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The COVID-19 pandemic sparked a dramatic rise in online activity, including online purchases, learning and financial transactions.
With the spike in internet traffic came an increase in internet fraud, and, on the other side, more use of fraud prevention technology.
Jumio, an identity verification technology vendor, is among the fraud prevention companies seeing a boost in business due, in part, to COVID-19.
The vendor, based in Palo Alto, Calif., recently raised $150 million in funding from a single investor, private equity firm Great Hill Partners. With the investment, the firm will join Centana Growth Partners and Millennium Technology Value Partners on Jumio's board of directors.
In an interview after the March 23 investment announcement, Robert Prigge, CEO of Jumio, discussed the new funding and how the vendor plans to move forward.
Prigge also highlighted how COVID-19 affected Jumio's business and the company's strategies to keep up with digital fraud and money laundering. Jumio built out its anti-money laundering technology last year with the acquisition of startup Beam Solutions, a vendor of an anti-money laundering platform.
What is Jumio planning to do with its new $150 million investment?
Robert Prigge: We're really excited about it. Really, the use of proceeds is going to be around four different key areas. Number one is the acceleration of our AI and our automation for our product called Jumio Go.
Number two is the expansion of our KYX platform. Normally, the word is KYC, 'know your customer.' We call our platform KYX because it's 'know your anything.' So, we'll be expanding those capabilities.
Number three is broadening our AML [anti-money laundering] platform. Then, number four is redoubling our efforts around sales and marketing. As we continue our global expansion -- we're already extremely global -- there's still a bunch of verticals and geographies that we've yet to get into.
What can we expect in terms of a roadmap for Jumio's AI capabilities? Can we expect any new updates or announcements in the coming months?
Prigge: Sure, especially since this investment helps accelerate things, I think we'll be announcing some things in the fall.
But make no mistake, we are releasing new functionality on a daily or weekly basis, practically. A lot of the new things are about expanding and deepening fraud coverage. There are new threats around, things like deep fakes, which are very sophisticated digital image manipulation.
When it comes to AI and machine learning, there's a saying that 'the most data wins.' We've verified well over 300 million identities worldwide. This year alone, we're on track to do about 150 million transactions. We're able to use that data to train our AI and machine learning.
So, I think those will be the kind of core things that you see -- acceleration of those developments.
That's a large number, 150 million transactions. Have you seen a boost in business due to COVID-19?
Prigge: It's kind of complicated, but absolutely COVID has had a very large impact on things. The number one thing that it's done is it's made all business contactless, all business remote.
As companies go online for their business, the very first problem that they run into is trust. How do I establish trust and know who I'm dealing with?
Robert PriggeCEO, Jumio
Not only have our traditionally strong verticals of things like financial services, or online gaming and gambling or travel have done strongly, but, additionally, there's a whole ton of new verticals of things like telehealth, where we're powering some of the largest healthcare companies in the U.S.
Then there are COVID passports and delivery services, because now everyone's getting food and drink delivered to their house. If you deliver alcohol, you need to make sure you're not delivering to a minor.
There are digital wallets, car and scooter rental, the sharing economy, and even things like social networks where we're being used to verify people remotely. Identity is now a must-have for basically every industry, and as people are going online, they need to figure out who people are. That's what's really driving the growth, I think.
So, COVID has opened new verticals for Jumio?
Prigge: I probably say accelerated more than opened up. But things like healthcare and telehealth, absolutely dramatically expanded, because now everyone gets it, and everyone is comfortable with it.
Things like the COVID passport obviously didn't exist before COVID. Then things like the delivery services we were already working with, but it's just gone up exponentially, because so many more people are delivering food and alcohol to their homes now.
I think it's basically opened up virtually all verticals, to varying degrees, and really accelerated things. Then let's not forget -- my children are here home with me today attending school -- education and remote learning, where when people take tests, you need to verify that it's really them. COVID-19 is really permeating all aspects of business life and home life.
There have been reports of an increased number of fraud cases over the past year or so, largely, it appears, because people are making more transactions online. What is Jumio doing to make the number of cases tick downward?
Prigge: t's a couple of things. In my mind, it's not only about catching fraud, but also deterring it.
You're right; that data absolutely supports the notion that because so much business is going online, that now fraudsters are testing all of these online platforms. What we're seeing is, in our case, reliance on next-generation technologies like biometrics, where you're looking at facial geometry and areas like authentication, using biometrics in liveness detection, to make sure that you're dealing with a live human being instead of just a photograph that they took from your Facebook profile or a video recording or something like that.
Then there are things like account takeover and identity theft. There have been absolutely more attempts of it over the last year or so. But there's also other areas like money laundering.
So, it's not just about the onboarding, where we can catch the fraudsters. It's also, after you've onboarded, about looking out for things via transaction monitoring, screening them for PEPs sanctions, which is politically exposed persons, and basically just doing ongoing monitoring of those people.
Editor's note: This Q&A has been edited for clarity and conciseness.