With Covid-19 and its impact on global businesses and economies straining everybody’s mind, here’s a dash of some much needed positivity!
In this GlobalFinTechSeries interview we have Michael Cutlip, President and CEO of Authoriti join us and one thing he shared during this conversation struck a chord:
“While the global economy will take a hit this year, it will recover faster than many believe and alternative capital will remain keen to invest in strong concepts and performers, given the return potential.”
Catch the complete story to unlock some interesting thoughts and insights on the changing fintech market and especially tips on how to reduce fraud and scams during a time such as now, where there seems to be an increased threat given the need for remote work and more online collaboration.
Can you tell us a little about yourself Michael? How has your journey in the Finance/Banking industry been so far, given your years at HSBC – we’d love to hear about your biggest highlights from your time there!
Thanks for the opportunity to speak with you today! Yes, prior to joining Authoriti, the majority of my career was with the HSBC Group. One of the great things HSBC offers is the opportunity to take on different roles, and the experience of living in Chicago, Hong Kong, and now New York was great for my family. As for highlights, whether winning a long-sought mandate while in a business development role, designing and implementing internal programs to improve efficiency, or managing assets in the principal investments business, it is always exciting working with colleagues to make the bank better.
Read More: GlobalFintechSeries Interview with Arcady Lapiro, CEO and Co-Founder at Agora ServicesWe’d love to know how Authoriti is helping companies secure their email chains to prevent redirection of funds from scams – especially given the current world situation and rising cyberscams being witnessed during this Covid-19 outbreak.
Payment scams take many forms, ranging from simple phony invoices to Business Email Compromise (BEC) strategies where criminals use phished data and deception to initiate bogus wires or redirect legitimate payments. Despite being rather simple scams to run (perhaps because of it), the FBI reported that BEC losses in the U.S. totaled over $1.75 Billion in 2019. There is concern that bad actors will take advantage of the distractions caused by the rapid shift to remote work sites, and what we hope is an equally rapid return to business at speed. Authoriti was formed to create new ways to prevent identity theft, fraud and the misuse of data. Our app allows users to originate content-rich Permission Code PINs embedded with both identity and transaction details. Users simply submit a PIN with their transaction request. Businesses receiving a pin can e-validate it with Authoriti and execute the transaction with confidence. Whether it’s a bank releasing a payment, an accounts payable manager processing an invoice, an insurance company paying a claim, or a trust company changing settlement instructions, if the request includes a valid Permission Code, then the transaction can be trusted.
Can you throw light on some of the latest innovations in finance/fintech that have helped reduce fraud while increasing overall security and compliance of payment/banking systems?
AI-driven guidance and decisioning has to be on the list, but I have to say that we believe Authoriti’s flip of the transaction approval model is right up there. Think about it. The evolution from User IDs to Passwords to KBAs to remote tokens to texted OTPs, to FIDO2 PINs, and then combinations of these factors is simply the application of incremental technology to an ancient challenge/response model, one used by sentries on a castle wall long ago. Putting definitive transaction control in the hands of the customer, allowing them to generate their unique permission at anytime, anywhere and distribute it through any channel is big. I’ll add that Authoriti’s focus on transactions clearly builds on investments made in identity. The use of biometrics to authenticate to your device may not be the newest, but I still think it is one of the bigger improvements in security and efficiency. PWs simply don’t stay secret and they are a pain.
Could you share some best practices for B2B teams to ensure better protection from Identity Theft?
Authoriti’s website currently has a quote from our founder Lou Steinberg, “Identity Theft is two words. Everyone focuses on Identity. Authoriti prevents the Theft.” You clearly have to get identity right at onboarding, but it’s the misuse of that identity that causes loss. We’ve been thinking about issues companies are facing during these unprecedented conditions. For example, companies around the world are ramping up and supporting hundreds and thousands of home-based employees, many for the first time – and as I mentioned, fraudsters are waiting to capitalize on the chaos. When setting up or resetting the password, public email and phone calls simply can’t be trusted. Confirm identity and validate that the action is authorized before it is executed. That is a simple but vital practice.
