October 15, 2019
The financial services industry has seen a transformation over the past decade, and the emergence of technologies has brought several efficiencies in the way banks and FIs operate. With customer experience at the epicenter, tech innovations are trying to solve several problems, which include high cost, low speed, complex processes, security concerns, and unmitigated risks. Customer onboarding is one of the major functions that faces all these challenges on a regular basis. However, in the recent past, the customer experience of the retail side of customer onboarding has been relatively well taken care of with some interesting innovation around newer forms of ID verification and authentication techniques involving OTPs and selfies.
KYC/AML has been the focus of regulators ever since the global financial crisis happened. The emergence of RegTech as the disruptor brought tons of startup-driven solutions in the KYC and AML space, which uses AI/ML, Blockchain, RPA, biometrics, APIs, etc. These solution providers are proving to be the best allies a financial institution could ask for. To understand what these players can bring to the table as your partners, let's have a closer look at some innovative startups that have been leveraging these technologies for providing eKYC/AML solutions:
1. Checkr (Funding Value: $310 Million)
Checkr helps organizations to conduct background checks. The platform specializes in covering driving & criminal records as well as basic identity confirmation. It offers solutions to financial services, retail & hospitality, healthcare, non-profits, on-demand economy, manufacturing, software & technology, P2P marketplaces, higher education, staffing, etc.
2. Fenergo (Funding Value: $154.5 Million)
Fenergo provides software solutions for financial institutions to comply with regulations and data requirements while onboarding new clients. Its client onboarding lifecycle management solution offers features such as KYC compliance, client due diligence, client servicing, client account management, and legal entity data & collateral management. The company’s solution is compliant with KYC, CDD, AML, TDSI, MiFID II, FATCA, and Dodd-Frank norms.
3. Onfido (Funding Value: $100 Million)
The company provides KYC and AML solutions to eliminate dropouts, onboard more customers, and reduce fraud. It offers various checks, such as identity, right to work, documentation of images & criminal records, credit history, education, employment history, FCA, directorship, driving records, watchlists, and negative media checks. The digital verification platform enables businesses to verify the identity of an individual by conducting background checks. It leverages machine learning technology, to validate a user by comparing their identity document and with their facial biometrics. Additionally, the identity can then be cross-referenced against international watchlist databases. Onfido conducts background checks on users with the help of a photo-based identity document, a selfie, and artificial intelligence algorithms.
4. Trulioo (Funding Value: $80.7 Million)
Trulioo is the leading global identity verification provider specializing in anti-money laundering (AML) and Know Your Customer (KYC) compliance. Trulioo's identity verification solution, GlobalGateway, provides secure, real-time access to reliable and trusted traditional data sources such as public records, credit files, and government data as well as alternative sources including social networks, ad networks, mobile applications, and e-commerce to offer organizations an efficient and effective way to evaluate new & existing users through a single API. Trulioo is tackling one of the most ambitious challenges in global identity verification to build a universal solution for fraud prevention and compliance systems worldwide. With that goal in mind, Trulioo is helping create a layer of trust on the Internet by providing organizations with the ability to verify the identities of more than 4 billion people in over 50 countries worldwide.
5. Trunomi (Funding Value: $10.5 Million)
Trunomi, Inc. operates a consent-based data-sharing platform to streamline the customer verification process for financial industry clients in the United States as well as the rest of the world. It enables customers to digitally control and share their personal data via a personal data store in compliance with data privacy regulations. The platform can be divided into an enterprise dashboard, customer data stores, and consent certification. The platform provides customer consent and data rights management, which enables a business to request, receive, and capture customer consent to use their personal data. For businesses, it creates consent receipts and converts them to customer data rights, which are accessible across all data systems.
6. IdentityMind (Funding Value: $10 Million)
IdentityMind offers a SAAS platform for providing online risk management and compliance automation solutions for online merchants, financial institutions, payment processors & gateways, and payment service providers. The company’s solutions help businesses to reduce customer onboarding fraud & fraudulent transactions as well as enhance AML compliance, sanctions screening, and KYC compliance. It continuously builds, validates, and risk scores digital identities through electronic DNA (eDNA) technology to ensure global business safety and compliance from customer onboarding and throughout the customer lifecycle.
7. Quantiply (Funding Value: $7.8 Million)
Quantiply is a cognitive intelligence company that provides artificial intelligence-powered performance and risk intelligence solutions to enterprises & financial institutions and helps them address the challenges of know-your-customer (KYC), anti-money laundering (AML), sanctions monitoring, and market abuse. The platform analyzes the transactions and behaviors of individuals with specific entities that help to reduce the number of false positives and negatives, thereby reducing operational costs.
