Opportunity?: Measuring the Effectiveness of Digital Identity Proofing for Digital Financial Services

Maybe some teams from this community can apply?

https://www.fincen.gov/news/news-releases/fdic-and-fincen-launch-digital-identity-tech-sprint

https://www.fdic.gov/fditech/techsprints/measuring-effectiveness.html

Measuring the Effectiveness of Digital Identity Proofing for Digital
Financial Services
------------------------------

Remotely-delivered financial services, a phenomenon already growing but
accelerated by the pandemic, depend on digital technology for successful
execution. Digital technology also plays a core role in the compliance
aspects of remotely-delivered financial services, from client onboarding
and identification, to customer due diligence and anti-money laundering
responsibilities, to risk management. Cost effective and efficient
technology solutions ensure these financial services are broadly available
and affordable, particularly for resource-constrained firms like community
banks.

Digital identity proofing is a foundational element to enable digital
financial services to function properly. This element is challenged by the
proliferation of compromised personally identifiable information (PII), the
increasing use of synthetic identities, and the presence of multiple,
varied approaches to identity proofing. Simultaneously, technological
developments are enabling dynamic identity evidence such as state mobile
driver’s licenses (mDLs) or other identity credentials that are frequently
updatable and interoperable, as well as behavioral analytics. The FDIC and
FinCEN seek solutions to measure the effectiveness of digital identity
proofing for greater reliance in assessment and calibration of risks, by
having Tech Sprint participants answer the question:

“What is a scalable, cost-efficient, risk-based solution to measure the
effectiveness of digital identity proofing to ensure that individuals who
remotely (i.e., not in person) present themselves for financial activities
are who they claim to be?”

Ideally, the solutions developed from this Tech Sprint will inform future
FDIC, FinCEN, and industry-led efforts, plans, and programs to increase
efficiency and account security; reduce fraud and other forms of
identity-related financial crime, money laundering, and terrorist
financing; and foster customer confidence in the digital banking
environment.

Considerations

There is no “one size fits all” approach to this problem. Innovations
developed for this Tech Sprint could encompass a range of outcomes such as:

   - developing a scoring model for digital identity proofing sources and
   processes;
   - findings and research-backed observations on how to enhance assessing
   existing solutions;
   - applications of artificial intelligence/machine learning programs to
   identify and “red flag” questionable identities leading to dynamic scoring;
   or
   - creating other technical solutions that help answer the question posed
   by the problem statement.

Participants may focus on any aspect of the problem statement, and as that
focus is developed, the FDIC and FinCEN encourages consideration of the
following questions:

   - Does the solution include new or unique data, processes, or
   technologies that could enhance assurance of the legitimacy of digital
   identity evidence, including new forms of authoritative source identifiers
   when onboarding new customers in a remote banking environment?
   - Does the solution consider new forms of digital identifiers from
   authoritative sources, such as state motor vehicle administrations or the
   Social Security Administration? Is the solution interoperable or compatible
   with the multitude of platforms used by financial services firms,
   particularly community banks?
   - Does the solution consider applicability to identity proofing that may
   apply to a multitude of financial products, including legacy financial
   products and evolving digital assets?
   - How might community banks, the largest financial institutions, and
   third-party service providers partner to collectively determine and test
   the solution?
   - How might the solution improve the risk and compliance process or
   align identity confidence with a risk profile?
   - What would a technical implementation of the solution look like, and
   how might it be implemented sector-wide? What role should government play
   in such an implementation, if any?
   - Is the solution cost-effective and scalable to any size financial
   institution, including community banks, does it create value for other
   business applications, and can it be easily implemented and understood by
   non-technical staff?

How to Participate

Registration will be required and will be available on this webpage by the
end of January 2022 for all participants.

Individuals who are interested in participating should submit a
registration form. The Tech Sprint will encompass a review of submissions,
grouping of individuals into teams that will work together over
approximately three weeks to develop solutions to this challenge question,
and invitations to participate in a “Demo Day” of short team presentations
to a panel of experts for evaluation.

At the conclusion of the Tech Sprint, the FDIC will publish all team
presentations and recognize teams based on several criteria detailed in the
forthcoming prize notice. Neither the FDIC nor FinCEN are offering monetary
prizes associated with the Tech Sprint.

A tentative timeline for the Measuring the Effectiveness of Digital
Identity Proofing for Digital Financial Services Tech Sprint follows (dates
are subject to change); please check back frequently as more information
becomes available:

End of January 2022: Registration opens.

Mid-February 2022: Registration closes.

End of February 2022: FDIC and FinCEN review registration applications and
invite a select number of individuals to participate in the Tech Sprint.
FDIC and FinCEN will form teams from individuals selected to participate
that will work together on their proposed solution for a period of
approximately three weeks.

Mid-March 2022: Selected teams come together for a Demonstration Day with a
panel of expert judges.

Additional questions about this Tech Sprint can be sent to
innovation@FDIC.gov