How to navigate digital identity in a changing payments landscape

Podcast transcript: Digital identity opportunities in the financial services industry

38mins 54sec | 13th Dec 2023

Speakers

Jochen Kaempfer, Matt Charpentier, Chris Warren

Chris Warren

In the not too distant past the topic of identity wasn’t all that complicated. For most of us showing a passport or birth certificate or driver’s license was all we needed for the handful of times we needed to prove we are, who we say we are. Sometimes utility bills were also required, and other times copies of university grades or performance reports were helpful not only to prove who we are but also to demonstrate what we did. Those paper documents are obviously still important, but the fact that we now conduct so much of our lives digitally has made identity a far more complicated issue. For example, a secure and widely recognized digital identity allows consumers to interact with financial services companies in a personalized way without fear of being victimized by fraudsters. But there are legitimate questions about the best approach to digital identity and how companies can take advantage of identity to build trust and provide value to customers.

This is Chris Warren and I’m the host of today’s podcast. We’re fortunate to be joined by two professionals who have thought a lot about digital identities, the problems and opportunities they present, and the potential impact on financial services companies, networks and consumers. With us today is Jochen Kaempfer – a Principal at EY-Parthenon practice at Ernst & Young. Jochen has a unique perspective on the challenges and opportunities around digital identities through his work helping financial services companies navigate the world of payments, everything from consumer payments to crypto and digital assets to product innovation and payments. Also with us today is Matt Charpentier – Vice President, Global Head of Authentication and Identity at Visa. Matt’s title tells you just how immersed he is in the nuances of digital identity. At Visa, Matt leads a team of over 30 product managers who build and scale authentication and identity products. This includes Visa Secure, one of the companies fastest growing products.

Now I’m eager to kick this conversation off so let’s start with some basics. In my introduction, I briefly mentioned digital identity, but I think it would be helpful to dig into some more detail about what we really mean by digital identity and how that meaning has evolved. So, Jochen, I’m going to start with you, how would you define digital identity and how do you think this is changing?

Jochen Kaempfer

I think digital identity, let’s break it into two parts. Let’s start with identity. If we were to ask somebody for their identity, they probably would give you their passport or their driver’s license, which is fine. However, if you were to ask somebody for, hey, tell me a little bit more about yourself in a different context, probably would get very different answers. If a doctor would ask that you probably would talk about your health history. If you were to ask somebody at a dryer salon about themselves, they probably would talk to you about their VO2 max and the recent races that they did. Or if you were to ask somebody on sort of social media who has a lot of followers, they probably would tell you about their latest video and then all the followers they have. So, I think identity is much broader than just my name, date of birth, where I live and so on. Also, that is probably the focus, especially in the context of financial services, it is much broader in terms of medical, you know, university, interests, hobbies; I think all of those things define identity, and I think, eventually, it will be part of what we could call a digital identity. The other part of that is obviously digital. I think that’s the easier part. Sort of moving away from paper-based documents towards the ability to say and prove who you are online, ideally without a lot of hassle, like doing this as seamlessly as possible, that hey, I’m Jochen, this is who I am.

Chris Warren

Great. Well, so, Matt, you have a particular lens about digital identity. I wanted to bring you into the conversation and have you talk a little bit about how you see its relevance in e-commerce and payments specifically.

