Encouraging Equity in FinTech | Non-daily
Illustrations by Joy Smoker
17 January 2023
Partnership to expand the use of mobile ID in banks illustrates innovations underway at the FinTech Innovation Hub
Mobile devices, online banking and payment apps such as Apple Pay or CashApp have reduced the use of paper currency, but what if the technology could also help safely and securely verify identities to bring services to the underserved?
That’s exactly what the engineering, business and financial technology (aka fintech) experts at the University of Delaware and the new FinTech Innovation Hub at the university’s Science, Technology and Advanced Research (STAR) Campus hope to achieve. One of the first examples of the effort is a project currently underway to develop a new application for the use of mobile identification in banking and notary services.
Led by UD’s Nektarios Georgios Tsoutsos, an assistant professor in the Department of Electrical and Computer Engineering, the project is a partnership with IDEMIA, the developer of the Delaware Mobile ID app, and supported by funding provided by Discover Bank to The Venture Center, an Arkansas-based contractor support organization. The team aims to use about $250,000 in funding to pilot a project with a Wilmington-based credit union to develop a secure way to virtually open a bank account with mobile identification.
“The challenges surrounding economic health are complex, and it will take diverse approaches and talent to make an impact,” said UD Provost Laura Carlson. “The IDEMIA collaboration brings UD students and faculty expertise to these challenges and represents an incredible model of partnership for the FinTech Innovation Hub and its mission.”
In the first state, the Delaware Division of Motor Vehicles is the only entity currently using Mobile ID services, which allow people to use an electronic version of a driver’s license through a phone app instead of carrying a paper copy. Tsoutsos said that by expanding the use of Mobile ID for local banking services — such as opening a new bank account outside of normal business hours — they can also expand access and safely simplify the banking process for those who might not otherwise have access to these resources. due to working hours or transport barriers.
“This type of technology can help provide access to banking services for people who may not have had it before, and help notarize a document for those with limited means of transportation or time to travel,” said Matthew Parks, vice president of CRA and retail banking at Oppdag Bank. “That’s why we provided funding for the project and worked to connect companies in the area to work through test cases.”
Tsoutsos said that while it is possible to open a bank account today from a phone or computer, there are potential security issues. Banks don’t always trust the credit report-driven questions and answers — like the requests that ask a person to choose an address they lived at previously or the make and model of a car they once owned. But they trust the Department of Motor Vehicles.
“We are proud of the fact that Delaware was one of the first states to pilot and launch Mobile ID,” said Jana Simpler, director of the Delaware Division of Motor Vehicles. “We look forward to seeing many positive results from IDEMIA’s partnership with the University of Delaware’s College of Engineering as they develop a prototype demo web application that continues to expand dependent party integrations and provide more ways for Delaware residents to protect their identity during online transactions.” “
Tsoutsos, with the help of three PhD students and a master’s student, is building the web application, which will most likely be used on a mobile device, but could also be used on a desktop or laptop computer. The application is complex, he explained, because it must include a lot of cyber security and advanced cryptography to ensure that the driver’s license data is completely safe.
“Everything will have multiple layers of encryption,” he said. “Not even we on the server will be able to access this information online.”
The application could also be useful in the digital exchange of legal documents, such as those used by mobile notary services, Tsoutsos said.
“This project is a great convergence of IDEMIA’s industry-leading work in digital identity and our work on behalf of financial institutions and payment processors,” said Hal Wiediger, senior vice president of client success at IDEMIA Identity & Security. “Delaware should be proud to be an early adopter of this technology as they work to improve the customer experience through the development of this prototype. Having use cases that prioritize security and convenience go a long way in increasing adoption of [Mobile ID]and we are proud to work with the University of Delaware on this exciting project.”
The project is also an opportunity to showcase ways companies can work with the Ministry of Foreign Affairs to develop various financial technologies, said Parks and others.
“This project is a perfect model of what we’re trying to do,” said Mike Bowman of the Delaware Technology Park on the STAR Campus. He described the FinTech Innovation Hub as a “trifecta” that takes the academic excellence in engineering and business from UD faculty and students and applies it to a financial equity problem while engaging corporate partners.
The university, in collaboration with its stakeholders, aims to create a “national center of excellence” with a focus on financial equity, explained Tracy Shickel, UD assistant vice president for corporate engagement. This means that representatives from industry, government and academia work together to find solutions to complex fintech problems.
“This will be the first of many, many opportunities, especially between UD faculty and external supporters,” she said. “We’re trying to move the needle on the nation’s economic health crisis, and we have the talent to do it.”
