Mizuho to commence proof-of-concept trial of new Digital ID

Maria Nikolova

The Digital ID improves online banking authentication and ongoing customer due diligence by utilizing device location information and facial recognition technology.

Mizuho Bank, Ltd., a subsidiary of Mizuho Financial Group, Inc. (TYO:8411), is set to commence a proof-of-concept trial of a new Digital ID in cooperation with Google Cloud Japan G.K.; Nomura Research Institute, Ltd.; and Dai Nippon Printing Co., Ltd. The Digital ID improves online banking authentication and ongoing customer due diligence (CDD) by utilizing device location information and facial recognition technology.

Mizuho Bank will be responsible for the trial design and results verification. Google Cloud Japan will provide technical support. Nomura Research Institute will develop an online banking app and will build the server system. Dai Nippon Printing will provide facial recognition technology-based authentication functions and will develop API-linked facial recognition functions and e-KYC functions.

The trial will be a first step towards establishing IT system infrastructure for the Digital ID and launching it as a full-fledged service.

This proof-of-concept trial marks the sixth project Japan’s Financial Services Agency has selected for support under the FinTech Proof-of-Concept Hub initiative. This initiative, run by Japan’s Financial Services Agency, facilitates fintech-related proof-of-concept trials in order to accelerate fintech innovation.

Currently, for the sake of balancing security and convenience, online banking authentication mainly relies on two-factor authentication, in which one factor is something the user knows, such as an ID and password, and the other factor is something the user has, such as a dedicated card or a one-time password. However, two-factor authentication cannot completely eliminate phishing-based password theft, unauthorized lending of dedicated cards to others, and similar forms of unauthorized access. Consequently, there is a need to further enhance security without sacrificing customer convenience.

There is also a need for financial institutions to strengthen CDD, an important responsibility in combating money laundering and financing of terrorism and one the Financial Action Task Force on Money Laundering (FATF) has made a priority.

Against this backdrop, Mizuho and its partners will launch the proof-of-concept trial to evaluate whether or not device location information and facial recognition technology can ensure security in online banking and, in the case of device location information, enhance CDD.

The trial is set to run from May 11, 2020 to October 9, 2020.

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