Matt Charpentier

Thanks. Yes, within the context of e-common payments, I think the big change that we’re witnessing with digital identity is that we’re starting to see a differentiation in the level of assurance. As Jochen mentioned, digital identity is a relatively new thing and people are getting used to it and I think we’re also getting used to what do we need to prove to say with the right level of assurance that we are who we say we are online, and that is evolving. And I think people intuitively recognize that different use cases will require a different level of assurance. For example, sometimes just a clicky might be enough to conduct a transaction online, but sometimes you’ll want a higher level of assurance and you’ll want more to prove that you are who you say you are. And so we’re working on all those aspects of what is the right level of assurance that we need for each use case, for each transaction so that we get people where they need to be safely, securely and seamlessly. So, that’s really, I think, the thing that is evolving and the main factor that is coming into the picture with digital identity. When it comes to how we’re thinking about digital identity within Visa, we think about it along two dimensions – deterministic and probabilistic. What we mean by that is probabilistic is all about the data that we have and that you share so that we can confirm you are who you say you are. So, that could be device information, that could be things like your email address, your shipping address, that will help confirm that you are who you say you are. On the deterministic side, it’s more about proving with an irrevocable credential that someone has verified your identity and you can use that credential to prove that you are who you say you are. Both are needed, and to my point around level of assurance, depending on the use case and depending on the transaction you’re trying to conduct, we’re going to need more of the deterministic, or sometimes the probabilistic is going to be enough. So, those are kind of the dimensions that we’re looking at this under and the type of things that we’re thinking about.

Chris Warren

Great. Now that we have kind of that foundation, let’s talk about some of the problems and challenges associated with digital identity and I think it depends on who we’re talking about. So, Matt, I’m going to stick with you here for a moment and then bring Jochen back in. Can you go through some of the challenges you see for financial institutions, governments, networks, consumers, whatever you want to prioritize? But you kick us off and, Jochen, you can jump in afterwards.

Matt Charpentier

Right. So, as we just talked about digital identity is relatively new and so there’s still many challenges and a lot of things for us to figure out. I’ll start with the need for data. There is a very strong need for data when you transact online. I’ll give you a couple of examples. When it comes to financial institutions, and when it comes to consumers applying for lending online, the financial institutions need to make sure that you are who you say you are, that it’s not a case of identity theft, for example. Financial institutions also need to make sure that you’re allowed to open a loan or have a relationship with them, meaning they need to do KYC and AML monitoring to make sure that you’re not an individual that should not have access to financial services products. But they also need to understand your credit history, they need to understand a lot of things about you to make a decision on whether to grant you a loan or not. That’s a lot of data that needs to be collected safely, but also seamlessly. You don’t want to spend hours providing that data to apply for a loan online. So, there’s a very strong need for data and there is a strong need for good data. It’s the same for a bunch of other use cases. For example, if you’re trying to access government services online, the government needs to make sure that you are who you say you are and you’re not trying to commit fraud or access someone else’s account. So, there is a very strong need to make sure that you are who you say you are online, and that requires a lot of data. The challenge is that data is hard to come by, not all of it is digital, if you think about your birth certificate, for example. It’s a piece of paper, it’s not digital. So, not all the identity data that you have is going to be in the digital format. And even if it is, it’s going to be scattered all over. It’s going to be housed by government agencies, state and federal, by the credit bureaus, by a bunch of other institutions that have data about you but it’s not in one central repository; it’s across a bunch of different stores and a bunch of different entities. So, that requires a lot of coordination. And the data that is available may not always be vetted. It may not be always trusted and you may not know, as a relying party, how much vetting has occurred. And so, there is a need for standardization of the level assurance in the vetting process. So, all of that creates some friction to a seamless onboarding. Similarly, consumers are worried about privacy. That is becoming more and more top of mind for them because not all consumers are comfortable sharing a lot of data online; they want to know where the data is stored, how it is stored, what it’s going to be used for, who is it going to be shared with. And so, we see a very strong need for consumers to remain in control of their data and to have very strong privacy controls. So, that creates an interesting challenge where you need a lot of data. It’s not readily available. It’s sensitive data, so it needs to be protected from a data security and privacy standpoint. And so, we need to reconcile that tension between the need to have very strong controls, but also the need to have data widely available in order to allow you to conduct the transactions that you want to conduct. And so far, what we’ve seen in the ecosystem is that, we’ve seen a lot of solutions that address spot cases. There is a solution for account opening for financial institution; then there is a solution to access government websites. We haven’t really figured out a way to solve this at scale yet in a way that is interoperable and is adopted by most consumers. So, I think that’s going to be one of the big challenges ahead of us.

