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Transcript:

Daniel Newman: Hey everyone. Welcome back to another episode of the Futurum Tech Podcast. I’m your host, Daniel Newman, CEO of The Futurum Group. Excited for this interview series conversation. I’m going to have Christophe Van de Weyer. He is the CEO of Telesign joining me today. We’re going to be talking about digital identity trust. And because no one’s talking about AI, we’re going to talk about AI.

It’s great to have this episode. This is a topic that if you are out and about, if you’re shopping, if you’re a consumer, if you’re a business, if you have data to secure, if you’re worried about your customers and their data and their privacy, this is a show that you should be tuning into.
Without further ado, let me welcome our guest for today. Christophe, welcome to the show. Thanks so much for joining me.

Christophe Van de Weyer: Thanks, Daniel. Great to be here.

Daniel Newman: It is. It’s great to have you here. So you’re recent, you’re pretty recent to the appointment of CEO at Telesign. Give us the quick background. What was the journey that took you here and brought you to this new role as Chief Executive at Telesign?

Christophe Van de Weyer: Well, I’ve been, actually before I was almost 19 years at Bain & Company. I was a partner there in their technology practice, mainly active in Europe, working across the board. I think I worked over 15 different countries, advised many companies over there. And then I joined Proximus Group three years ago where I was responsible as COO for the Enterprise Business Unit. So basically serving telecom products and IT products to B2B customers. And I was also managing the seven ICT subsidiaries that Proximus Group bought over time, active in cloud security and smart networking, and now very happy to have moved to LA, sunny LA. The sky is much more blue than in Belgium where it is much more gray. And very happy to lead the Telesign in this exciting new journey for the firm.

Daniel Newman: Well, it’s a great opportunity and while I’ve worked with the Telesign organization prior to your arrival, it’s been great to watch since you’ve come on board. And let’s dig in a little bit into where things are heading here. One of the things I think is really interesting that you guys are working on is you do something called Telesign Trust Index. And the company’s really been paying a lot of attention to what are consumer and customer expectations on digital trust. So you’ve been doing this index, you’re really kind of trying to pay attention to some of the trend lines around what people are expecting as we see every trend line from generative AI to increased e-commerce and spend, to basically of more of our day, every minute of our day, Christophe being spent online. What are consumers saying and seeing as it pertains to digital trust?

Christophe Van de Weyer: Well, it’s kind of interesting. We had some counterintuitive facts coming out of the survey. Most of the people think, of course, that it’s more your grandparents or parents or the elderly people that are most subject to fraud. But actually what we saw is that it’s the young generation, and everything depends on how you of course define young. But let’s say the segment between 25 to 45 is actually the most vulnerable and hit by fraud. And even millennials are four times more likely to get hit by fraud or cyber crimes than others.

So that was quite counter intuitive to what most people think. But on the other hand, it’s also logical because that’s the segment that is most confronted with online behavior, that is spending most time online. That’s the true correlation actually. And that younger segment, if we can say so, is spending three hours plus online and subject to more fraud. The other thing which was striking was that although majority of the people think they will be subject or that there’s a higher risk to be subject to fraud, actually half of the people say they are not protected well enough or they don’t pay enough attention to it or don’t take enough measures to protect themselves. So it’s a real paradox. Majority believe there will be more risk, but majority also believes they’re not protecting themselves enough.

Daniel Newman: Interesting. Interesting. Well, first and foremost, I don’t know about you and I don’t know how many children you have Christophe, if you do, but I have three that span from 22 to 7, and my oldest was born in an era where I didn’t have an iPhone yet, and she actually made it all the way to middle school without a phone. My second one made it late to elementary school and my now seven-year-old son’s probably going to have a phone before he gets to third grade, but three hours a day, first and foremost, I think that’s probably the least, that’s probably what they spend at night before they go to sleep. And then it’s three hours in the morning and then three hours during school. I always say, I said to my daughter, my high school age daughter, I’m like, “Why are you texting me? Aren’t you in math class?” But I think it’s also indicative of how connected we are now.

And every time we’re online, whether that’s on social media apps, whether we are browsing the internet, whether we are sending emails, whether we are responding to offers, and as we see retargeting in different ways that companies are getting closer to consumers. Every one of those is a opportunity for one, a brand to create trust, and two, an opportunity for a bad actor to create risk. And so the number of opportunities, and by the way, I think the youth are almost, they’re almost empirically trustworthy of everything. And I mean that they’re so just used to every digital experience, every experience being digital, every email that comes in, I sometimes laugh about the things that my kids don’t see as phishing. So I think it’s a very interesting finding to your point, because I think sometimes, I don’t want to say older people are more suspicious. I don’t want to be that general, but I do think that some of us that have been around a little bit longer have grown wiser to the fact that not everything that goes online is necessarily done with the best intent.