8. Encompass (Funding Value: $4.6 Million)
Encompass robotically automates information and news discovery for KYC requirements and enables them to adhere to anti-money laundering (AML) and counter-terrorism financing (CTF) regulations in financial, legal, and accounting businesses. The solution automates the KYC processes by providing simultaneous, real-time access to multiple sources of a global company and person data. It leverages robotic search functions to fulfill firms’ KYC requirements. The software enables KYC checks and initial client screening of corporate customers by using real-time data from more than 12 different information provider partners that include firms like World-Check, Experian, C6i, BvD, and Companies House. The web platform also generates an audit trail, which is essential for complying with AML4 regulations.
9. Signzy (Funding Value: $4.2 Million)
Signzy uses artificial intelligence to reduce the time taken for onboarding customers by up to 90% while ensuring regulatory compliance with KYC norms. Its main offering is a real-time bank-grade digital KYC. It uses AI for background verification and real-time document verification of business customers, as well as for video identity verification of retail customers. Signzy has developed an AI solution for distinguishing between various types of ID documents, shared through various channels like scans and photocopies with all their distortions.
10. Know Your Customer (Funding Value: $3.9 Million)
Know Your Customer provides end-to-end digital solutions for the compliance teams to authenticate the users’ information. The company provides AML, corporate and individual KYC, and ID verification solutions across multiple jurisdictions and languages. The company’s products offer features such as document collection, data assessment, on-going monitoring, and reporting & analysis. The documents for the authentication of users are collected from the official sources.
11. idwall (Funding Value: $3.8 Million)
idwall provides machine learning and optical character recognition-based anti-fraud solutions for small and medium-sized businesses. It offers solutions for document validation with OCR, facial recognition for user authentication, and background checks. The company’s mobile SDK sources users’ data from governments or financial institutions for verification processes. It also offers a real-time alert system to detect any differences in the data provided by the clients during sign-ups and purchases.
12. 4Stop (Funding Value: $2.5 Million)
4Stop is a leading fraud prevention provider that solves businesses’ risk-based approach through a modern, all-in-one KYC, compliance, and anti-fraud solution. 4Stop aggregates trusted information, managed services, data, software, and expertise. Through a single API, businesses access 1800+ global KYC data sources, data science as well as 4Stop’s proprietary real-time anti-fraud & monitoring technology. Businesses confidently anticipate risk and are empowered to make well-informed decisions, backed by quantifiable data to manage regulatory obligations and fraud risk to accelerate their business performance. 4Stop has been developed with a full understanding of compliance needs – locally & globally, today, and in the future. Activating the required KYC as per local regulations without multiple integrations, drain on development resources, and time-to-market are primary pain points that 4Stop solves. 4Stop provides global KYC in real-time for compliance in a fail-safe, future-proof, and simple manner.
13. Veri5Digital (Funding Value: $2 Million)
Veri5Digital is a software service provider from Khosla Labs, a Khosla Ventures-backed company that offers Digital India services (government and regulated systems) for the private sector. It provides machine learning and artificial intelligence-based identity verification and user onboarding solution. The solutions offered by the company are compliant with the norms of KYC, UIDAI, and AML. It also offers Aadhaar-based verification solutions, including hosting for licensed entities. The company provides mobile and web SDKs or APIs for businesses.
14. Jewel Paymentech (Funding Value: $1.55 Million)
Jewel Paymentech offers solutions to help banks and payment facilitators using AI, machine learning technology, and predictive analytics. It conducts merchant due diligence for merchant e-KYC and onboarding. Jewel Paymentech’s onboarding platform ‘Capture’ digitizes merchant application forms and alerts users of potentially fraudulent merchant applications. It offers a patent-pending Card ID Engine that enables users to onboard pre-screened customers by authenticating the ownership of their debit/credit cards. It also offers an SMS Validator engine that verifies account ownership and pre-populates the application, thereby enabling existing bank customers to speed up their onboarding process.
15. FRS Labs
FRS Labs is a technology company that specializes in fraud risk and security products.for telecom, banking, and insurance industries. FRS Lab's Kyzo, is a personal digital identity application. It is built on a simple consumer interface with only two options: scan and share. The software behind the upload is designed smartly, such that it automatically recognizes the document and cuts out noise, without any input from the consumer. The company's other products include the Orpheus-subscription fraud management system, Atreus-real time application fraud detection system, Prism-international revenue share fraud detection, Vistas-a smart visitor access system, and Atlas-prevent security breaches with voice biometrics.
And a bonus one:
Tradle uses a blockchain to bridge internal and external financial networks to achieve user-controlled KYC portability. Tradle’s simple, chat-based customer engagement platform for KYC is one of its essential differentiators and advantages. Instead of typical KYC forms, Tradle collects data via chats and uses blockchain to store and verify the collected data. This unique chat process keeps clients more engaged, and the blockchain keeps information more secure, letting companies verify customers and their easily and more effectively.