InterviewFintech Interview with Rick Song, CEO and Cofounder of Persona

FTB News Desk FTB News DeskJune 14, 202219 min

Identity sits at the core of helping fintech companies stay compliant with both KYC and AML regulations. Rick Song shares the importance of identity verification for fintech companies.
Rick Song, CEO and Cofounder of Persona

Rick Song is the CEO and Cofounder of Persona, the identity infrastructure company offering businesses the building blocks to create a personalized identity verification experience for any use case. Founded in 2018, Persona’s mission is to be the identity layer of the internet. Today, it is backed by Index Ventures and Coatue and serves a wide range of industries with customers including Square, Robinhood, Sonder, Brex, Udemy, Gusto, BlockFi, Coursera, and AngelList.

1. What led you to start Persona?
The catalyst for Persona grew out of conversations I had with Charles Yeh, our CTO and co-founder, back when he and I were roommates. I was at Square at the time, working on identity and underwriting. Charles was at Dropbox working on the company’s data infrastructure.

We both saw that companies were treating IDV (identity verification) as a one-off transaction, not as a step in an ongoing relationship. Companies were using different tools and methods—often manual, time consuming, and error prone—to verify identities, without tailoring the process to each individual, which often resulted in a poor user experience.

We thought: what if we built an identity infrastructure that could be customized for all use cases and types of businesses—from payments platforms to e-commerce companies to marketplaces? And that was the birth of Persona.

2. Tell us about your solution. What is identity infrastructure?
Every business needs to verify that the individuals, or the businesses, they interact with are who they claim to be. For example, Coursera has to verify that the person taking a test and getting a degree really is the person whose name is on the diploma or transcript. A payments company like Square needs to be sure that the person logging in has not stolen those credentials. A marketplace vendor selling liquor needs to verify buyers are over 21. I could go on.

But this is a hard problem to solve because both a person’s identity evolves—as a person ages, builds a career, builds their credit score, etc.—and a company’s risk appetite changes with time. Identity is sometimes dependent on factors like local regulations—EX: buying liquor online.

Persona tackles this problem by offering an end-to-end platform for customizing the identity process. It achieves this by combining active, passive, and third-party data and signals to help businesses verify and know who their customers really are. This gives businesses the flexibility to tailor the experience and friction for their customers, while taking into account the risk the business is willing to take on. For example, the process to verify an individual within a business varies depending on the use case—whether onboarding for the first time, making a large withdrawal, or trying to unlock a user account.

3. What challenges do fintech companies face when verifying their customers?
Consumers have moved many of their day-to-day transactions online due to the pandemic. For many, the thought of going into a physical bank to deposit a check seems archaic today. And that’s just one minor example.

This continuous shift to online is creating a number of issues for fintech companies. For example, all fintechs have to comply with KYC and AML requirements wherever they do business.

Identity sits at the core of helping fintech companies stay compliant with both KYC and AML regulations. And as I mentioned previously, identity is a very complex problem to solve that requires a flexible and tailored approach. Think of a stock brokerage that needs to open accounts for foreign investors who don’t have a Social Security number. The organization and individual in question are subject to FATCA (Foreign Account Tax Compliance Act), but the company may not have the processes or the technology to use other types of identification to verify the individual, like a passport.

4. We understand identity can be complex. Can you explain to us the different use cases your customers deal with?
I mentioned the obvious use cases, like verifying an identity when an individual wants to make a bank transaction. But use cases can vary. Think about onboarding new customers. Banks and medical insurance providers have compliance requirements; they need to know exactly who you are, your legal identity, etc. Marketplaces—think Amazon or eBay—need to verify users to create an ecosystem of trust so buyers / sellers feel safe doing business there.

The types of inputs / data a company may use to verify an individual—regardless of the industry—are endless. And often, these external signals can be used to dynamically change the risk calculation on a user. The extreme example would be, say, a shopper who normally buys baby-related items during lunch hour in Ohio and suddenly orders iPhones and video games at 3 am, with an IP address in Belarus. And finally, for many businesses, the use case changes with different customer groupings; imagine a business that requires users under 16 to get a parental sign-off, for instance.

5. What makes Persona stand out from others in the IDV space?
There were already a number of identity vendors when we hit the market in 2018. But we had a different strategy: to tackle the problem at the infrastructure level, much like Stripe did for payments. It was a lot of work, but we built the first system capable of dynamically tailoring the identity journey so businesses could verify their customers without a hitch and remove operational burden by making the process as automated and streamlined as possible.

It’s very customizable for them, and it’s entirely customizable by them. Even small financial institutions can use Persona to quickly plan, craft, and try out new IDV workflows specific to their business and end users.

There is no single silver bullet for IDV; instead, there are many approaches. Persona’s progress has been built on offering all the building blocks to tailor the UX for every purpose.

6. Has fraud increased during the pandemic?
Fraud is always increasing; hackers get better every day. Have attempts increased during the pandemic? Absolutely. Have losses increased too? Yes, in areas such as remote lending — there are government statistics on that. More transactions abruptly went online, which meant more people everywhere were suddenly disclosing more personal data online. Par for the course, in some aspects. Every business handling money had to become more aware, more careful, and better at educating its customers.

7. Do you think technologies like AI can help make identity more secure?

Infusing identity with AI can make the verification process more secure because it means you have less actual humans interfacing with sensitive PII

AI enhances the process of how relevant data being acquired, stored, processed and ingested by (sometimes sophisticated)
models to streamline decisioning tasks such as verifying identities. Gathering all required signals reliably, making sure data is sourced in an ethical manner, and being able to efficiently leverage them through tailored and highly scalable algorithms, will significantly make identity verification more secure, and scalable.

8. How do you see the identity space evolving in 5-10 years?
People will, I hope, will have less fear of their identity being stolen. I also hope—and feel confident—that people won’t even notice their identity is being verified during a transaction. That’s a world where identity as a process becomes almost like a commodity.

We will also see Web3 and more AI / ML come into play to solve identity.

9. Tell us a bit about your culture. What makes Persona’s culture unique?
Values like this can often sound trite or obvious — of course companies should strive to treat both their employees and customers well. But at Persona, it’s not forced — people just live it. I see our team embody it every day, usually in little moments like how everyone is quick to give shout-outs for good work or managers of customer-facing teams volunteering to be available during company holidays so their team can enjoy the time off or the entire company rallying when we need to complete time-sensitive projects.

For the past couple of years, we’ve created an end-of-year video time capsule where the team talks about what they’re working on at the moment, their favorite part about working at Persona, and any fun predictions they have for the upcoming year — and every year, about 3/4 of the videos talk about how their favorite part of working at Persona is the people. I can’t take credit for it, but I truly think it’s this people-first culture — one where people feel like they belong and their team has their back — that sets Persona apart.

FTB News Desk

FTB News Desk

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