Jochen Kaempfer

Completely agree with Matt. I think that a lot of the data you currently get asked for, like it already exists somewhere, right, like your bank knows that you have a mortgage on your place and that you live there. Your employer knows that you work there. I think the big challenge is framing those things together, creating the standards around it, and putting the consumer in control of it. I think that that will be the trick, the challenge in it anyway.

Chris Warren

There are challenges but there are, obviously, opportunities, which is why we’re here talking about all of this. Let’s look at some of those. Jochen, I’m going to have you lead us off. But I think maybe the best way to frame it is to think of opportunities through the lens of different stakeholders and what do you see as the most significant opportunities and what needs to happen for companies and organizations to actually seize those opportunities?

Jochen Kaempfer

Good question. To your point around stakeholders, maybe let’s focus on too where this is the most critical, I think, that’s consumers and small businesses. For consumers, there are a lot interactions we all go through on a daily basis where we have to prove identity in a cumbersome way be it from account opening to taxes to checking your social security, all the way to, increasingly, if you’re a kid and you want to go to social media in some places, or if you have sort of medical history and want to share that with somebody else. So, clearly, a lot of need for controlling and sharing your identity information across a network of folks who are interested in it and with whom you want to share it. So, I think there is a meaningful opportunity there to make it easier for consumers to put them in control around this and to help keep the bad guys out. I think that one is super critical. And if you think about all the elements that are digital in our life now, identity really isn’t. You still run around with paper-based identity documents, you still need to print out stuff and get it stamped and get it certified and take it to someone else. Identity, really, in many cases, is very, very paper based, very old in that way. Very similar for small businesses – small, medium, mid-sized businesses – where they face similar challenges to consumers, which makes it hard. They aren’t such trusted in accords because, hey, is that business really who they say they are, are they legit, can I apply from them, do they deliver these things. There are a lot of questions around that. So, I think, especially for small/medium businesses and for consumers, there are a lot of needs to bring identity into the digital world. And I think this will unlock a lot of opportunity. One use case we talked a fair a bit about is digital assets, where at the moment, you don’t know who you interact with and that is somewhat built into the design of the system; but then, on the other hand, increasingly, there is a need for it. So, being able to prove who you are in a digital way, or at least to prove that you have certain rights to interact in that environment is super valuable. I think many other use cases and industries, if you add trust to it, if you add identity to it; a lot of the elements that are done today will be much, much easier and much less friction for. I think if you about the identity providers, the goal here is to help build and design the network, is actually the ability to interact, to provide the rules, to design the correct risk assessment system and make it as frictionless, as global, as trusted as possible.

Chris Warren

Right. Well, Matt, I’m going to send this over to you now. You have, again, a unique perspective and part of your job is, you know, seizing some of these opportunities around digital opportunity. How do you see it?

