Digital Identity Companies Getting Gobbled Up

Digital Identity is red hot. And large companies are rushing to acquire technology companies that can bolster their defenses.

In December 2016, American Express purchased InAuth, a mobile device authentication company, to provide the automated service on the Accertify platform.

And just this week, Relx, the British publishing group turned analytics company bought ThreatMetrix for a whopping $871 million.  Relx has steadily been beefing up their risk and analytics capabilities and plans to integrate the technology with LexisNexis who provides authentication with public records to many lenders, banks and companies across the world.

ThreatMetrix boasts a pretty incredible client base – 1.4 billion unique online identities from 4.5 billion devices in 185 countries. It analyses over 100 million transactions per day across 35,000 websites from 5,000 customers.   Nice score for Relx.

ThreatMetrix strategy to move from a “Device Authentication” conpany to a “Digital Identity” seems to have paid off big time.

Digital Identities Rapidly Gaining Traction

The trend of digital identities was something Maryann Miller and I predicted earlier this year as a major trend in 2018 so the acquisition of ThreatMetrix is not a surprise.

Social Security Numbers suck. The growth of Digital Identities is one of the most significant technology trends in the world today and promises to end our reliance on it.   Whether it is digital driver’s licenses, digital credentials on mobile devices, or digital cloud passports this is the trend in fraud prevention to keep your eye on.

The UN and World Bank have launched an initiative to provide everyone on the planet a legal ID by 2030.   In the UK, the government launched a digital identity program in 2016 and Australia launched it’s own digital identity program in 2017.

In 2018, digital identities will gain more adoption.  With the recent data breaches the government and companies are looking for better ways to identify consumers.  And anything has to be better than a dumb social security number, right?

More Acquisitions on the Horizon?

Two companies that have to be loving life right now are Iovation and Payfone.  Both of these companies are rapidly growing and would be interesting acquisitions for bureaus and other fraud and risk platform providers.

Payfone authenticates 50 million transactions a day for Fortune 100 companies – they have to be attractive.

Iovation, on the other hand, ranked number 1 in device intelligence above ThreatMetrix, InAuth, and many others.   I am sure other companies would be eager to get their hands on the technology and rapidly growing client base.

Frank McKenna is the Chief Fraud Strategist for PointPredictive and a Fraud Consultant based in San Diego California