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In 2014, the National Notary Association (NNA) ran an ID-matching survey. They asked notaries from across the country to look at 18 sets of photos—one of an actual driver's license; the other a candid shot either of the person on the ID or an imposter—and verify if it was the same person in each photo.

Of the nearly 3,000 participants, the imposter was identified as the person on the ID 32 percent of the time. Even more interesting, the photos of people who matched their IDs were labeled imposters 31 percent of the time.

The role of notary public is one of the oldest public servant roles in human history, yet notaries need modern tools participate directly in modern digital transactions. A notary helps to ensure trust in the most important transactions in a person's life, from homebuying to adopting a child, but old ways need to be updated for the digital world.

Quite simply, looking briefly at a physical driver's license isn't enough anymore.

Two-factor authentication, Face-ID, and other innovations are the latest technologies for identifying users online and to deter identity fraud, but we're still far from having real trust in online identity validation in our increasingly digital world.

There's a clear opportunity to reinvent identity verification and data security for the better, and the path forward is right in front of us.

In 2011, Virginia passed the Virginia Electronic Notaries Act. The law allows notaries to notarize documents online, but perhaps more importantly, the law requires these documents to be handled using heightened and very stringent authentication processes to verify identity.

Driver's licenses were long an effective and reliable way to validate identity, but fraudsters have become very sophisticated at making counterfeits. Even with modern “Real-ID's,” fraudsters have proven very adept at keeping up with the bells and whistles added to IDs to make them more secure. The identity verification technologies we see in remote online notarization will soon be our “digital license” to prove who we are online.

The remote online notarization process delivers a multi-layered, multi-faceted approach to security and identity verification to ensure the person on the other end of the transaction is who they say they are. The transaction is recorded, and provides a fully encrypted audit trail.

Remote online notarization supports notaries, but it is also laying the foundation for how we deliver trust and certainty to online digital transactions.

Using Technology to Empower Notaries to Be Their Best

Though it has been critical over the millenia, innovation has long overlooked the notarial act. The three most significant technological advancements for notaries all came in the 20th century: the ballpoint pen, the laserjet printer, and the driver's license. That's not much growth for a role that dates back to ancient Egypt.

Before government-issued IDs, notaries either knew the signer, or knew someone who knew the signer and was willing to vouch for them. All of these transactions were conducted in person, sometimes with clients or in locations that left notaries fearing for their safety.

It turns out that if a notary is threatened in any way when they're in person, it's actually safer for them to just proceed as normal. According to the NNA, “If you feel threatened or that refusing a notarization would place you in imminent danger, go ahead and complete it. Then report the situation immediately afterwards to your local law enforcement.”

There's one slight problem: 25 percent of notaries surveyed by the NNA have felt threatened to complete a transaction, but only 4 percent of those threatened notaries alerted the authorities after an incident.

Remote online notarization provides a safer, more secure way of ensuring the integrity of a notarization. The session is recorded, the notary's location is undisclosed, and the signer can conduct the transaction from the comfort of their home or office.

Preventing Fraud Through Modern Technologies

Over the last year, nearly 75 percent of companies have cited fraud as a growing concern to their business. Even with added security measures, it's hard to verify the identity of a foreign actor on Facebook leveraging political ads, or someone electronically signing the offer to your new job if they have access to your inbox.

It's becoming easier to steal individual pieces of personally identifiable information and to replicate or duplicate government-issued IDs. But it's hard to steal knowledge and personal experience, or to make a counterfeit ID which can pass modern software validation tests

Identity proofing through a remote online notarization begins with credential analysis. In the traditional notarial process, “analyzing an ID” involves the notary public looking at a state- or government-issued photo ID or passport and determining if the person sitting before them matches the ID. That's hard to do when the ID captures a person at a specific moment in their life. Maybe it was before they dyed their hair, or before they lost weight.

When analyzing an ID through a remote online notarization platform, an additional layer of scrutiny is added by running the ID through a software-based analysis that helps to ensure its validity.

Credential analysis is followed by knowledge-based authentication (KBA). Most people are familiar with “static” KBA questions from setting up online accounts, but the issue with static KBA is that the average person now shares a great deal about themselves online. Personal accounts like Facebook and Gmail often include basic information normally used to answer static KBA questions. If a hacker can access some of your most basic information, they have a real chance at fooling static KBA.

“Dynamic” KBA is more effective because of the depth and breadth of questions, which reference both current and historical information. Dynamic KBA authentication typically relies on third-party databases with access to public information to provide multiple, sophisticated questions with a range of correct answers. If static KBA asks about the street you grew up on, dynamic KBA asks, “Which of these streets have you never lived on or used as your address?” Instead of asking you about the color of your first car, dynamic KBA will ask you to identify the car models you've owned. Where static KBA asks questions with single answers that are more easily verifiable, dynamic KBA asks multiple questions with a range of possible answers—everything from all of the above to none at all.

The last step involves a notary taking the information presented during steps one and two, and confirming that the signer on camera matches the form of ID that was presented at the beginning. This three-step prevents someone from using a stolen, valid government-issued ID to bypass credential analysis. And to top it all off, the notary and signer then communicate in an online audio-video session which is recorded, so if it's a fraudster, they'll have to engage in fraud “live and on camera” for the authorities to later inspect. All these steps taken together turn notarization into the identity validation and fraud prevention powerhouse for the digital age.

Providing Access for Consumers Around the World

The most important moments of your life don't happen when a bank or a lawyer can fit you into their schedule. They happen outside of business hours, sometimes unexpectedly, and require support that will be there when you need it.

Remote online notarization empowers signers to live their lives on their terms. Homebuyers can close on their Texas property from their current home in Europe without boarding a plane. Someone can sign a job offer while on vacation with the family.

Fraudsters continue to develop increasingly sophisticated ways to forge signatures and fabricate forms of identification. This presents enormous challenges for making sure life's most important moments are safe, secure, and valid.

Remote online notarization, which is now accepted nationwide, is the foundation for trust in the digital economy.

Soon, the majority of transactions completed by the world's most important economic sectors will occur online. How we protect and validate those transactions will shape the future of trust in the Digital Age.

 

Michael Chodos is SVP and General Counsel at Notarize, as well as a Senior Fellow at Georgetown University's Beeck Center for Social Impact and Innovation. Michael previously served as the head of the Office of Entrepreneurial Development in the U.S. Small Business Administration under President Barack Obama. He also served the Administration as the SBA's Deputy General Counsel. Michael earned his J.D. from Stanford University Law School.