February 13, 2024
By Nick Peddy

CLEAR’s Approach to Reusable Identity in Financial Services

I’ve spent a large part of my professional career in financial services. In 2006, I first entered the financial services industry with Paypal, later taking on the responsibility of managing CapitalOne's brokerage service, and most recently as the Chief Technology Officer for payments and consumer banking at JPMorgan Chase. Here I oversaw the technology infrastructure responsible for handling fifty percent of all payment volume in the United States.

Financial services and transferring money should be so easy! However, I learned, once you peel back the layers, how complicated and convoluted it all is—a fascinating problem that I’ve dedicated over a decade to trying to solve. So you can imagine my delight when earlier this year, we announced that CLEAR was expanding our financial services offering with the acquisition of Sora ID!

I’ve always known financial services struggle with imperfect, redundant identity verification. I’ve recognized that much of this stems from the struggle of balancing a seamless user experience with preventing fraud. This can look like:

  1. Poor customer experiences that cause dropoff
  2. Siloed data that cannot scale
  3. Duplicate checks that increase costs
  4. Unpreventable fraud that drives major losses

Institutions are stuck choosing between losing money to fraud and losing money due to decreased engagement. Without high-quality checks throughout the user’s lifecycle, the onus falls on compliance and fraud teams that end up only monitoring for fraud after the fact, not preventing it happening altogether. The money is lost and fraud teams cannot do anything about it. These challenges prompted me to come to CLEAR, where we believe that identity is foundational, and where I learned that these problems have broad impact across many industries.

Traditional identity verification providers process the user data, return verification results, and then throw it all away and repeat the process again the next time. This cycle is not scalable, lacking a consistent, direct relationship with the end user. Instead they supplement their offerings with “advanced features” like data-centric fraud flags based on analytics or risk scores.

CLEAR Verified goes beyond associating user information with an authentication credential. Instead, we offer a trusted identity for the user - comprising a meticulously curated set of user information and verification assessments shielded by CLEAR's robust security protocols. Employing a blend of physical, electronic, and procedural measures, CLEAR adheres strictly to federal regulations and industry benchmarks. Notably, CLEAR's High Assurance Mobile Enrollment attains the esteemed Identity Assurance Level 2 (IAL2) certification from industry authorities. Moreover, CLEAR boasts SOC2 Type 1 compliance, along with adherence to PCI and HIPAA regulations, proudly affiliating with the Carin Alliance.

At CLEAR, our mission is straightforward: we envision a world where users can establish a single, secure, persistent identity, usable everywhere you are, reducing friction and removing unnecessary steps. Partners can eliminate the need for users to manually enter information at every step, preventing significant drop-offs. Our reusable identity network unlocks CLEAR’s 18M+ high-fidelity audience and creates a digital “Fast Lane”, unlocking a friction-free customer experience for previously verified users. In fact, we see on average 30% usage from previously verified users, accessing this “Fast Lane” experience.

Each partner has distinct verification standards depending on their industry and specific use case. CLEAR provides flexibility to accommodate these differences, enabling partners to tailor one or multiple experiences according to their specific requirements within the framework of federated data. This ensures that users are not burdened with redundant data entry, while our partners can confidently establish their own risk controls when deciding to engage in business with a user. For every user, CLEAR establishes explicit consent, fostering trust by empowering users with full control over their information. This elevates a CLEAR Verified identity beyond validation of user information, making it comprehensive and user-centric.

I’m excited about what our model for secure, reusable identity can do for an industry I know and love. In future blog posts we will continue to expand upon how CLEAR Verified addresses specific problems for financial services. If you think CLEAR Verified can help your business, please reach out to schedule a demo here!

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