What about you though? So I’ve given you a little bit of my, I call it editorial there on my own life and what I see. But what do you think? Are there any reasons that you feel from the work you’re doing at Telesign that maybe consumers are feeling this way and kind of these paradoxical, somewhat paradoxical responses?

Christophe Van de Weyer: Yeah, we don’t have really facts on it, but we can have some hypotheses. One is that people sometimes feel just powerless. They say, “Whatever I will do, I will always have a risk to be hacked or be subject to fraud.” So it’s like a feeling of powerless, indeed. The other thing is exercising. Everybody wants to muscle up or lose weight, but when push comes to shove, actually you don’t put enough effort into the process. So that’s another factor. The other one is password fatigue. So many sites, so many different parameters or criteria to have the right type of password that there is just a fatigue on the topic. But another factor that I believe is really interesting in the data, and that’s then more based on data, is that 94% of the customers don’t think it’s their responsibility, but actually the responsibility of the company, of the digital player, of the enterprise to protect them from fraud. So actually they are putting almost the responsibility at the enterprise level rather than at themselves.

Daniel Newman: Which is interesting as well. But I mean, if you think about the buying journey Christophe, and you think about when you go to the store, right, whatever part of the world you’re in, but if you walk into Target or Aldi or whatever, you do expect that if you bring your goods to the front of the store, the register checks you out and you give them your credit card that transaction’s safe. And people largely, and I know there was a breach at one time with Target that got a lot of attention. But overall, it is interesting because if we really talk about what we like to call the sort of frictionless experience, or we call it omni-channel, why do consumers have to take on more risk for the convenience of shopping online? Maybe it should be the retailer. I don’t know. Given this perspective in your mind at Telesign, what are you telling the enterprise to do to build trust?

Christophe Van de Weyer: Well, the first thing is we say, okay, take that responsibility at heart and you can be selfish on it as an enterprise, because actually taking responsibility for fraud prevention or protection is actually building trust with the customer. And building trust with a customer actually will pay off because the most trusted brands are also the most strong brands. So actually, I believe it’ll truly pay off for enterprises to take it at heart. Also, enterprises should never assume that the customer has taken all the steps that are necessary to protect themselves. So there needs to be an implicit assumption of the enterprise of the digital player that they need to take all the steps that are needed, being on hard passwords, multi-factor authentication. It’s really they need to take it at heart and not assume anything on that side.

And actually, we go at Telesign quite far on the matter. No later than a few months ago, we launched the Breach Data Offering where we would scan, really when you enter, for example, your phone number for a one-time password, we actually instantly, real-time, will scan the dark web to see if that phone number has been breached or not. And we can then play that back. We put a timestamp on that breach, and it’s then up to the digital player or the enterprise to judge if there should be a bit more friction in the process there. And some extra authentication steps should be made to avoid the fraudster coming in.

Daniel Newman: So it seems that you’ve done some really good work, Christophe, in terms of building an ability to understand the risk associated with a phone number. One of the things that I’ve noticed at least has been a real uptick in different authentication layers. So for instance, when I’m logging into my instance of Salesforce, I use an authenticator app. So every single time I log in, if I know my password or not, it doesn’t matter, but I still have to go into an authenticator. We talked about multi-factor. There’s passkey systems that basically, you create kind of a master, then it creates a whole bunch of randoms. Those have also had some issues. There’s been some hacking of those systems I think in the past, not actually too far back. Is the password going away? Whats sort of Telesigns overall viewpoint on all these new systems and then the traditional password and what’s going to happen in the future?

Christophe Van de Weyer: Well, personally, I would love to have less passwords than the passwords to go away, because I always have difficulty with it myself personally. And indeed, the passkey systems are on the rise, and you see different types of them. It’s going from face or fingerprint recognition to authentication applications, but it has also some challenges. First of all, not every consumer or user wants to grant access to their biometric data. Not everybody wants to download the authentication application. Actually, we are also a worldwide company, and we see not all the users have a phone that supports biometrics or fingerprint recognition, or just simply your battery can die.

So basically there will remain a world for passwords. And actually, I believe that the future is to bring the right authentication methods to the right customer at the right time. And that’s for me, the future is that you can, as an enterprise, and with the help of Telesign, actually identify for that customer, this is the right authentication application or method.

Daniel Newman: So let’s go down the AI path for a minute.

Christophe Van de Weyer: Yup.

