In a booming segment of the biometrics market that has been flooded by competitors over the course of the pandemic, Facephi stands out as a bona fide pioneer. The company blazed a trail in selfie-based remote onboarding, and its early mover advantage has allowed it to become a giant in a field that is still rapidly growing today.
Facephi has grown alongside the market, of course, and in a new interview with FindBiometrics Editor in Chief Peter Counter, Facephi CEO Javier Mira discusses some of the remarkable changes that his company has experienced and continues to experience as the market evolves – from signing partnerships with a few banks in 2014 to reaching a roster of more than 120 banking clients today, to current expansion efforts in Latin America and the Europe, Middle East, and Africa regions. Read the full interview for perspective and insights from one of the true pioneers of the biometrics boom.
FindBiometrics interviews Javier Mira, CEO, Facephi:
Peter Counter, Editor in Chief, FindBiometrics: So to start off, earlier this year, Facephi signed an agreement to provide digital onboarding and authentication to BAC Credomatic, which is one of the largest financial groups in Central America. My question is, how did this partnership contribute to your Central American expansion?
Javier Mira, CEO, Facephi: Well, you know that Facephi is leading the expansion related to digital identity in all of Latin America, not only Central America, and BAC Credomatic Bank was actually one of the targets that we had in the last two to three years when we presented the technology to some of the executives of the bank, and they loved it. They were not prepared at that time to implement it, but they remained in contact with us and as soon as we were able to sign the agreement and start working with them, we formed a partnership with this key player of the market.
BAC Credomatic is fantastic for the company in terms of image, in terms of another big bank in our portfolio, and for developing the technology in the area. Central America is really important for us. The BAC Credomatic partnership has been a challenge because all these banks are regional and have different subsidiaries in different countries, so it’s not always easy to close a deal with all of the groups. But, we were finally able to do it, and so we’re very happy and excited about working with them.
Peter Counter, Editor in Chief, FindBiometrics: When we talk about Latin America, there are a lot of different cultures that you’re expanding across, and so having a large expansion effort and being a pioneer in that space like you have been is no easy feat, so congratulations. Staying on that topic, Facephi has been a leader in digital identity verification in Latin America for many years, and so I’m wondering: reflecting on it now, how have that region’s biometrics needs changed in the time that you’ve been working there?
Javier Mira, CEO, Facephi: Well, obviously there’s been a big change since day one. We started working with Latin American banks back in 2014, when we signed a couple of agreements with three banks. Now we have more than 120 banks using our technology, and I would say that around 80% of the banks are located in the Latin American region. At the beginning, everything was related to authentication, so the solutions we tried to implement at that time were only facial recognition for what is a massive market in the financial sector. Today, demand in the market has moved completely from authentication to digital onboarding or identity verification, using an ID document versus facial recognition and some other technologies. So the region is also leading in this aspect.
If we analyze how many users those banks have every single year who are opening new accounts or just verifying the identity of their own clients, it’s 10 times the number of users that we get in Europe or even in the United States. So I think the Latin America region, because of the high level of fraud and because they are really focused on investing in new technologies, the market is always being pioneered in terms of biometrics.
Now, the next step is to start using decentralized biometrics, blockchain technology, etcetera. So I think Latin America, far from being behind some markets like Europe and the United States, is a little bit more advanced than we are.
Peter Counter, Editor in Chief, FindBiometrics: Absolutely. That is definitely how it looks from our perspective when we report on it. The things happening in Latin America in identity – particularly in finance and banking – are usually a preview of what we will see a few years down the line in North American and Europe markets where regulation and uptake are big obstacles.
You mentioned decentralization and some crypto elements, so I want to ask: what do you think the future holds for biometrics in Central America and Latin America? I know that you have a lot of interesting use cases there with pension collection, and obviously you mentioned digital onboarding. Is there any excitement about the future there?
Javier Mira, CEO, Facephi: Well, I would say that the answer for this question is not only affecting Latin America. I think practically all the markets are following the same path in terms of using biometrics. The truth is that today, many markets are trying to keep the balance between regulation and new technologies in order to facilitate end users to complete processes by using their smartphone or banking online without having to go to a physical branch, which means less interaction. So everyone knows that this is a trend that’s going to continue here, especially after the pandemic. But at the same time, we need to be regulated. So I think some of the markets are copying some of the regulations coming from Europe. Some others are just trying to be a little bit more flexible in order to accept new solutions.