Matt Charpentier

I think one of the biggest opportunities in our world is preventing financial crime. Financial crime is a growing problem. Fraudsters are getting more and more sophisticated and more and more creative. And we’ve seen during COVID that a lot of them, our behavior has shifted online, well, fraudsters followed, and fraudsters are now very active in trying to steal your money. They’ve always been, but they’ve become even more active in the recent years, and we’ve seen a rise in new ways for fraudsters to operate. I’ll give you an example. It’s now very easy to transfer money, to do peer-to-peer transfers, to transfer money to someone else. It’s instant, it’s easy, it’s very streamlined. The challenge is that that creates a very big opportunity for fraudsters. And so, we see what, a rise in what we call authorized push payment fraud, which is when you think you’re sending money to someone, but you’re actually sending money to a fraudster. You may be a victim of a scam or there may be another way you got tricked, but by and large, you always end up sending money to a fraudster. That’s a very big issue, especially as payments become faster and more ubiquitous, a lot of people are falling victim to those new ways for fraudsters to steal money. And so, a lot of what I think digital identity can bring is safe and trust in the payment, and money movement space, and preventing financial crime. The tension is, as we talked about before, how do you create an experience that is safe and secure, but, at the same time, is also streamlined. Because it’s very easy to block fraud if you block everything, all transactions, or make it incredibly hard to move money around – that’s going to prevent fraud, but that’s also going to prevent the good transactions. And so, we need to find a way to balance the friction and the fraud. So, we’re working on a lot of things to try to bring digital identity into the payment space so that we can reduce financial crime and eliminate financial crime, but not at the expense of the customer experience, because that’s the other big angle that we’re working on – how can we streamline the customer experience. And I think digital identity is really going to help in that realm as well. We are going to be able to, not only make online experiences better, but we’re also going to be able to digitize experiences that are purely analog today. Going to the DMV is a very analog experience. I think there are examples like that where we’re going to be able to digitize experiences that are today painful, long and full of friction. And if we do that right, we’re going to do it in a way that is safe, secure and privacy preserving so that consumers know that their data is safe and they can trust that the transaction they’re trying to conduct is legitimate and they’re actually sending money to their cousin or to someone who need it and not to a fraudster. That’s the big opportunity that we’re working on. The other opportunity that is not necessarily directly tied to payments, but I think is a big one with digital identity is protecting vulnerable populations online. Age verification, for example, is a very big topic. We need to have a way to verify someone’s age online to make sure that the experience they have and the things they have access to are in line with their age. So, there are other angles around protecting people online that I think will be unlocked by digital identity.

Chris Warren

Great. Well, you’ve teed us up for where I wanted to head next. As an aside I will say that the potential to digitize the DMV process is something that I think would accelerate the use of digital identity beyond any of our imaginings because everybody knows what a miserable experience that is. Anyway, so, you mentioned age verification, and I wanted to jump in and talk through some of the trends that are shaping digital identity. I mean people who aren’t involved with this day-to-day will still see plenty of headlines that are relevant to the topic and I just wanted to dig into a few of them. Jochen, can you just talk a bit about age verification and what you’re seeing, because we’ve seen states in the US and there’s certainly deliberations in Congress, where there are attempts to age-gate access to social media. So, what are you seeing around age verification?

Jochen Kaempfer

Yeah, definitely, one of those hot topics at the moment and happy to talk about this given that we have a 10-year-old daughter. Age verification, especially for social media, seems to be one of those topics that a lot of parents can agree on, as well as politicians from different sides of the spectrum seem to be able to agree on. Maybe a little bit of context on where I think this came from. China actually started initiatives quite recently, not focused on social media, but on gaming. A lot of kids over there are spending a lot of time online playing games, spending a lot of money on those games actually as well. And the government decided that does not seem to be a good use of kids’ time to spend, I think it was like two hours a day or so on gaming. They asked those companies to put mechanisms in place to limit this. What they did over there was, in essence, you need a real name sign up, this gets matched against government data bases, you need something equivalent to your social security number and then there’s facial recognition. So, if you play on your parent’s account or under your friend’s account who is 18 years old, you will struggle to get around it. Now, similar schemes here coming up in US with certain states putting those elements in place. I guess how it’s implemented in the US is a little bit different. You see the social media companies mainly relying on flagging accounts, as well as on elements like AI, for example, if you wish somebody happy 10th birthday, they might have a problem and sort of similar things. So, it’s far less invasive, but probably also at the moment far less restrictive as a result of this. The other interesting thing that is happening there is a lot of the social media companies sort of arguing that the age verification should probably be done at the device level or at the operating system level, i.e., not in the app, but much more in the app store on the device that sits around this. Interesting to see where this goes. I think at the moment you could imagine a world where this looks very similar to sort of interacting with your bank, with sort of full-on KYC type activities, or you could imagine a world where this sort of stays reasonably soft and maybe some accounts get flagged, but keep, probably, smart enough to get around those sort of things. So, quite interesting to see where this goes and how severe the restrictions will be.

Chris Warren

Great. Well, Jochen, I want to stick with you for a second. There’s also, you mentioned China, but in the European commission, I know they issued a new digital ID for people to prove their online identification. What sort of impact is that having?

