THE JAPAN NEWS


 

In a room of an office building in central Tokyo, photos of people’s faces flashed up one after another on computer screens. As security cameras operated around them, several employees checked these photos of real people from all walks of life — company workers, homemakers, senior citizens and young people.

The images are also stored on a database. The company estimates photos of an aggregated 5 million people have been saved.

Facial photos are not the only data being stored here. Each person’s name, birth date, address and images of some official documents also are kept.
This massive trove of data came from identity verification information provided as part of online applications submitted for opening accounts at financial institutions and for other services.

Online identity verification can be done simply by using a smartphone to photograph one’s face and a driver’s license or other form of official documentation and sending this data in line with directions displayed on the screen. This technology called eKYC, or electronic Know Your Customer, was authorized in November 2018 for commercial use.

This data on 5 million people is being handled by Liquid, Inc., a company in Chiyoda Ward, Tokyo, that has used eKYC since July 2019.

Liquid provides identity confirmation services to about 50 companies including banks, securities companies and mobile phone operators, and stores a portion of the data.

“We’re entering the age of facial data,” a Liquid executive said. “Data featuring a face linked with a name and other information will be a major asset.”

According to this executive, Liquid has developed a system that issues a warning if it detects a person whose data it holds is trying to open a bank account under another name or engaging in other wrongdoing.

Liquid has filed a patent application for this system. If this technology becomes more widely used as planned, this wealth of facial data could be used to detect fraud in an array of industries.


■ Fears of unintended use

Use of facial data is dogged by concerns about privacy violations. Under the Personal Information Protection Law, facial data is considered part of an individual’s personal information, along with their name, birth date and other details. Businesses that acquire this information must inform each individual about the purpose for using these details and gain their consent. Using this information for other purposes is prohibited.

Some of Liquid’s services display a notification stating that during procedures such as opening a bank account, the process will switch to the Liquid system and be used for developing identity verification and fraud detection systems. Liquid requires users to consent to this. If consented, it is legally possible for collected facial data to be used for Liquid’s detection systems.

However, some research shows that only 6% of users carefully read the terms and conditions for services offered online. The personal information law merely states a business operator should try to delete data after finishing using it. Some eKYC operators erase data after completing the identity verification process, but the possibility remains that this data will be retained semipermanently.

“It’s possible that a user’s facial data could spread widely without them being fully aware of it,” an official of a company operating eKYC technology warned. “Rules on using this data and its storage period are needed.”


■ Legal framework

Facial data is collected from various sources such as security camera footage and smartphone facial recognition features. Such data, provided it is properly handled and used, is effective in preventing crime and making daily activities more convenient.

Commercial complexes tap this data extensively to combat shoplifting. During the upcoming Tokyo Olympics and Paralympics, it will be used to verify the identity of athletes and Games officials.

Japan’s face recognition technologies are top-notch and produce few recognition errors. According to market research company Fuji Keizai Co., the facial recognition technology market is expected to grow from ¥2.8 billion in 2019 — the year after eKYC got the green light — to ¥8.6 billion in 2023.

However, changes in this trend are emerging overseas.
Last year in the United States, it was revealed that a software company had without permission collected 3 billion images made public on social media and elsewhere.

Police authorities, banks, major supermarkets and other entities used this data for facial recognition purposes, which prompted a human rights organization to file a lawsuit demanding the company stop collecting this data. In April, the European Union moved toward restricting the use of facial recognition in public spaces by police and other bodies.

Yoichiro Itakura, a lawyer and expert in facial data, said Japan should consider similar steps.

“Europe has started crafting a legal framework fofacial data,” Itakura said. “Japan possesses advanced facial recognition technologies, but how will it handle this face data? The authorities need to quickly discuss this issue and establish rules, including on eKYC.”