How according to you will the fintech segment shape up in the next couple of years, given the constant innovations and investments in certain areas? What do you think this landscape will look like in future?
Full speed ahead. While the global economy will take a hit this year, it will recover faster than many believe and alternative capital remains keen to invest in strong concepts and performers given the return potential. As you note, there has been tremendous investment in technology focused on security and efficiency gains, capitalizing on all things cloud and mobile. Payments is one of the better examples, but it is just one. There are many exciting innovations and entities to come. InsurTech is in the wings. Picking up on your earlier question on compliance, the growing global focus on data privacy will drive investment into that space to clarify and simplify the way in which consumers ‘consent.’ I’ll just highlight that owners providing consent for their information to be processed is just another form of transaction authorization. Yes, Authoriti is working on data sharing solutions.
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Could you talk about some of the other innovative fintech apps and platforms in the banking and payment industry that according to you are set to be new game-changers for this niche?
One of the innovative institutions I am following closely is Cross River Bank in New Jersey. From traditional community banking roots, Cross River has partnered with a number of fintech companies in complementary origination and financing relationships. Concurrently, Cross River has been developing a service platform for third parties to use across a suite of products and services (ala payments). It is a very progressive, still relatively small bank that I think has a great hybrid model to work with and take advantage of fintech innovators.
We’d love to know what some of your top FinTech predictions for 2020 are? Given the current world situation, how do you see it impact the evolution of fintech?
Unfortunately, a lot of predictions and forecasts are changing right now. A large number of institutional budgets are going to be pared back given lower rates and higher losses, forcing a prioritization of spending. Within those priorities, I could see a growing focus on risk management and internal cost-saving automation initiatives over items that are more CX-focused. Improving customer experience is still very much in every banks’ plan, but it will likely take a lower priority for a bit. In the longer run, the crisis is driving home the benefits of a mobile workforce. I would expect more investment going into products and services that support worker flexibility.
Tag (mention/write about) the one person in the fintech industry whose answers to these questions you would love to read!
Given Authoriti’s focus on transaction security, I would like to hear how Brian Krebs would answer your questions. His Krebs on Security blog puts him on the front line of security trends.
Your favorite FinanceTech quote
I was listening to The Who over the weekend, and their song “Going Mobile” caught my ear since many of us here in New York are longing to be mobile now. However, the idea is spot on – just about everything should be mobile.
We’d love to know what some of your future plans are for Authoriti.
The ability to embed transaction details in a user-originated PIN, totally independent of central servers, opens a number of new solutions we are developing. Beyond enhancing the security and efficiency of payment transactions, we are rolling out an innovative application of our technology in the customer service industry; imagine callers being immediately routed to the correct Customer Service desk without any IVR prompts and challenges or any KBA questions, and the Representative knowing the confirmed name of the caller and the reason(s) for the call prior to connection. I mentioned privacy and data sharing earlier; Permission Code PINs can delegate authorization to third parties. Data or asset owners can generate a PIN which includes the name of the third party who is authorized to access information or physical goods from a service provider (examples include sharing medical records, giving data aggregators permission to collect information without disclosing passwords , as well as granting access to an apartment, a safe deposit box, or a rental car).
Thank you for your time Michael!
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The Authoriti Network was founded in 2017 to identify new approaches to prevent misuse of Identifiers and Personally Identifiable Information. The company’s founders have significant leadership experience dealing with InfoSec at-scale in the world’s leading financial institutions. Authoriti develops the Authoriti Permission Code® platform, which puts control of transactions in the hands of the consumer and gives institutions the confidence that the transactions are authorized.
Mike Cutlip is the Chief Executive Officer of The Authoriti Network, Inc., founded in 2017 to eliminate fraud and data privacy risks by letting customers easily and securely authorize any transaction. Cutlip has more than 30 years of experience across a range of roles in the financial services industry, the majority at HSBC Holdings plc. As COO of the Global Banking and Markets’ Banking business in the Americas, Cutlip led teams delivering and improving HSBC’s business management, credit, operational and enterprise risk, and regulatory and financial crime compliance initiatives. Cutlip holds a Bachelor of Science Degree from Iowa State University and a Master of Business Administration from The University of Iowa.