Jochen Kaempfer

Maybe so a little bit of context around this. Europe and a couple of other countries sort of have dabbled in the identity space for a while. I think the first identity initiatives are like almost 10 years back. And now, with COVID and other things, they are pushing with eIDAS 1.0 and 2.0 for much more of a sort of a shared identity. The idea, as you can imagine in Europe, is a lot of things already flowing rather freely across borders within Europe, sort of free movement working everywhere and so on. With COVID, obviously, they care much more obvious that there are some limitations. Like, for example, if you take a job passport over to Portugal, open a bank account or rent a car or sort of just live your life there; things are becoming a little bit complicated. The idea in Europe is to create some scheme that is cross border where you can essentially passport around with your identity data, but then, especially, health care and educational focus. The other two things to note here is it is not just consumers, it’s consumers and business, specifically on the small business angle. The European Union is not sort of attempting to push out or aim to operate the scheme if that makes sense, like what we’ve seen in many other countries. What they are trying to do mainly is to sort of set the rules. They want folks to create the scheme and it has to be interoperable. It has to be decentralized SSID type. Ideally sort of in a wallet, but the idea is to have this interoperable. So, your portkeys identity documents can be used in Germany, can be used in Poland and vice versa. That is the idea there and I think quite interesting, quite fascinating to see where this goes. I think the current predictions or the current uptake numbers don’t seem super rosy, but I think the idea behind and sort of the model and the problems it’s trying to address are quite a way to go.

Chris Warren

Well, Matt, I want to bring you back in. What are you seeing around passwordless authentication that’s gaining a lot of usage and attention?

Matt Charpentier

Yes. I’m very excited about this one. We’ve been talking about retiring passwords and getting rid of passwords for decades now, but I think we’re finally about to make it happen. We’ve seen a lot of developments in recent years that give me hope that we’re actually about to get rid of passwords for real this time. I think one of the big changes is the rise of biometrics and biometric-enabled devices. Now, most of our phones are biometric enabled, whether it’s fingerprint or facial recognition. You have an ability to use biometric on your phone, most laptops are biometric enabled; so there is a ubiquity of biometric-enabled devices. In parallel, consumers have gotten used to using biometric for authentication and that is now pretty well adopted within consumers. We’ve also seen the rise of standards to make sure that the biometric authentication is safe and standardized and interoperable. So, we’ve seen FIDO create standards on how biometrics can be used for authentication and those are getting traction. Now, we’re getting to the next phase with things like passkeys that will enable us to finally get rid of passwords. I don’t think it’s a next year thing, but I think we’re finally about to really hit a turning point where we’re going to be able to conduct most of our transactions online without the need for a password. I don’t think it’s going to completely go away, but I think for most transactions we’re going to be able to complete it via biometric or some other passwordless authentication. The other thing that I think is going to help us in this journey is the number of items that are NFC enabled. What I mean by that is there is a growing number of items, physical items out there in the world that have a near-field communication chip embedded, and that can be used to verify your identity online. For example, most passports now have an NFC chip and most phones have an NFC chip as well, and so it’s easy to see how in the future a passport can be tapped on the phone to verify that you are who you say you are and prove your identity. Similarly, credit cards have a chip in them and that also could be used to confirm your identity and conduct transactions online. So, I think the rise of biometrics, the rise of technology, like NFC, along with the rise of standards is going to create the conditions for us to finally get rid of passwords and move to a much safer space. And the reason I’m excited about this, and the reason it’s good news, is because 1) passwords are cumbersome and they’re hard to remember and so people tend to default to having the same password across many websites. We all know the pitfalls associated with that from a data security standpoint. It’s really not safe and it’s really not providing us with the level of assurance that we need. So, getting rid of passwords, I think, is going to be welcome for both the consumer experience, as well as the safety of online transactions. So, I think we’re about to see a pretty big change here and I’m very excited about it.

