobi was previously the chief of staff at Amount, a financial technology company that enables banks to accelerate their transformation to an enterprise-grade digital infrastructure. Before that he was a consultant with The Boston Consulting Group for the financial services industry, focused on operations, crisis management, and M&A.
As more and more customers are engaged in online banking, it’s important to provide a financial institution with a digital banking platform that delivers a seamless digital experience. Whether customers are opening a new bank account, transferring money, making a mobile deposit, or making a bill payment, the online banking experience needs to be secure and reliable. Amount is constantly working to provide a digital banking platform to financial institutions that contribute to the digital transformation journey, and meet the ever-changing demands of customer experience and expectations in the digital banking world.
He talked with Mike Sasaki, leader of the Mitek Systems global customer success team, about the increasing speed of digital transformation across the industry, where we are today with digital identity, and where we’re likely going.
Mike: The digital transformation of business has advanced so rapidly over the past year or so, Tobi. It seems sure we can’t go back to the old normal—is there a new normal shaping up?
Tobi: Yes, it’s certainly been a year. Goes without saying, 2020 was full of adversity and new challenges, not just for businesses, but for society at large. And this tremendous disruption has forced us to reexamine so many aspects of our daily lives—whether it’s QR codes for restaurant menus or the ways we schedule appointments and have meetings—we’re doing things in ways we hadn’t necessarily thought we’d be comfortable with. Digital has really permeated everyone’s lives. I hope the new normal will be a hybrid, with pre-pandemic elements mixed in with all the things that are changing, but I really think digital-first is here to stay—which, obviously, I think is a good thing.
That said, I’m very concerned by the acceleration in global inequality. The pandemic really shone a spotlight on how access to critical infrastructure and resources, like healthcare, digital technology, and education, can drive wildly divergent outcomes. A lot of people are struggling in America and abroad, and given the pace in today’s world, if you fall behind, it can be very difficult to catch up. I’m tremendously concerned about this, and digital identity—because it is becoming a key gatekeeper of access—will have to be part of the solutions we need.
How much have consumer attitudes changed? Is identity verification still thought of as causing friction, or is it now starting to be more associated with trust?
What we’re finding is that consumers now expect to be asked to complete some form of identity verification, and engagement with these tasks has been increasing over time. So that suggests there is a growing association with trust. Still, it’s important to understand that consumers want identity verification to take place as part of a great experience. They expect a clean, simple, intuitive user experience. So there’s always going to be a balance needed between low-friction and security. And to really nail trust, companies have to be very transparent and vigilant about their processes, who they’re partnering with and what digital sources they’re using.
Are you seeing more acceptance of biometrics for identity verification?
Yeah, absolutely. Tech leaders like Apple and Google have done a massive service for us by making biometric verifications a very common user experience. But it’s a two-edged sword for the digital transformation journey: Customers who are willing to use biometrics to verify their identity become massively frustrated when the digital technology doesn’t work the way it’s supposed to. There’s still so much work to be done to really make it seamless and intuitive for a wide range of applications.
What about biometric bias? Is that a concern for your clients?
It’s a very real concern. But I think the way to mitigate risk of bias is to make sure we’re not overweighting biometrics or any other of the identity signals we use. So while biometrics are a critical component and a valuable signal, we’ve developed a system that can use tons of other dynamic and contextual signals, such as device fingerprinting and even some legacy fraud prevention methods like KBA.
Sure, and I imagine that gives you a lot of flexibility around which mix of signals you use at different points in the customer lifecycle, right?
Exactly. As with all lenders, Amount and our bank partners are extremely focused on account opening, where authentication and reducing fraud are critical. That’s where biometrics are most useful to us. Later, as end-customers access the service to transact, we don’t have the same risk of account takeover fraud that other financial services face. I mean, fraudsters don’t show a lot of appetite for breaking into someone’s account and making additional payments on their mortgage. So biometric verification would be overly cumbersome for the value it would provide. That’s when we rely more on signals like device fingerprints and one-time passwords for the customer experience.
Let’s talk for a minute about regulations. Do you think regulatory change is driving some of the changes you mentioned in consumer attitudes toward identity verification? Or are changing consumer attitudes driving regulation?
I’ll say option C: It’s both, and also neither. Tech surges first and then typically regulation follows it—this is a pattern we’ve seen consistently in human history for decades, if not centuries. In today’s era, we’re doing more online, more of our data and documentation is online, we’re executing contracts online. But it wasn’t until we saw massive breaches of consumer personally identifiable information that regulations started to come into place. We’ve all heard Mark Zuckerberg's famous motto “Move fast and break things,” and there’s a bit of a celebration around the culture of disruption we foster in this country. But it’s incumbent upon us leaders in tech to carefully consider some of the tech we create unintended consequences. And, as we were saying, the field of biometrics, as well as other AI, are areas where we especially need to exercise tremendous caution and care. Because there’s a large potential for good, but also a large potential for tremendous impact for consumers. And I very much hope government regulators remain vigilant and prove to be up to the task of understanding the next wave of AI-based tech and helping us manage it.
What’s your thinking on the future of identity?
In recent months I’ve accelerated my thinking on this a lot. We’ve been seeing the explosion of online retail along with cryptocurrencies like Bitcoin and meme currencies like Dogecoin. Terms like blockchain and NFT (non-fungible token) are making their way into our everyday cultural lexicon. While all these developments may not have a direct relevance to identity, the fact that we’re starting to see mainstream consumer adoption around these different ways of transacting makes me feel like we’re moving toward a time when there will be a tidal wave of more creative applications and solutions in this space. So when I think of the future of identity, certainly it’s profoundly digital and inventive.
I mean the flip side of some of the concerns I raised about rising inequality of access is that tech also has the power to break down a lot of those barriers. There’s so much information available online now, so much knowledge that previously would have been gate-kept is now just fingertips away. And there are so many talented young people, much smarter than me, who are learning to code, creating software, building games. I don’t know if you’re familiar with Roblox, but that game has 8-12-year-olds designing and building worlds! The passion and determination I’ve seen from younger generations really makes me confident that they’re the architects of change who will use these digital tools and the internet ultimately to make a better world.
And do you think that the future includes consumers owning our own digital identities? There’s a lot of talk about this now—do you think it will become reality?
Yeah, I think that falls right in line with a lot of what I was just talking about. With NFTs especially as well as other digital collectibles, people are really starting to understand the concept of digital ownership. And when thinking about some of the problematic things in our daily lives, like the rapid rise of misinformation and perhaps the looming threat of deepfakes, the logical endpoint and solution is digital ownership. I think this is going to be the next wave of development and growth. And I think people if they aren’t already, will certainly become much more comfortable with the idea in the future.
What advice would you give to your younger self if you were entering the industry today?
I have principally a business background, but one thing I would do is to read and study more human psychology. At Amount our goal is always to build products that delight and best serve our clients and their consumers. But financial services is moving into a realm where it’s not good enough to just provide good products and experiences. From beyond good to great now requires deeply understanding your customer’s needs and wants—so not just which products they choose to use and how, but why. As I’ve gotten older, I’m finding that understanding more about human psychology--what makes us tick—is allowing me to layer so much more deep insight into everything we do and the products we build.