How can digital identity unlock value for fintech startups?

The recursive: What is Identyum and what digital identity problems does it solve?

Tomislav Bošnjaković: Identyum is a provider of digital identity and operates a strong digital identity. Our team has a lot of experience in the finance and banking industry where proof of strong identity is essential, especially if customers want to get services online without going to branch offices. Our goal is to provide citizens and natural persons with strong digital identity solutions that they can reuse. Currently, we have many KYC solutions on the market, which allow users and businesses to prove someone’s identity online. However, a person has to do it over and over again for each company and this causes a lot of friction. In addition, it is time-consuming and costs a lot of money for companies to integrate all the technology needed to do it properly.

Such complex technologies and solutions are something large banks and companies can afford, but small and medium-sized ones cannot. They basically lag behind because they cannot afford the same technologies as their larger competitors. Our solution gives citizens their own digital identity card or ID wallet, which they can use to access the services of companies from various industries – not just banking, but also telecom, car rental, hospitality, events, etc.

And on the other hand, companies can use our technology to onboard customers with only the friction of the costs that they would pay if they wanted to do it themselves. We have calculated that over a five-year period we guarantee approximately 60% lower total cost of ownership for a company.

Moreover, once a person has created his or her digital identity card, he or she can use it outside the B2C segment. It is a use case in the dating and P2P marketplace industry, where one person can identify themselves to the other. Another good example would be the gaming industry because we all have accounts on different platforms. Another benefit of this so-called centralized identity is that if a person changes something, such as their address, they don’t have to change it on 50 different websites.

There are many elements that go into creating a digital identity, such as medical records and financial history. Can you name all the elements that make up one’s digital identity?

Identyum is a PSD2 licensed provider and can connect to any bank in Europe to get account information for a person. This means that a verified IBAN or someone’s financial capacity or score can also be part of their identity. When it comes to medical information, it is valuable to store all your medical data so that you can have all your records ready any time you want a second opinion or a medical check-up.

What matters is that only you can control who has access to your data. Every time someone wants to read something from your wallet, you will get the notification that a certain company or person wants to see a certain type of data about you and asks for your consent.

How was the idea of ​​Identyum born?

For a couple of years, our current team worked for a Swedish FinTech, which was a data aggregator from banks. This was before PSD2, so we had to connect to banking APIs to extract account information for a person. The biggest problem was identifying that this account belongs to the same person. Then we realized that KYC is a big problem that needs to be solved, especially in the digital era where no one wants to go to branch offices and instead expects a 24/7 online service.

This is how the idea came about. When we started in 2018, digital identity was a concept that did not exist. For example, if someone were to type “digital identity” into Google, they would get different things about KYC. The interesting thing is that in less than 2 years the EU realized the necessity of e-ID digital identity. In fact, there is a draft regulation that will create a framework for ID wallets and issuing ID cards in a digital way. What we want to become is one of the pioneers in Europe, who will address this new regulation and offer that kind of service on the market.

Are you currently working to enable the digital ID vision of the EU?

We are already part of some of the early adopter programs such as The European Blockchain Association, which aims to create a verification system for university diplomas. As a private company, we are part of such programs as technology providers. We keep a close eye on everything that happens in the EU regarding digital identity, as we neither want to miss an opportunity nor move too quickly in relation to our customers’ expectations.

At what stage of development is Identyum now, and what traction have you gained so far?

We were founded in November 2018 and the first major milestone for us was in autumn 2019 when we became a PSD2 licensed service provider. For us, this was a great achievement because we were the first such company in South-East Europe.

We started the development in the first year and a half, before we received investments from EU grants. At this point, we still haven’t raised any VC capital. However, we have paying customers including the neobank that I mentioned, pension funds, crypto exchanges and other companies that need KYC and multi-business holdings.

In terms of traction, we are proud that a global neobank chose us as their KYC and electronic signature provider in Croatia and Slovenia. Later we partnered with a reliable service provider in Croatia, which issues digital certificates. They rely on our identification technology to issue electronic certificates to their residents. So basically, citizens don’t need to go to any branch offices to get certificates anymore. At the moment, what we want to do is to become one of the recognized identity wallets across Europe and to offer our services to all EU citizens.

How did the Visa Innovation Program help you grow?

Considering how much competition there was before entering the program, we were flattered to be among the 16 selected companies. The workshops with industry experts and mentors really helped us prepare pitch decks for potential future investors and connect us with potential partners from Bulgaria and Greece.