Chris Warren

Yeah. Well, as a consumer, I would certainly, certainly welcome that. And just trying to remember passwords is a real pain. Matt, I’m going to stick with you. We’ve talked in some general terms about a lot of trends and some of the insights and opportunities, but I want to take advantage of your presence here and have your really talk through, you know, in, as specific a way as possible, how Visa’s approaching digital identity and kind of the rationale behind your strategy.

Matt Charpentier

Yes. So at Visa we’re working to create the tools, solutions and frameworks that will enable a safe, secure and seamless experience so that Visa continues to be the best way to pay and be paid. That’s really what we’re after. So, tactically the way that we’re going to do that is along two dimensions. The two dimensions that I mentioned earlier, which is deterministic and probabilistic. On the probabilistic side, it’s about better leveraging the data we have to secure commerce. Because when you transact online, obviously there is a lot of data that is being exchanged between the merchant, the bank, the network … and so, what we’re doing at Visa is making sure that we gather all the data we need to make sure that the transaction is safe and secure. So, we want to ensure that the person submitting a transaction is who they say they are and that they’re an authorized user of the account. And so, we’re collecting data from merchants at the point of sale to ensure that, for example, it’s a device that we’ve seen on a network that we’ve seen before so that we don’t need to put you through additional verification if you’re trying to conduct a transaction that is low risk, we don’t really need to do a lot more than confirm that it’s something that fits your pattern and is something that does not raise any red flags. A lot of what we do in the probabilistic domain is really about using the data that we have and the data that is available when you conduct a transaction to secure the payment experience in a way that is, frankly, invisible to the consumer. That’s really our main goal. We want the vast majority of transactions to be completely seamless, but at the same time secure. And so, that requires us to leverage a lot of that background data and to make sure that we have very robust capabilities from a modeling standpoint, from the device intelligence, so we’re building all those capabilities so that your transaction will go through without any incremental step up, or without any friction, because the vast majority of transactions will be low risk. Now, we realize that not all transactions will be low risk, and that probabilistic may not always be enough. And we’re working therefore on deterministic identity, or reusable identity. And there what we want to do is play our role as a network, because fundamentally, Visa is a network, and when you think about digital identity, digital identity is a network very similar to a payment network. In the digital identity network, there is a relying party that will use the reusable identity, and then there is an issuing party, which will issue your digital identity. It’s very similar to a payment network where there is a merchant and there is a bank that issues your credential. And so, what we want to do in digital identity is very similar to what we’re doing in the payment network space where we’re essentially creating the rules, the frameworks, and the conditions that establish trust and interoperability at scale. So, what we’re doing with deterministic identity is really put all those conditions in place so that we can see digital identity scale in a way that is interoperable, in a way that is safe and standardized. So, we’re working on standards. We’re working on products and functionalities. We’re working on establishing rules, and we’re working with the Visa system in general to make sure that digital identities can be used in the context of payment and that it’s a very seamless integrated experience. At a high level, that’s what we’re focused on in the digital identity space. To summarize, our goal is for the vast majority of transactions to be silently authenticated through the use of data and very advanced machine learning models, but in a way that is completely transparent to the consumer. And for use cases that require a higher level of assurance, we’re working on creating a digital identity network that will be interoperable, safe and standardized.

Chris Warren

Great. That’s a great blueprint for people to understand, you know, just where you’re headed and some of the thinking behind it. That’s really interesting. Jochen, what else are you seeing across the industry? What do you see as innovative and worth watching?

