Fintech Leaders
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Rodger Desai, CEO of Prove - The Billion Dollar Firm Building the Future of Identity Verification Using Smartphone Data
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Rodger Desai, CEO of Prove - The Billion Dollar Firm Building the Future of Identity Verification Using Smartphone Data

Miguel Armaza interviews Rodger Desai Founder of Prove, one of the leading global companies in identity verification. They serve 1000+ corporations, including 9 of the top 10 US banks.

This article is part of Fintech Leaders, a newsletter with over 65,000 builders, entrepreneurs, investors, regulators, and students of financial services. I invite you to share and sign up! Also, if you enjoy this conversation, please consider leaving a review on Apple PodcastsSpotify, or wherever you get your shows so more people can learn from it.

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Rodger Desai is the CEO & Founder of Prove, one of the leading global companies in identity verification and fraud reduction.

Founded in 2008, Prove serves over one thousand corporations, including 9 of the top 10 US banks, and has raised around $200 million from Wellington, Oak HC/FT, Apax Digital, Mass Mutual, AmEx, Capital One, Verizon, and a long list of funds and impressive angels.

In this episode, we discuss:

Why KYC processes will become nearly free in the near future

“Our view is that KYC, while super important, there will come a day, I don't think very far from now, where it will be table stakes and essentially free.”

According to Rodger, the current industry focus on mitigating fraud and security concerns is consuming substantial resources, yet money laundering and financial suspicious activities are still on the rise. The industry has historically operated on a fear-based model, heavily scrutinizing every transaction to catch fraudsters and driving up costs. This approach is inefficient, especially in a world where the vast majority of transactions are legitimate. In a more ideal scenario, technology should be able to handle identity verification seamlessly and accurately, much like how we make phone calls without needing to identify ourselves every time. And as the KYC industry gets further automated, we’ll see a dramatic reduction in manual intervention which could drive down costs significantly. In theory, by reducing the burden and resource-suck associated with fraud prevention and compliance, companies should be able to reallocate resources to their core customer functions.

Using cell phone and telecom data to reduce scams and improve identity verification

Prove places a strong emphasis on accuracy in identity verification, focusing on deterministic methods rather than probabilistic ones. By leveraging phone numbers and their associated metadata as a primary means of verification, Prove eliminates the guesswork and ensures that the identity claimed by an individual is indisputably linked to their phone number, making it virtually impossible for fraudsters to impersonate someone else. This method has proven so effective that Prove now has an enviable record in identity verification accuracy.

Implications of AI-powered fraud

One of Rodger’s most critical concerns around AI-driven fraud is AI's ability to convincingly replicate human interactions and personal details, which can easily deceive traditional security measures. For instance, an AI-powered attacker could use publicly available information to impersonate a trusted employee, mimicking conversations about personal topics like favorite sports teams or family members to gain trust. This model of verification worked in the past, but with current levels of fraud sophistication, it means that probabilistic methods, which rely on likelihoods and patterns, are no longer sufficient. Instead, deterministic approaches, such as cryptographic keys and direct authentication linked to immutable data points (like phone numbers), are more essential than ever to counteract these advanced threats.

How Rodger keeps his own data and digital identity safe and away from bad actors… and a lot more!

Critical security functions should be separated from everyday communications. To protect his data, Rodger uses a dedicated phone number solely for two-factor authentication (2FA). This number is not associated with his primary phone, thus reducing the risk of SIM swapping and other forms of identity theft. Additionally, by using a carrier without a call center, he further minimizes the avenues through which attackers can manipulate or hijack his phone number. The fact that he even needs to do this, only highlights the need for better security measures systemwide, as the reliance on SMS-based 2FA is vulnerable to exploitation.

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Miguel Armaza is Co-Founder & General Partner of Gilgamesh Ventures, a seed-stage investment fund focused on fintech in the Americas. He also hosts and writes the Fintech Leaders podcast and newsletter.

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