With regards to the future, obviously we are paying much attention to the conversations surrounding privacy. The way Facephi looks at the future, we believe that, beyond being able to identify digital identities or verify digital identities, we have to be the protectors of these digital identities. The end user both wants to use this type of technology, but also feels protected and that their privacy is really in good hands. So, Facephi is completely focused on that in terms of using any technology capable to advance privacy protection.
Peter Counter, Editor in Chief, FindBiometrics: I like that you talked about this as a larger global industry, as Facephi has also committed to the Europe, Middle East, and Africa regions this year, establish a subsidiary dedicated to that EMEA space in the spring. What are that office’s challenges in comparison to the space in Latin America? What are the unique characteristics of that market?
Javier Mira, CEO, Facephi: The best way to understand why we opened a new subsidiary in London to manage the EMEA region is because Facephi has grown. I mean, we were a startup before the pandemic with only 24 people, and today we are +200 people. In terms of our product offerings, we had only a solution based on facial recognition to authenticate and verify identities in the financial sector. Now, we have travel and transports, public administrations, insurance, sports events, shared mobility and healthcare using our technology.
Obviously, the financial sector is still the strongest for Facephi, accounting for nearly 90% of our revenue, but we now have several different verticals using our technology. Our product has gone from offering only an on-premises product to offering a platform that can provide either a SaaS solution or an on-premise one for these companies. In that way, Facephi changed completely, and we decided to open an EMEA region office because we want to cover the region, not only in the financial sector, but with its use of these technologies in other verticals, such as banking and financial services, fintech, crypto, insurance, gaming and digital services.
Peter Counter, Editor in Chief, FindBiometrics: And when you’re talking about it in that platform perspective, I think you really do get to the core of identity, which is a really powerful thing because that really does apply to every possible vertical market. As you mentioned, all of those different use cases, it’s really wherever users are interacting with each other either digitally or physically. It’s fascinating, and that big perspective really kind of opens up what I’d like to talk about next, which is Facephi’s really stellar first semester of 2022.
Your expansion efforts were obviously among the highlights of another record-breaking semester for Facephi, where you saw 90 percent sales growth for the first half of the year. Given the challenges that are facing the technology sector in 2022, what would you say gives Facephi the edge to continue in this success? It feels like this is a trend for you; you’re constantly breaking records.
Javier Mira, CEO, Facephi: Thank you very much for your words. I think it’s a combination of several things. I mean, the company now is really mature in terms of our technology. It’s not the same when you have just five, 10 banks using your technology versus when you have a hundred-plus banks using it, or when you have an on-premise solution versus a SaaS service, or you became a SaaS provider. It’s not the same when the market trend is really as strong as it is today. So I think it’s affecting not only Facephi, it’s affecting many of our competitors, as we are all growing quite a lot because the market trend is very strong. And at the same time, it is also a bet that we made in 2019 before the pandemic paying off, where we just decided to become Facephi, a scale-up coming from a startup.
We raised money in order to expand our technology, and grow the structure of our company – as I said, to about 10 times the structure we were about two years ago. And at the end, those are the results. I mean, we know that growth is coming for the company. The first semester has been really, really amazing, and we are excited to present these results, but I’m sure that at the end of this year it’s going to be more or less the same growth as we had last year, and the company’s going to continue breaking records.
This is what we are focused on; to continue this success, to keep growing the company, and to keep bringing our technology and biometric solutions to end users to try to improve their lives.
Peter Counter, Editor in Chief, FindBiometrics: It’s a great success story. I really feel like Facephi is a real shining example of how you can successfully move from that startup scale and become the company that you are now, and the company that you’re going to be in the future. It’s a struggle that we’ve seen other companies not necessarily succeed in.
On that note of being a great role model, this year in our interviews, we’ve been focusing on some of the more human nuances of the digital identity verification industry, and how they’re reflected in the workplace culture of leading vendors like Facephi. You recently committed to closing the gender gap in the engineering sector, and before that you implemented a four-day work week. What role does workplace culture for Facephi play in your strategy as a global biometrics company?
Javier Mira, CEO, Facephi: That’s a good question. I think the world today is not the same as it was 10 years ago, and obviously it was not the same three years ago before the pandemic. At Facephi we know that life needs to be not only about working 20 hours a day. I think we need to keep balance, you know, with family or personal life. And you need to be working in a place or on a project that you like. And now, what we notice is that in order to try to attract talent, it’s not only a question of putting a lot of money on the table and saying, “Hey, I can give you a 10 percent higher salary than my competitor.” I mean, we try to bring people in that want to build something with us.