Jochen Kaempfer

Yeah, let me start off by, it’s sort of one of those topics where, in our firm, a lot of our clients are dabbling in it or playing in it. So, you see, obviously, payment companies very interested in it. You see FinTech’s really interested in it. You see banks, certain geographies, especially where banks have sort of a meaningful market share on the consumer side dabbling in it. You see telcos in many places around the world trying things out. And then you see governments pushing it. So, it’s a topic that people come at from a variety of really different angles with slightly different perspectives on it, but pretty global, pretty fascinating. A couple of things that we’re seeing, maybe let me phrase it as sort of the big questions that I think we’re seeing. One if the idea of how centralized vs. decentralized is this going to be. This I think is quite interesting. I think a lot of more recent push around decentralized identities where you have a lot of parties that contribute to it essentially vs. something that is centralized and sits in the middle. And the other I think big question is is it going to be government led vs. private led. And a lot of the digital identity schemes in existence at the moment are government led in certain countries, but focus in most cases on sort of government type services, like launching your tax returns or getting benefits. I think the new initiatives we see, and we spoke about the European one before, is sort of a partnership similarly to the government defines the rules around it, essentially defines the scheme and then the private sector fills it in and ensures operability between it so you don’t just have one provider, but you have many and you can sort of move around quite freely. I think those are sort of the interesting themes around it. I think the other one that we haven’t talked to much about here yet, and obviously this is probably going to be very much US audience, but in other parts of the world, there are a lot of people who do not have any meaningful identity at all. So, they don’t even have sort of the paper based one, the physical one. And I think there is a lot of opportunity to provide them with identity documents, which will be, for them, the access key to a lot of services that the folks on the call here probably consider as pretty normal, i.e., banking, getting a loan, health care, access to government services and so on. So, I think there is a massive, sort of billion plus opportunity around the world with providing identity to folks who currently don’t have it.

Chris Warren

We’re running up on time here and I want to have a little fun here at the end. I’d like to, I’d like both of you guys to take out your crystal balls and give me a sense of where you see digital identity heading over the next year or two. Jochen, do you want to start and then Matt jump in?

Jochen Kaempfer

Let’s do that and we’ll listen to this podcast again in three years and then see how good we were. Let me start by sort of big picture. I truly believe that identity will be digital and reusable in the near future. I doubt that we will keep going to banks and government agencies and others with a bunch of documents and photos that have been signed on the back of it. I struggle to imagine this. The other sort of crystal ball one, and this is sort of speaking with our folks in the crypto and digital asset world, I wonder whether that will push it because they really, really need it. So, if you think about CBDCs that are happening, and country stablecoins that are happening in countries, the inability of certain players to interact in the crypto world because they need to be sure that their counterparty is not on any sort of bad list (blacklist); they are really needing a solution that looks and feels very much like digital identity. I wonder whether, if we get together in three years/five years whether from that angle it got pushed very much and that if that is sort of one of those trigger use cases that drives all of us having some sort of digital identity that we own and that we can share, that may be.

Chris Warren

Great. Matt, how about you?

Matt Charpentier

I don’t know if it’s a crystal ball or just a hope, but I’m really, really hoping that in the next few years we’ll get to a place where digital identity becomes a reality in a way that makes it a lot easier for us to transact online. What I mean by that is I would love for us to be at a place online where our identity verification processes are similar to what we do in the physical world. Because if you think about it, in the physical world, you conduct most of your life without needing to prove that you are who you say you are on a constant basis. You don’t need to log in in real life. You don’t really need to prove your identity in the physical world. There are a few instances where you need to pull out your driver’s license and prove that you are who you say you are, but the vast majority of your life is conducted very seamlessly. I want that online. I want to be able to do everything that I need without constantly needing to log in, to remember a password, or to prove that I am who I say I am. I’m very hopeful that in the next few years we’re going to be in a place where most of your transactions online will be completely seamless, with no friction; and for the few transactions that are higher risk, then there is a very easy, standardized way to prove your identity. I think that would be a win. And in the process, if we can make the physical world better, and if we can, to what we talked about before, if we can remove the need to go to the DMV or the need to pull your driver’s license at all in the physical world, then it’s a double win. I’m hoping that’s where we’re going with this.

Chris Warren

Great. Well, we’ve reached the end of our time here. I want to thank Jochen and Matt for really insightful and great conversation. You’ve left me with some hope that the opportunities will overwhelm the challenges here and I won’t have to go to the DMV ever again, which would be a great thing. And it would be wonderful to also travel without having to lug around my passport and risk losing it, just bring my phone and be on my way. So, this is really a great topic and great conversation. So, thanks to both of you. And I want to thank everybody for joining us here as well, and I hope you all have a great rest of your day.