Intouch Spring/Summer 2008
Identity management on the web
People’s standing in the ‘real’world will increasingly be driven by the information that’s available about them on the web, so 3i-backed Garlik helps people to manage their online identity. It has the credibility that comes from the proven abilities of its leaders.
Handing power to consumers
As the founder of mould-breaking organisations First Direct and Egg (see panel), Mike Harris is clear that identifying an emerging technology and applying it at an early stage to shift power to the consumer is what motivates him.
“The more information and tools I can put in customers’ hands, the more they can get what they want,” he says.
In this instance, the emerging technology that’s captured Harris’s enthusiasm is the semantic web – an approach to creating web pages that helps software agents find, share and integrate information more easily. It’s this technology that underpins Garlik’s identity management services, and Harris describes it as “potentially world-changing.”
As Executive Chairman, Harris will play a key role in driving Garlik’s success. In his words: “I’m not interested in thinking small. I’m used to building big consumer businesses and I can use that experience to help Garlik become an international billion-dollar corporation.”
Exposing the real risks of identity fraud
Identity protection has become an increasingly hot issue. However, according to Garlik CEO Tom Ilube (see panel), the chief risks don’t come from the commonly feared sources.
“People worry about criminals hacking into their bank account or gathering information from papers in their garbage – but in fact the greatest danger is from the information that billions of people worldwide can easily find on the web,” he says.
“The rise of social networks and ‘open government’ has seen an unprecedented flood of personal information migrate online. This helps criminals find out more about people in two to three hours than they used to uncover in two to three days.”
An opportunity to mitigate threats online
The criminals who undertake identity fraud typically fall into two categories: those who collect and sell parcels of data on individuals, and those who use the data to commit fraud. Often individual frauds are for relatively modest amounts – ordering consumer goods online for resale is typical. However, as Ilube explains, the consequences for the victim can be severe.
“Once someone has used your identity dishonestly, you have real problems. Firstly, your credit standing is likely to be seriously impaired. Secondly, you have to spend a lot of time liaising with organisations to sort out the mess. In many cases, victims don’t suffer direct cash losses but addressing the issues can absorb up to 300 hours over a period of six months. Some organisations, such as mobile phone companies, can be reluctant to accept that a fraud has taken place. Beyond all that, there’s an enduring sense of violation. ”Because individual frauds are often for modest sums, organisations may not report them to the police, typically writing them off as a cost of doing business. This makes it hard to find figures that show the economy- wide financial cost of the problem – but identity theft is believed to affect about 100,000 individuals a year in the UK alone.
Garlik’s DataPatrol product (see page 24) helps people to lessen the risk of being the victim by keeping an eye on the information available about them online. But the issues raised by online identity management aren’t all defensive. Ilube explains: “The same routes that allow criminals to access my information also enable me to influence how I present myself. The new world isn’t going away but it does present opportunities as well as threats. Our product, QDOS, helps people control their digital presence by making it more visible and measurable.”
The benefits of a listed investor
Both Harris and Ilube had long-standing links with investors at 3i, making the private equity firm a natural partner when Garlik sought early-stage funding. But it wasn’t simply the personal connections that counted, as Ilube explains:. “In the technology world, the quality of the investors is key. Having a publicly-listed company of 3i’s standing on board opened up many doors and helped us make a wide range of important connections.”
High-level contacts are particularly important for Garlik. Although thecompany amassed 60,000 DataPatrol users over the last year, the highway
to volume sales is ‘bundling’ – persuading banks to incorporate the service into integrated packages of products. This makes 3i’s close links with the financial sector especially valuable.
At present, Garlik’s products are principally aimed at the UK market but the company’s scaleable, lightweight model is ripe for overseas migration. “We intend to launch our products in the US by the end of 2008, and are also keenly examining opportunities in China and India. 3i is incredibly useful in this process because of its on-the-ground presence in these key locations,” says Ilube.
In Ilube’s view, identity protection is not simply a matter for individuals – it’s fast rising up the corporate agenda, too. “As products like DataPatrol and QDOS increase people’s awareness, they’ll put pressure on companies to be more accountable in the way they use personal data,” he says.
“Leading organisations such as AOL and Facebook have already appointed Chief Privacy Officers, and I expect all companies in this field to have them in two to three years’ time.”