FindBiometrics President Peter O’Neill recently interviewed George Avetisov, CEO, HYPR Corp. The conversation begins with a brief history of the company and an overview of its decentralized security technology before delving into the vertical markets HYPR is finding success in. The discussion then touches on the company’s recent acknowledgement as one of Gartner’s “Cool Vendors”, and then dives into how decentralized biometrics can help prevent major data breeches like the one exemplified by the recent Equifax fiasco. Finally, Avetisov concludes with a review of HYPR’s excellent 2017.
Read our full interview with George Avetisov, CEO, HYPR:
Peter O’Neill, President, FindBiometrics (FB): Please tell our readers about the background of your company.
George Avetisov, CEO, HYPR Corp.: HYPR came together when a team of security and cryptocurrency enthusiasts met by chance in the New York City FinTech scene. It was when a lot of the Bitcoin MeetUps started happening, and when all the Blockchain buzzwords started getting thrown around. I like to call it the New York Cryptocurrency Renaissance. HYPR got started in earnest when myself, Roman Kadinsky our COO, and Bojan Simic our CTO came together. I’d known Roman for some time, Bojan was a cryptocurrency security engineer.
At the time, iPhone 5S was really the only device in the mobile space with a fingerprint reader. We saw there was an opportunity to build a platform, or an end-to-end solution if you will, for enterprises to leverage biometric sensors. We thought, if Apple is doing this, then surely every other manufacturer on the planet is going to follow Apple’s lead. When that happens, we can expect a highly fragmented ecosystem of devices, sensors, and modalities will become available for us to work with. And boy were we right. Fast forward three or four years. Now we’ve got billions of devices out there that are capable of biometrics. You’ve got all these different sensors and different manufacturers, and now enterprises are encountering the exact problem that we had foreseen – how to defragment and leverage the rich biometric ecosystem. That is what HYPR is committed to delivering.
Our decentralized security platform allows enterprises to use everything from FIDO Certified passwords to decentralized biometrics. We make it easy for enterprises to adopt methods of biometrics and more.
FindBiometrics: Can you please outline your range of solutions for us?
HYPR: At the heart of everything is HYPR’s decentralized security architecture. Decentralized authentication, to us, means a method of authentication where credentials always remain safe on the user‘s device. We ensure that the credentials remain where they belong, with their owner.
We talk about open standards a lot and there are instances where our FIDO Certified architecture is what the enterprises want. There are other instances where we use an asymmetric cryptosystem that may be similar to FIDO, but not exactly like FIDO. Choice is really at the heart of everything that HYPR does for enterprises.
Based on the specific solutions an enterprise is looking for, we build out based on verticals. For example, biometric banking is where we’ve really added a lot to enterprise. We recently passed 25 million users. Many of them are across the banking sector.
For example, if you’ve seen some of the large banks deploying a mobile app with biometrics in them like Touch ID or facial recognition, a lot of times those apps are powered by HYPR. Our intelligent client plugs into the bank’s application and enables decentralized authentication on that device.
Also, we have made significant progress creating solutions in the IoT space. You and I spoke about this last year. You said you were excited about how the IoT would adopt biometrics. Well, here we are – working directly with some of the large automakers. The vehicle itself has the HYPR SDK embedded on it, and some of these vehicles are launching with Android Auto or CarPlay, running the HYPR client for multimodal biometric authentication.
That‘s another example of how the device might not be the same. You‘re going from a mobile device or wearable to a connected car. The story is very much the same. It’s all part of our connected world – give the user the ability to use biometrics securely, ensure the credentials are decentralized, and they trust it will give them secure access.
FB: You mentioned two vertical markets of high interest to us in the industry: banking, financial services being one, and IoT the other. Then beyond IoT – the automotive industry is really starting to heat up. Are there other vertical markets that you are interested in?
HYPR: Absolutely. Two areas where I would look to see more activity are connected homes, specifically, biometric locks and home hubs that will power all of their other systems. Both, just as important to HYPR in the IoT space.
We also see a lot of interest from e-commerce. Loyalty and rewards programs –although that technically falls into payments– are increasingly on the radar of the Fortune 500. However, the use cases can differ. The enterprise is actively looking for a secure way to give customers a biometrically secured shopping experience, and we believe this is the year we are really going to see some of the big brands deploy biometric shopping features.