Daniel Newman: AI, generative AI, hot topic. Probably the biggest topic of 2023, expect this to be the biggest topic of 2024. Not everything’s Gen AI, meaning that there’s things that are just traditional AI capabilities. A lot of security capabilities will be more traditional AI than generative, although you can definitely see generative applications for things like passcode. You can see black hat applications for generative for sure. But what are your sort of thoughts that tell us something about how AI can play a role in rooting out and reducing the risk and improving outcomes as it relates to fraud?

Christophe Van de Weyer: There’s actually two major ways in which AI can help us. First of all, AI can really help us in identifying, like I said, the right authentication method for the right customer. Is it through the fingerprint or biometrics, or do we need to still use the traditional one-time password that is maybe most appropriate for that type of customer? So that’s the first type of application, the right authentication method for the right customer. But then also there is an omni-channel application for AI. Actually, AI can determine what is now the right channel to deliver the one-time password. For some customers are segments, it’ll be SMS, traditional SMS. For others, it’ll be WhatsApp. For others, it might be RCS. So I truly believe in an omni-channel world where it’s important to determine the right delivery method or channel for the right customer. And actually, at Telesign, we’re currently investing a lot on multiple aspects. One is that what we call the smart routing engine, which is really putting intelligence in determining the right delivery channel, but also working channel by channel. We added email and we are constantly improving our different channels like RCS, Viber, et cetera.

Daniel Newman: So Christophe, I hear what you’re saying about your vision around AI, but I’m always interested in the take of people in your seat. How are you looking at the capabilities of Generative AI versus just AI as it pertains to working with your customers and building your product?

Christophe Van de Weyer: That’s actually a very important and a very good question. I think there is a difference between Gen AI and AI. Of course, we all know Gen AI for creating content and interacting in natural language. And I predict that Gen AI will be used a lot more by fraudsters in the future to really make the phishing emails or messaging even better across multiple countries, and it’ll become much more difficult for humans to depict or distinguish between a phishing email or message and a true one. So that’s really on Gen AI one of the applications that fraudsters will use and which is a real threat.

On the other hand, we have the more traditional AI and machine learning, which is very important for us because what we are actually trying to do at Telesign is always increase the number of signals we are using to assess the level of risk of a certain phone or a potential transaction. So what we see is, in the beginning, we used the phone ID where we can say, “Okay, has this been sig-swapped or it’s now logging, the signal is out of Belgium, and traditionally it’s out of LA,” but we are adding more and more signals. The email, is this email typically associated with that phone? Yes or no? The IP address is the IP address and the location consistent with the signaling of the phone. So adding more signals is key for the future, and you need machine learning or traditional AI to really process all that data.

Daniel Newman: So Christophe, let’s pull all of this together.

Christophe Van de Weyer: Yeah.

Daniel Newman: Let’s talk AI, let’s talk trust. Let’s talk consumer versus enterprise responsibility. Let’s talk about multi-factor and future password technologies. What’s the perfect state, the nirvana, may I call it, of this industry, of this market in terms of dealing with fraud? Is there a perfect future state that we can get to that really reduces this, or how are you recommending it to your customers, partners, and of course the industry?

Christophe Van de Weyer: Yeah. Well, the nirvana, I always like to look at it from a customer perspective, and actually it’s a world where there is appropriate friction, we call it, where actually upfront we can identify this type of customer actually has very low risk and should go as soon possible, as fast as possible throughout the customer journey. It should be smooth, easy, without almost any step in the process, that customer can be onboarded or create his account or reset the account. While for a fraudster are much more risky customers, we can adapt the journey building additional steps, and so build appropriate friction. That’s for me, the nirvana, where upfront we can identify which customers are safe, are good, and should go very fast through the journey and others where we need to add as much steps as possible to be sure it’s not a fraudster. That’s, for me, the nirvana and all that happens in a smooth and anticipative way.

Daniel Newman: Well, Christophe, it’s a very important topic. I think pulling together the growth of digital adoption in every part of our consumption and consumer journey has only created more and more risk. And so companies that can come into the market and can provide meaningful solutions as well as understand the need to continue building low friction, engaging platforms while also being able to deliver safety to the consumer, and of course that safety that transcends to the enterprise in which they’re consuming from. I appreciate you joining the show, and I hope maybe sometime in the next year we can have you back on.

Christophe Van de Weyer: Thanks for having me. It was a great conversation. Thank you.

Daniel Newman: All right everyone, hit that subscribe button. Join us for all of the episodes of the Futurum Tech Podcast interview series. This was a great conversation. We talked digital trust, AI, security fraud, and so much more. But for this episode, it’s time to say goodbye. We’ll see you all later.