Serialization isn’t enough to drive consumer authentication; report

Serialization is increasingly used for track-and-trace, but on its own won't result in a consumer authentication revolution, says a new white paper.

That is because - despite many qualities - serialization has serious limitations in brand protection and a new-generation technology is needed, according to Avi Chaudhuri, senior global partner at Systech who authors the new paper along with Jim Lee.

At the heart of the problem is that there has traditionally been a trade-off between the robustness of the security technology, and the ability to empower consumers to use it to verify the authenticity of a product, they suggest.

First-generation, passive technologies such as holograms, colour-shifting inks and other distinctive pack or product features are easy for consumers to check, but can be relatively easily copied by counterfeiters. Second-generation technology – which include additive technologies such as taggants or RFID tags – offer great security but often need specialised readers that take them out of the hands of consumers and make them useful mainly for market surveillance activities.

What is needed to gain real traction in consumer-focused product authentication is a third-generation technology – which is easier for customers to use even before they purchase an item, and also offers robust security and a zero-failure rate, Chaudhuri told Securing Industry.

A few years ago it was suggested that the consumer empowerment restriction “could be overcome by mass serialization – placing a unique number on a pack that could be verified either by texting it via SMS to the solution provider or embedded into a 2D barcode and scanned that with a mobile app. If the number is valid, then the product should be as well,” he said.

That assessment is however undermined by some important limitations when it comes to brand protection, according to Chaudhuri, although he stressed it remains a fantastic technology for track-and-trace.

In an earlier white paper, Systech and Lee identified five factors that have contributed to serialization’s failure to penetrate the consumer products market, not least of which are the challenges associated with putting a serial number on the pack in terms of complexity, operational changes and cost. While regulations have forced adoption in many pharma markets, there is no legislative mandate in other markets, or indeed for other product categories including consumer products, said Chaudhuri.

Added to that, with QR codes becoming widely used, how does one go about getting message across that some codes are serialised? The answer is extensive and likely expensive public awareness campaigns, which are not an attractive option to brand owners who don’t necessarily want to emphasise that they have a counterfeiting problem.

Other questions about ownership of the technology, unclear business benefits and last but certainly not least security flaws – which include the potential of serial numbers to be copied and mass “culling” of numbers from some supply chain nodes – have held back adoption.

“Although introduced with great fanfare as a consumer authentication tool, the well-acknowledged security problems that have plagued this technology now limit its serious use as a brand protection solution in virtually all product segments,” said Chaudhuri.

The security issue with serialization was highlighted in a PwC report earlier this year, which pointed out that serialization technology and the regulatory controls that govern it are “porous” and suggested that even at peak effectiveness, conventional mass serialization will only catch 35 to 50 per cent of falsified drugs.

PwC suggests it would be relatively easy for counterfeiters to copy and place forged codes on packs of falsified drugs, and slip them into distribution channels with little chance of detection, provided they reach the point of dispensing before legitimate products bearing identical codes.

A third way?

Systech believes it has developed a third-generation technology that dovetails the consumer empowerment and robust security requirements, in its recently-launched UniSecure fingerprinting and authentication technology for brand protection.

UniSecure relies on the generation of a unique signature, derived from the tiny imperfections and variations in a printed mark, which can be stored online and authenticated using a mobile app. The concept allows authentication to be become part of any barcode or other data carrier.

UniSecure was introduced in late-2015 and while still mainly at the pilot implementation stage is starting to gain traction amongst pharmaceutical companies – who are finding value in using UniSecure as an additional layer to their serialization requirement particularly for higher-end brands – as well as food and beverage (especially the spirits sector), personal care and automotive.

There is already commercial product using the UniSecure technology out there in the market – but for now at least Systech is keeping those early-adopters confidential.

An important strategy is to use the technology not simply to authenticate, but also to connect the consumer with the product – and to do that you need to give customers an incentive.

“The biq question is how we get from where we are today with brand protection technologies to a mass adoption mindset,” Chaudhuri told Securing Industry. “That requires a paradigm shift, and some of that shift will come from allowing consumers to get something out of that process.”

“People want to know more about disease, drugs, they food they are eating – so how cool would it be if consumers can scan a barcode and get something of importance to them, such as information, drug data, a recipe for the product they are buying, or the chance to win a sweepstake?”

By doing that they can use consumer engagement and brand promotion as a driver for tapping into the undoubted power of having legions of consumers authenticating their products in the marketplace. In that scenario, the brand owner could of course choose whether or not to make the consumer aware of the verdict of that authentication.

“The serialization industry has been a big driver for that idea, and using it alongside other technologies such as intrinsic fingerprinting and allied technologies will now be able to run with this idea.”

Pre-purchase verification

One of the big drawbacks of serialization in this setting is that it makes it difficult for consumers to verify a product before purchase – because serial numbers can typically only be checked once, i.e. after purchase.

Using separate authentication technology as an additional layer of security in addition to serialization could be a workaround, but UniSecure bypasses the problem without the need to add something to the pack and production process, adding to the cost and complexity of deployment.

Of course, pre-purchase scanning isn’t really in the current mindset of consumers or retailers, so it would involve some change in behaviour, but Chaudhuri thanks that could be overcome quite easily by incentivising would-be purchasers, for example to check the status of product loyalty or warranty schemes or other promotions that might be activated on re-scanning.

Chaudhuri – who was himself affected by medicines counterfeiting more in the mid-2000s – is also firmly opposed to talking consumers out of the loop on this and relying on an inspector-driven programme.

“The more eyes we have on the problem, the better,” he said.