We’re watching both carefully to make sure we stay out in front.
FB: HYPR was recently named “A Cool Vendor“ by the research firm Gartner, can you please tell us about this award? Congrats on that by the way.
HYPR: Thank you. We’re really proud of it. Gartner is a great organization, and it’s taken very seriously when they put early stage companies in the spotlight.
One of the big factors for HYPR being awarded a Gartner “Cool Vendor” was our work with biometric shopping experiences. While you sometimes see security products indirectly creating revenue opportunities, or cutting costs, you rarely see security products being directly used to drive revenue.
HYPR secures some of the biggest names in retail by powering biometric payments for online checkout. The average retail cart abandonment rate is 77 percent. I believe it is between 70-80 percent across other online service providers.
All the big brands are trying to figure out how they can get below at least 50 percent abandonment rate. Biometrics are one way to get there. HYPR is helping to drive revenue by simplifying the user experience, removing passwords, as well as a few other big headaches you encounter at checkout.
FB: We couldn’t agree more, George. The current password scenario is not working. It is extremely frustrating for end users, and therefore the ROI for these retail environments is very positive, so I think there is going to be a huge business there.
This has been an interesting few weeks with the Apple announcement with FaceID, but I wanted to get your thoughts on the recent Equifax breach – this is a big one. Where might biometrics play a role in the future with these types of attacks?
HYPR: I have spoken on this extensively, and I think ultimately what it boils down to – and you can talk for days and weeks about who did what, and why this happened, and why this keeps happening – but I think the core theme about all of these breaches, and all of these incidences, is the centralization of all of this data.
When we centralize data, we create an attractive target for hackers and malicious third parties. It seems surprising that we would be surprised when they get breached. We centralize these big honey pots of personal and financial information, so we have to expect they will get attacked. I don’t think Equifax is at fault any more than any other company centralizing the storage of such important and sensitive data.
It‘s going to take more than just patching your system. It’s going to take more than just downloading the latest updated software. All of that only gets you so far. We still have centralized data repositories of peoples’ passwords, usernames, credentials, bankcards, and even biometrics in some cases. I can’t believe some companies are still centralizing data after OPM. If we don’t get away from the centralization of people’s data we should just expect more of the same.
I believe a step in the right direction is decentralization. It begins with credentials, and progresses towards identities, and then on to other types of data as we get better. We believe we can prove that credentials and authentication can be decentralized. The industry will follow from there.
FB: Has this been a good year for your company. Can you tell us about some of the highlights please?
HYPR: Absolutely! It‘s been amazing. We were at 5 million users when you and I met last year. We recently surpassed 25 million users. That’s good year over year growth. With our pipeline where it‘s at now, I would be very happy to see 100 million HYPR Secure users by the end of next year. That‘s across some of our favorite use cases including financial services and IoT; with connected cars and connected homes. I think it’s really cool to be working with these consumer facing applications because the user volumes are very high, and it’s exciting to know our technology is already securing people you might brush shoulders with day to day. It’s especially gratifying to think those people might have no idea who HYPR is, or what HYPR is, but that HYPR is protecting their data and ensuring their privacy.
So, yes, it’s been a great year. The Series A we announced since taking this interview is only going to add more validity to what we’re doing. We have some great Fortune 500 organizations behind our technology, and I’m really happy the banking sector is adopting decentralized authentication and to see big manufacturers rolling out biometrics.
Apple’s iPhone X is fantastic, whether or not it is a flop is irrelevant, but the fact that they are putting on a new biometric sensor just tells everyone where we are going.
I feel like we are back in 2014 when the team and I sat there with the fingerprint reader, and we said, “If Apple is going to do this, then everyone will be doing this.” And here we are. We are going to sit down with the Apple facial recognition and we are going to say the same thing. Things are going in the right direction, and I am very happy how this is playing out.
FB: Our team also feels that this is another step towards mainstreaming of biometrics. Every time Apple does a major move like this, it has an enormous impact on the industry in a positive manner. You are right, we started with fingerprint and now we have iris, face, voice, and behavioral biometrics, so it is quite an exciting time. Thank you very much for taking some time to speak with us.
HYPR: It has been my pleasure, Peter. I look forward to seeing you at Money20/20.