More breaking news was announced this week to shake-up the government, travel and fintech ecosystems, causing our clients to re-visit their carefully planned strategies for 2024 and beyond. With the move to acquire Onfido, Entrust is making another big step away from its Datacard roots in smart card and document production, personalisation and issuance. Since Datacard acquired Entrust in 2013, it rebranded as Entrust in 2020 and has been expanding its software platforms and adding digital and virtual solutions to its portfolio, including acquiring businesses such as Thales’ HSM products in 2019 and both Antelop and Worldreach Software in 2021. In return for a reported $650m investment, this news demonstrates it is looking to significantly bolster its digital identity capabilities.
Entrust has grown its portfolio of security-related products and services to become a well-established partner to the financial, government, healthcare, retail, education and enterprise sectors. All of these have demonstrated good uptake for digital identity and identity verification (IDV) with solution providers reporting exceptional growth as a result of the drive to digitise processes following the pandemic. Whilst that growth has slowed in the past 18 months it remains strong and retains further potential. However, we believe that there will be a transition from initial IDV for account opening and onboarding of customers to more integrated application of identity and authentication, enabling user’s identity to be checked and re-used for more applications. This will enable more valuable service partnerships to develop and move the market from being customer-acquisition focused to value-focused and allow identity solution providers to become more profitable.
Onfido positions itself as a technology provider of digital identity verification for organisations to onboard customers remotely in a secure, trusted and compliant manner, reducing fraud and streamlining processes. It has a strong position in financial services, banking and payments as well as customers in gaming, retail and healthcare. Whilst it uses AI as a tool, it has also been working to address the growing issue of AI-generated fake IDs for its clients, reducing fraud by ensuring that only verified users can open accounts and complete transactions.
Onfido’s acquisition of Airside Mobile in May last year added specialist identity capabilities serving travel, transportation and border control applications. It delivered the original Mobile Passport Control app for the US CBP, used by millions of Americans (and eligible Canadian citizens) and has notable partnerships with American Airlines and Alaska Airlines, providing digital identity capabilities integrated into their customer apps.
This is a key area of interest for myself and Valour colleagues as part of our coverage of Smart Borders. Our clients have to comply with regulations for the accurate reporting of passenger data, especially in relation to border control. As more digital and mobile technologies are introduced, it reduces the reliance on manual inspection of travel documents and credentials but does open the door to digital fraudsters. Ensuring that only those that are who they say they are board planes and cross borders, or make applications to enter a country is an increasingly important challenge as we see more mobile apps and online portals being used to streamline traveller processes.
Following last week’s news of Amadeus to buy Vision-Box, Entrust looking to acquire Onfido is another good example of the blurring of the lines between government and business solutions. Whilst it does blur the traditional dividing lines it is something that will aid future development and implementation, for example enabling an airline to simultaneously provide traveller data to both commercial partners and border agencies from a single, verified source to simplify and streamline processes.
Entrust is very active in the border control market, consulting and partnering with governments and border agencies on back-end systems and passport issuance, as well as still providing traditional printing and production solutions for ePassports. Our research around Smart Airports and the growing move towards Seamless Passenger Journeys details how it has also been involved with the first trials of digital traveller credentials (DTCs) – which are effectively smartphone-based passports – to board planes and pass through immigration. Acquiring Onfido will allow it to expand its reach and services. The Antelop acquisition added digital wallets and issuance of digital and virtual (payment) cards directly into users’ smartphones, in compliance with financial regulations. Worldreach added digital identity capabilities for government travel and citizen services, including those related to verifiable credentials and a record of successful delivery, notably the UK’s post-Brexit EU Settlement Scheme. This allowed EU citizens resident in the UK to register digitally and verify themselves along with their ID to have the right to remain in the UK. It also partnered with iProov to provide Eurostar customers with the first commercial service using DTCs to cross a national border.
Acquiring Onfido will enhance Entrust’s existing business in the government, travel and financial sectors with wide-reaching verification, on-boarding and identity capabilities. It maintains a strong smart card and document base, with production, printing and personalisation along with making good headway with encryption, data security and digital services to allow its customers to offer the best of both traditional and digital services to their customers. For Onfido, the acquisition will expand its geographic reach and customer base, opening the door to government as well as commercial customers. It also gives it a stronger basis for expansion, better allowing it to grow in what is an increasingly crowded and competitive market. As may be apparent, it will be necessary for strong governance and a clear roadmap to integrate all of these businesses into a single, well-aligned proposition but, if seen through, the new-look Entrust will be well placed to address the evolving needs of its customers and their end-users. We believe that we could see more M&A activity in the identity space in a maturing market as it develops from a customer land-grab to one where vendors look to integrate more with their customers and provide higher-value services beyond initial identity verification.
Valour Consultancy’s Airports + Borders team provides coverage and intelligence on the adoption of self-service and automated traveller touchpoints, and the integration of biometrics and digital identity to enable these and associated platforms and processes. Its latest services include reports on The Seamless Passenger Journey in Smart Airports, Smart Borders: The Future Evolution of Land, Sea and Air Borders, and the Smart Airports Tracker. Please contact info@valourconsultancy.com for more information on these services or to find out how we may assist you in any related areas.
