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The Payments InstituteJuly 21-24, 2019 • Emory University, Atlanta GA
The Internet of Things
Hector SandovalVice President, Product Line Leader
Early Warning
2
• What is the IoT?
• How did it come about?
• What does adoption look like and how fast will it grow?
• What type of issues could arise?
• How should financial institutions protect themselves as they adopt this movement?
AgendaAgenda
The Mobile
Majority
Consumer adoption of
mobile devices and mobile
applications has changed the
nature of interactions
Market Trends
Internet of
Things (IoT)
Digital behavior across
devices, channels, products
and services shape a
consumer’s risk profile
Faster Money
Movement
Faster money movement is
key to enhanced consumer
experiences, and requires
real-time fraud/risk
protection
Fraud
Evolution
Millions of fraud signals
requires fast data analysis to
keep consumers and financial
institutions safe
Market Trends
The Internet of Things is big….and getting bigger!
28 billion devices will be connected by
2021Source: Aite Group, The Internet of Things: An Information Explosion, May 2017.
Device connections are
growing at a 27% compounded
growth rate vs. 3% for others
IoT will change the payments
ecosystem significantly
What is the Internet of Things?
Internet of Things (IoT)
Internet of Payment
Things (IoPT)
Machine-to-Machine (M2M)
The number of devices connected to the internet grows each year:
• 7.6 billion people today
• 25 – 50 billion by 2020
Source: www.comsoc.org/blog, Ericcson Mobility Report 2016
How many devices will people have?
How many devices do you have?
The number of connected devices is expected to grow at 12% CAGR over the next few years
People are becoming more interested in connected devices
Mobility
Telematics and fleet management
Tracking and remote monitoring
Condition-based maintenance
Insurance
Usage-based insurance
Telematics for insurance
Insured asset management
Retail
Automated checkout
In-store analytics and promotion
Inventory optimization
Healthcare
Proactive and connected monitoring
Early detection and diagnosis
Remote measurements
IoT will affect our lives and businesses in many ways
The emergence of the connected home
40.3mm Smart Homes
Revenue per home$146.54
Adoption 2018 – 32%2022 – 53%
Revenue $19.8mm
Source: Statistica 2018
No cash, no grocery list, no problem
https://www.youtube.com/watch?v=NrmMk1Myrxc
Insurance rates based on how you drive, when you drive, and how much you drive
Usage based models will
decrease risk and costs for
both consumers and insurance
companies
Connection to sensors in
vehicles or on devices worn by drivers can
reduce risk
New Insurance products to
meet specific demands
https://www.youtube.com/watch?v=neJmbMIis3Q
Health Insurance and IoT
• Users must use a wearable fitness tracker – Fitbit or Apple Watch• Company provides incentives for healthier living• Company provides rewards for reaching goals – gift cards, discounts
https://www.youtube.com/watch?v=TdBIjWnKaY4
Your doctor is with you wherever you go
With all these connected devices helping us, is there a downside?
How should Financial Institutions embrace this trend?
The mobile majority
Digital identity
Faster money movement
Customer experience
Account takeover
Token takeover
Malware
Social engineering in contact centers
Market Trends and Threats
Continuous Authentication
Friction-free transactions• Limit friction to the consumer through
active and passive authenticators proven to help reduce fraud
• Platform-based authenticators enables you to turn on additional authenticators with minimal implementation
Exposed information and data breaches are not going away:
• More than 6 billion data records have been compromised since 20131
• The majority of consumers only use a handful of username and password combinations across their online relationships1
• Bank accounts are increasingly opened online and on mobile devices2
• ~75% of cyber attacks are attempting to steal your customers personal information3
Sources: 1 Moving Beyond the Password: Consumer Views on Authentication” March 2017 Aite Group. 2 Aite Group, “Application Fraud Rising as Breaches Fan the Flames,” March 2016. 3 RSA Quarterly Fraud Report, Vo11, Issue 1, Q1 2018
Authenticating throughout the customer lifecycle
HIGH-RISK ACTIVITIESCONTACT CENTER
Mobile app login
Portfolio cleanup
ACCOUNT INTERACTIONS
Updating contact information
Mobile device bindingNew account applications
NEW CUSTOMERS
Mobile wallet card provisioning
Passwordlesslogins
Password resets
Click-to-callInbound contact center authentication Outbound contact verification
New account funding
• Is this the same Digital Persona you have previously “bound” to?
• Has another FI seen this device or phone number?
• When and what was the interaction?
Confidence in the “Digital Persona” of the Consumer
Best in class digital authentication requires a multi-layered approach
Network layer:
MNO intelligence
Persistent mobile alias
Software layer:
Device intelligence
Hardware layer:
Device bind to certificate
Software layer:
Browser intelligence
Who is Early Warning?
A bank-owned, privately-held
fintech company founded in 1990
OWNER BANKS
Bank of America, BB&T, Capital One, JP Morgan
Chase, PNC Bank, U.S. Bank and Wells Fargo
COMPANY ACQUISITIONS
WJM Technologies, Austin Logistics,
Authentify®, clearXchange®
LOCATIONS
Headquarters in Scottsdale, Arizona
Locations in Chicago, San Francisco and Tempe
Our Company
24
Diversified Product Suite, Broad Customer Reach and Strong Talent Base
OUR CUSTOMERS
Early Warning® serves 43 of the top 50 financial services companies and over 2,500 customers directly and indirectly, including financial institutions, government agencies and payment companies. The Zelle Network® moved 433M transactions totaling $119B in 2018.
BANKS &CREDIT UNIONS
RESELLERS CONSUMERS(P2P NETWORK)
GOVERNMENTAGENCIES
OUR COLLEAGUESEarly Warning continues to attract the brightest minds inrisk management, technology and data science, and currently employs almost 900 colleagues in four offices nationwide
UNIQUE GOVERNANCEWe are 100% owned by Bank of America, BB&T, CapitalOne, Chase, PNC, U.S. Bank and Wells Fargo. Our operatingrules define provisioning and use of data contributed toEarly Warning
LEGAL STRUCTUREEarly Warning is a specialty consumer reporting agencyand is regulated by the office of the comptroller of currencyand the bureau of financial protection. Our legal structure designed to accommodate risk, fraud and anti-moneylaundering product development
QUESTIONS?