For the third year in a row, OWI has put together a list of our top predictions for 2019. Some are ‘sure bets’ while others are a bit of a stretch. Feel free to email us to tell us your predictions for 2019.
1. Facebook announces another big data hiccup…to limited impact
Facebook makes headlines again in 2019 with another high-profile mismanagement of user data, with the outrage dying down sooner than expected. While Facebook user growth plateaus, loyal Facebook users remain undeterred by headlines as a sense of fatalism sets in regarding monetization of social media data. Despite continued calls for their ouster, Mark Zuckerberg and Cheryl Sandberg remain at the helm of HMS Facebook, protected by Zuckerberg’s continued control of a majority of Facebook’s voting shares.
2. Smartphone sales begin to decline globally, as mobile identity has a breakout year
With the global smartphone market beginning to reach maturity, and upgrade cycles in developed markets lengthening, the monetization of mobile identity data will take on a new focus in 2019. Companies like Drawbridge, Boku, and Payfone are well positioned for this era of smartphone ubiquity, as the primary access to smartphone identity and carrier billing data becomes increasingly valuable.
3. Identity verification and document authentication companies go bank or bust in 2019
Increasing reliance on smartphones as a customer onboarding channel and decreasing tolerance for friction continues to drive demand for document-based onboarding solutions in the U.S. Globally, growing smartphone penetration, increasing global acceptance for eKYC, and a continued lack of reliable access to high-quality identity data sources are leading international players to rely on document scanning for KYC. Mitek, Acuant, Au10tix, Jumio are poised to benefit from a surge of interest in leading document verification players, as larger identity players consider acquisitions to plug holes in product roadmaps.
4. IAM companies are forced to evolve as enterprise cloud providers give it away for free
IAM is the “free shipping” of cloud computing, a feature that consumers were originally accustomed to paying for but have since expected for free. Okta, ForgeRock, and Ping found success growing alongside their customers, repeat success with the next generation of startups may be difficult as these companies IAM needs may be met by free offerings. Expect IAM players to begin offering additional value-add services.
5. The US (attempts) to establish national data privacy standards
OWI expects continued pressure from across industries to harmonize US data privacy regulation, as businesses seek to avoid complying with a patchwork of 50 different state laws. Federal legislation establishing “GDPR-lite” standards will be proposed, but fail to gain the bipartisan support required for passage. In the interim, states will continue to fill the regulatory void with patchwork efforts across jurisdictions.
6. Behavioral biometrics catch on and become the must-have technology for any risk team
A steady drumbeat of consumer data breaches in 2019 will continue to lessen consumer faith in the ability of traditional password-based authentication methods to keep their accounts safe. A digital-only bank will be the first US financial institution to implement completely “password-free” login flows. Save “death of the password” pronouncements, as the username/password combination will continue to remain relevant for billions of global users despite continued adoption of continuous authentication technologies.
7. The flood of sharing economy company IPOs will require faster, cheaper, and more complete background screening
Demand will continue to grow for the ability to perform “real-time” background checking on mobile applicants to sharing economy platforms. OWI expects to see the increasing use of artificial intelligence and machine-learning technologies to supplement human grunt work and decisioning.
8. NYC becomes the new epicenter of the global identity industry
At the end of 2018, we saw a flood of Big Tech interest in NYC with Amazon’s announcement of HQ2 in Long Island City, as well as Google’s multi-billion dollar building purchases to double its staff in the City. Big Tech brings better talent at a time when droves of techies are leaving and/or looking to leave the Bay Area because of the high cost of living. Washington, D.C., Berlin, and Singapore will also become major hubs.
9. Data breaches will happen at the same frequency despite advances in technology and awareness
Cybercriminals will continue to see success in 2019, primarily as a function of the sheer size of the attack surface requiring defense. While FTC penalties and oversight will increase in the US, market forces will continue to be the primary enforcement mechanism in the US as breached companies shed billions in market capitalization. Overseas, the EU will see the first major enforcement action under GDPR as a global tech giant faces a multi-billion dollar fine over data processing and breach notification failures.
10. The gap between more and less advanced risk and security teams continues to grow wider
Having already moved beyond vulnerable technologies such as knowledge-based authentication and SMS OTPs, organizations on the vanguard of risk and cybersecurity will be well-positioned to implement the next generation of endpoint security and behavioral biometrics technologies. Lagging organizations will continue to fall further behind, as earlier failures to adapt to a changing cybersecurity threat environment compound the time and resources required to get back up to speed.
11. Amazon gets in the banking game
Amazon continues to spool up its entry into financial services while AVOIDING obtaining a bank license through either a de novo application or acquisition of a licensed US bank. OWI expects Amazon to continue to “nibble around the edges” of financial services by offering small business lending products through regulated bank partners, and alternative consumer payment options through closed-loop payment systems. This presents a unique choice for big banks in 2019: strike deals with Amazon to be the “dumb money” behind their regulated financial services offerings, or band together to fight the encroachment.
12. Alternative credit scoring goes mainstream
As emerging markets continue to gain wealth, investor demand to service these markets higher value goods and services will force financial services providers and payments companies to get creative. New services, such as UltraFICO, are already paving the way for new methods of credit scoring.
13. Aging digital infrastructure keeps aging
The Tech industry’s call for the Federal Reserve to build a new real-time payments system, against bank opposition, builds momentum for improved digital infrastructure.
14. Specific tech niches clamor for regulation and identity companies stand to benefit
Gatwick’s recent drone mishap highlights the need for regulation to help the industry continue growing. Solutions to drone registration will require improved identity management. This won’t be confined just to the drone space, but any area where regulatory ambiguity remains a barrier to scale.