From corporate banker to head of a startup – An interview with Torsten Sonntag, CFO and COO at VERIMI

Torsten Sonntag was working for one of the biggest German banks for 26 years. Now, he manages VERIMI, the Frankfurt and Berlin-based user identity management platform. The startup is backed by 10 large European companies, namely Allianz, Daimler, Axel Springer, Deutsche Bank, Bundesdruckerei, Deutsche Telekom, Lufthansa, Giesecke + Devrient, CORE and Here Technologies.

After 11 months since it was founded, VERIMI rolled out its MVP (or Minimum Viable Product) on April 10th across Germany. I talked to Torsten Sonntag about VERIMI’s structure and decision-making, the positive and negative reactions after the launch, the company’s vision, its go-to market strategy as well as the sudden retreat of the CEO Donata Hopfen.

Understanding VERIMI

First off, I wanted to understand what VERIMI truly is. As I would not necessarily identify as a tech geek, I asked Torsten how he would explain VERIMI to someone like say, my grandmother. In a nutshell, VERIMI basically acts as your ID on the Internet; in the future, users will be able to store all different kinds of data safely in a verified state, which will allow them to open bank accounts, book flights, rent cars, get a mobile phone contract or shop clothes without having to enter their data on the different web services.

The aim of this initiative is to integrate the green VERIMI button on as many web services as possible. The respective web servers then connect with VERIMI and download the information the user is willing to transmit from the VERIMI platform. This will result in a higher convenience as the user no longer has to enter all the data again. One of the key advantages of VERIMI is that users retain full control over their own data.

However, VERIMI  will not only provide identification services and data management, but also a payment service. Thus, I will be able to pay through VERIMI if I have deposited my bank data on the platform.

What is VERIMI able to offer now? What did you start with?

Right now, users can either enter their identity manually on VERIMI and be verified via a video identification process. Alternatively, a Deutsche Bank customer can transfer the already verified identity directly to VERIMI. In both cases, it is then possible to use the services of the first application partners: Deutsche Bank, Weltsparen, Compaio and Docyet with one click. Torsten understands this is still a rather small ecosystem, but he clarifies: ‘’Now that the MVP has been launched, we will gradually enlarge the ecosystem. We are working towards adding Allianz and Telekom. At the same time, we are in the process of fixing contracts with many companies outside the circle of partners, increasing the platform’s reach and relevance”. 

So VERIMI is a platform created by some of the biggest companies in Europe – who came up with the original idea?

In the financial industry, identity management is a highly relevant topic. Thus, it is no surprise that in 2016 CORE and Torsten Sonntag’s former employer Deutsche Bank teamed up to initiate this project. As they soon realized that the topic is highly relevant in many industries it was easy to win the 10 current partners.  “I think the accolade was when Bundesdruckerei joined the consortium because they believe that it is possible to digitise the ID card with VERIMI, which has not yet been achieved in Germany.”

Was there a concern to develop a product that would not be proprietary, in the sense that other organizations, even competing bank, would be able to offer the service to their customer base? In other words, is the incentive more financial than strategic?

Torsten agrees that this conflict would be quite presumable, but he believes that “by now, German companies have realized that each individual participant from any industry is too small to be able to compete globally, therefore the readiness to co-operate with national competition has become extremely high. So, the conflict to work with competitors exists, but one is prepared to accept it and to pull together in order not to fall behind the powerful global companies.”

What about the spirit among the 10 partners? Is there a majority stakeholder, and how do negotiations work internally? 

When I heard about the various stakeholders I imagined the negotiations and decision making to be rather complicated. From Torsten, I learned that all stakeholders have equal rights. He agrees that sometimes the number of parties involved can create challenges, but “with a good governance process you get this handled very well” and the fast implementation of the project seems to prove his claim. 

However, not everything has run smoothly until now. Shortly after the launch, VERIMI announced that CEO Donata Hopfen left. How are you dealing with this change of leadership and what were the reasons?

Apparently, a difference in vision about dealing with user data and distribution of decision making power among the three managing directors led to change in leadership.

Torsten does not see this change as a problem: “VERIMI has shown how quickly and situation-related we are able to react and find solutions quickly. With Jeaneatte Ratibor, we now have a colleague from Telekom in the management who has worked on the topic for over 12 months. We can thus move forward with high speed and without endangering our roadmap. Actually, it is a perfect solution. These things happen, and it is important to find a good solution that ensures high continuity.”

How was the feedback after the launch and what is your go-to-market strategy?

Every startup has to deal with critical voices. VERIMI apparently got a lot of positive feedback, especially for being able to launch after only 11 months. However, the main critical point was that one cannot really do a lot with it yet. Torsten agrees, but he says that this is part of the strategy and explains how:

VERIMI, like any other platform, has the classic chicken and egg problem. If there are no users on the platform, how is it interesting for web services (application partners), and vice versa? This is where the 10 partners come into play: on the one hand VERIMI tries to generate exponential user growth by activating the identity data of the partner’s existing customers and thereby become more attractive to other potential partners, thus growing rapidly and becoming more attractive for both users and web services.

However, providing a clear VERIMI USP is also a vital part of the strategy. ‘’We will be the first provider for verified identities in the digital environment in Germany. You can use your Google, Facebook or Amazon identity, but these are not verified identities and for certain use cases this will be needed in the future. For example, services in the financial industry, in the mobility sector, or for the entire e-government sector (which is currently under development). Thus, only through the service of VERIMI, it will be possible to use certain use cases in the future. That is our USP and that also sets us apart from competitors”.

Speaking of competitors, is there a race towards mainstream adoption between you and other initiatives like EUROPEAN NETID FOUNDATION (by Mediengruppe RTL Deutschland, ProSiebenSat.1 and United Internet)?

The market for ID management is slowly establishing and several initiatives have formed. VERIMI is the first to go live and is willing to co-operate but is also ready to compete:We have a high willingness to find cooperative solutions even if we are not yet there. In the end, we believe that with VERIMI we will have a more comprehensive range of services at our disposal than other initiatives. We also believe that with the early go-live of the platform we have a certain lead in the market and are thus actually quite positively positioned in shaping it.” 

How are you planning on expanding the business outside of Germany? Are the US and China also attractive for VERIMI?

“VERIMI has a clear strategic focus on Europe.” Torsten explains and emphasizes that even this task will be challenging enough, as a single go-to-market strategy for Europe won’t be possible; some countries have not really taken up this topic, while others already have similar initiatives. So, the strategies will range from simple implementation of VERIMI, co-operation with players that already exist and VERIMI franchise models. However, in order to pursue any of the strategies VERIMI strives to become an eIDAs certified trust service provider by the end of the year, which is the prerequisite for the service to be recognized in any other European country.

“Once we have gradually completed our European strategy then there is the possibility to think beyond the European borders but in the next step we think about Europe.”

Torsten is happy with the new challenge of working in a startup after 26 years of corporate life. Taking care of everything from scratch, from recruiting people to installing printers, are all hands-on topics, which he enjoys tackling with his new team. I wish Torsten and the whole VERIMI team all the best for their ambitious goal and I hope to shop my Christmas presents with one click on the green VERIMI button soon!