It is in the fight against counterfeiting designer labels that VST Enterprises is currently making strides, with a new partnership with fashion business Dewhirst being announced today. VST Enterprises technology will enable speedy purchasing and provide instant related product information, including current offers and promotions, as well as preventing international circulation of counterfeit products and enabling garment traceability.
But there are bigger goals in mind for the cybersecurity provider. CEO Louis-James Davis speaks exclusively to bobsguide to explain why VCode rivals, and in some circumstances supplants blockchain technology as a functioning distributed ledger, and what that could mean for financial security and payments development in the future.
How did you get into the fintech industry, and how did you come to found VST Enterprises?
Initially I was in music, but suffered with a bad illness that pushed me into doing other things. My first business was in digital media and content distribution around the entrainment industry. The vehicle that I had at that time was called Alive Drive, which was a plastic card with ID and a USB, you could basically tap it on a shop window or at an event and it would update with content on the drive.
That product proved to be too costly so we had to go back to the drawing board, we looked at QR codes and other codes but we just couldn’t get the ease of interaction for our consumers, so we looked at building our own code, which ended up being the VCode that is the core of our business now. And the aim of the code at that time was that you could scan at distances and angles so that you didn’t have to stop when you wanted to update the content.
But from that beginning we realised that it wasn’t just content that this was useful for, we could also manage payments, and then realised with the system we could do a full audit trail of transactions and eliminate counterfeiting. So we built a ledger system that was centralised and that could rival blockchain.
Is developing a rival to blockchain now the primary purpose for the business?
My primary focuses are to get the system into government bodies, to eliminate fraud and counterfeiting, and also to provide identity. Our tech can perform functions that other technology can’t do by itself in these areas, that’s its USP.
We just so happen to have a centralised ledger that other people can log into using our modules, that is where the blockchain comparison comes in.
How far down the road would you say you are in terms of achieving your objectives? Have you had conversations with target consumers?
Our ledger is completed, we’re working on further encryption which will be done by the end of this month. And then it will be live before the end of February.
We’ve had conversations with central banks including the Bank of England, we’ve also had large accountancy firms like KPMG and EY take an active interest, and people who are using blockchain for trade and are struggling are also interested. We’ve had trade industries contact us because blockchain solutions aren’t working for them, they’re jumping on board with it because it what everybody is talking about but it isn’t right for them.
In terms of the fraud counterfeiting issue that you have identified, was that an issue that you saw as not being properly addressed by business in 2016?
We were on our way to doing that anyway, but it wasn’t actually us that identified our technology could provide a solution to this huge issue in the market. It was the EU Commission. It put a tender out, where an independent researcher included our technology in a report saying that our technology was the only one that could record end-to-end traceability and eliminate counterfeiting as a result by itself, so that drove our focus from 2015 to 2016.
Is it your opinion that cybersecurity issues aren’t taken seriously enough?
It’s not being addressed, because we aren’t going back to the drawing board and creating new systems. We’re using systems that already exist and trying to make them fit into doing new solution solving we want them to do. Industries haven’t thought about creating a custom solution to solving the problem that they have, they just want to tweak current technology to try to make it fit.
Currently the gap between the sophistication of cybercrime and the capability of cybersecurity technology is being maintained, but it's not closing, and if a new approach isn’t taken the gap is going to increase. If people commit fraud and get away with it, then their children will learn how and where this is possible. If new solutions don’t tackle the existing problem it will never be eradicated.
Are you hopeful that attitudes will change in 2017? Will we see institutions turning towards new solutions rather than patching over existing technology?
The behavioural pattern of consumers needs to change. We’ve signed a major deal with a larger manufacturer that operate in the world’s major markets. And they are going to put the tech in all of their garments, and hopefully train consumers to check that the product they are buying is real and to examine the ethics of where it was made. I think from that you’ll be able to adapt this into payments as well, not just under £30 payments – you could use VCode for any payment and it will enhance the security within it.
Would this shift fit with the increasing mobile payments trend?
Yes, and I think there is a lot of interest from banking security committees at the moment that are trying to tackle fraud in this area, as well as the consumers themselves. We’re not just trying to go at this by telling people we’ve got the best solution, we are discussing it together with the market to address the situation. I think any solution has to be easier for the consumer to adapt to the financial transaction, and a lot of banks are moving towards incorporating loyalty systems within the banks so you don’t have to carry wallets.
What advice would you give to institutions that are trying to procure a new piece of cybercrime technology?
I think they should properly identify what the problem is first, and address it with independent companies. But what I would advocate is not hiring five different companies to contribute to one solution, focus on finding one partner who can provide the whole solution. The crux is that companies need to step back in order to see the problem as a whole, and then use that viewpoint to address the issue properly. A lot of the companies in the market at the moment are just trying to bodge the issue by using their existing tech to fix it. And that’s where you get cyber-attacks, because there are inevitably holes in the systems.
They’ve spent so much money getting their cybersecurity system to where it currently is that they don’t want to go back to the drawing board and actually fix the issues properly. They’d rather keep adding to what they have bought.
What is biggest prediction of how the industry is going to change in 2017?
I think we will see in certain countries that we will have a unified wallet for identity, payments, and loyalty systems.