They want to participate in our project, they want to have a career in the company, knowing that if they start today being an engineer, they can end up in a C-suite level if they want to and are committed to the company. In the end, you need to implement several things, one is the four-day work week that we have been pioneers of in the region we are in. That’s because we want to keep the option of teleworking at home, while at the same time, we want to maintain some presence in order to establish that team feeling with all the employees in the office. This means we need also to give some space for people to have personal lives and enjoy family and whatever.
I think it’s a combination of factors. From the engineer point of view, we hire from all around the world and they are really happy about joining Facephi. We can feel it in the way they speak when we have meetings or company gatherings. We know that the vast majority of our employees are happy and satisfied, balancing projects and personal life. And I think this is important for the success of the company. When your people find that balance it’s impossible not to have success.
Peter Counter, Editor in Chief, FindBiometrics: We’re all in this industry that is solving some very big problems, and you really can’t do that without passion, so we’re always happy to see that reflected in the workplace culture as well.
We’re in the process of launching our 20th Annual FindBiometrics Year in Review. Believe it or not, we’ve been doing this for 20 years, and so we’re looking back on 2022 trying to look at some trends. And I’m wondering what have been 2022’s definitive biometrics trends in your eyes?
Javier Mira, CEO, Facephi: Well first of all, congratulations on your 20th anniversary; that’s amazing. Imagining how much biometrics have changed in these 20 years, it’s crazy. What we saw as the future 10 years ago, now it’s the present, you know, now we are using these technologies that we were only dreaming of 10 years ago, let alone 20.
About your question, it’s quite interesting because biometrics now are really becoming standard. I mean, I don’t know anyone that wouldn’t know what you were talking about if you asked them about biometrics today, whereas 10 years ago, nobody knew anything about it. As I mentioned earlier, today the trend is more related to people’s concerns about privacy. So the market is really responding to these privacy concerns, and to privacy protection relating to biometrics. But the main advantage in terms of biometrics, the best thing is that thanks to AI and thanks to machine learning and deep learning technologies, we are capable to advance in three months what would have taken us five years only a short while ago. Today, you might just happen to see a technology that is really, really new on the market, and we’ve only had three months to implement it.
Now we have technologies like behavioral biometrics for example, something that in the past didn’t make much sense for us, but now we have our clients all demanding behavioral biometrics combined with facial, combined with fingerprints. So multimodal is still the most important thing today in the biometric space – at least that’s what we hear from our clients.
And so, still focusing on multimodal, obviously the managing of data that we are generating from this amazing number of interactions where we are gathering and collecting a lot of data – that can be very useful for banks and for many other industries. And I think this is a combination of data technology and multimodal technology, biometrics. I think this is the best, the trend that I’ve seen in 2022; the combination of data, technology, and multimodal biometrics, and it’s something that we are all trying to implement, and it’s been very well accepted by the end users.
Peter Counter, Editor in Chief, FindBiometrics: It’s fascinating how this connects with what you were saying about taking a new platform approach and going with the SaaS method. All of these trends sort of support that platform approach. And then also, just as you mentioned, 20 years ago we didn’t even have smartphones, believe it or not, but I have a multimodal biometric device in my pocket that can use your technology – it’s pretty interesting.
My final question is, what can we expect next from Facephi in this last quarter, and into next year?
Javier Mira, CEO, Facephi: Well, in this last quarter we are trying to close the year as good as we can, closing some important deals to have a nice picture by the end of this year. But I think all of the work has been done already, and it’s more a question of closing these opportunities. As for next year, Facephi is going to try to expand its technology and team, and as I said, I’m really excited about the new subsidiary, the new structure that we have in the market in order to start touching new verticals in this region in Africa, in the Middle East, and also in Europe where regulations are also starting to help us in different verticals.
Last year and this year, we’ve really been focusing on growing the structure of the company in terms of R&D, and the development of our solutions and products, so about 70 to 75 percent of the structure is related to engineering. Now, the next step is for us to focus now on growing our business development, operations, and delegations in order to use the technology that we have in our hands. The money that we were able to raise in order to expand the business is going to have a big impact for the company in 2023 and 2024 in terms of revenue and our footprint in some of the new regions that we are trying to attract.
Peter Counter, Editor in Chief, FindBiometrics: Fantastic. Well, I’m excited to continue to have these interviews to talk to you about each of those big milestones ahead. Thanks very much for this, Javier. It’s been a pleasure.
Javier Mira, CEO, Facephi: Thank you, Peter. Pleasure for me, as always.