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Saudi banks trial blockchain-based identity technology at ATMs

Biometric and blockchain technologies are being used in tandem to provide ID verification at Saudi Arabian cash machines

This article can also be found in the Premium Editorial Download: CW Middle East: CW Middle East: Saudi banks trial biometrics in ATMs

US blockchain identity platform firm ShoCard is working with Alhamrani Universal, Saudi Arabia’s largest automated teller machine (ATM) provider, to develop the country’s first biometric bank access technologies.

The ShoCard prototype is aimed at solving card fraud issues that continue to blight banks and consumers globally. A study by Gemini Advisory showed that in the US alone, 60 million credit cards were compromised last year and sold on the dark web.

The Saudi Arabian trial will enable local consumers to use their faces and blockchain-based apps to withdraw money from cashpoint machines instead of PIN numbers. 

The ID authentication prototype, currently under test, can communicate across banks and uses blockchain to confirm an individual’s identity without accessing the bank’s database.

“ShoCard will solve the issue of card fraud at ATMs,” said Armin Ebrahimi, founder and CEO of ShoCard. “It fits nicely into existing ATM technology, which usually already has a camera installed, and makes the customer experience as seamless as possible.”

The system uses blockchain technology to protect people’s identity while confirming the information that banks need to verify that a withdrawal is legitimate.

ShoCard protects against ATM scams by introducing biometrics as part of a five-factor authentication process that also includes the ShoCard ID, a QR code, timestamps, session IDs and other user verification methods, such as selfie IDs.

As banks begin to adopt biometric technology for authentication and verification at cash machines across the region, Alhamrani Universal’s ATMs will be able to verify all customers, irrespective of their banking partner, because of the combined use of blockchain and biometrics.

“ShoCard uses blockchain technology to identify users across different banks, hardware or online services where no device or service is trusted,” said Ebrahimi. “It allows users and enterprises to establish their identities with one another in a secure and verified way, so that any transaction can be accomplished quickly, seamlessly and with peace of mind.”

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Ebrahimi, former senior vice-president of traffic engineering at Yahoo, said his time at the US search engine had given him insight into managing identity and fraud protection. Later in his career, he began to experiment with his own tech startup ideas.

“I was looking for gaps in different areas,” he said. “I was looking at doing something for a mass user base that was dramatically different. In 2014, I started looking at blockchain technology. At the time, people didn’t understand what blockchain was.

“I was very interested in the technology itself, so I spent a lot of time exploring and learning. The ‘aha’ moment came when I realised I could use blockchain as a distributive measure to create proof points and use mobile devices to store identity.”

According to Ebrahimi, personal identities have traditionally belonged to organisations that provide consumer services, such as banks, employers and the social media giants. “They have extracted your identity and they say they will safeguard everything – you have access to it but you don’t have ownership of it,” he said.

With ShoCard, all the data required to authenticate consumers is stored on the phone itself and no one else has access to it.

Ebrahimi, who has a team of 15, mainly software engineers, said he is looking at global and Middle Eastern partnerships to help scale up his business.

ShoCard has been working with Saudi Arabian implementation partner Ateon to produce the local ATM ID prototype. Ateon is a member of the Alhamrani Group, which already has strategic partnerships with global blockchain companies, such as SettleMint, ShoCard, Sofitto and EduChain.

ShoCard works very closely with Ateon. “They come over to the US often and we send our folks to Saudi to work with them directly. We utilise Ateon for engagement with different banks. It is more of a distributor for our technology,” said Ebrahimi.

“There is a lot of interest and optimism around technology in the Middle East. What we see in the region is often that they want to be the first to adopt different technologies, become more digital and make advancements over others, rather than being followers.”

Government digitisation programmes

Ebrahimi also attributed the region’s appetite for tech to major government digitisation programmes that are being rolled out across the Gulf Cooperation Council (GCC) countries, such as Saudi Arabia and the United Arab Emirates (UAE).

“There is a lot of government support for technology and they really try to understand it,” he said. “Our regional clients try to work with the banks and financial institutions to make sure the requirements are well understood.”

Ebrahimi said ShoCard was mainly focused on financial institutions and enterprises, but there was also growing demand for blockchain ID technology within the healthcare and travel verticals.

“ShoCard can work for air travel by offering an additional identity step for when you are going through an airport,” he said. “But the real focus of what we do has really been in the financial sector and also enterprises, which we see as a bridge between new and existing technologies. We allow employees to log in without using usernames and passwords ­– they just use their phones. Customers don’t have to write any code.”

Ebrahimi said the future looks bright for the growth of blockchain technology in the Middle East.

“What they’re using in the region now is only the tip of the iceberg – there are a lot more opportunities. We are looking at working with countries to digitise their certification documents, so that citizens can have their certification on their mobile device,” he said.

“The opportunities go well beyond what we are doing right now, but you have to take it one step at a time to move forward.”

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