Tuesday Team Talks № 13
Matching Verified Lenders and Borrowers
Dear Community,
As part of our community engagement initiatives, we release educational blogs for our users to learn about the intricate business processes behind our platform, and explain some of the motivations behind them; essentially what we do and why we do them. This week, we’re discussing the role of identity verification in the onboarding process.
Recently, Shapeshift, a cryptocurrency exchange company, was a big topic of discussion in the news for introducing mandatory KYC for its users to utilize their services. Having historically enabled users to trade with total anonymity, this faced great backlash from their community — as transactions of value are instantly fulfilled and exchanged, with audit trails on the blockchain; it was not mandatory to know who you were trading with. However, for certain businesses, identity verification is essential to ensure everyone within the ecosystem is protected — especially in marketplace interactions that extend over a period of time.
How Does Identity Verification Help Me?
Let’s dive into some examples. As an investor interested in lending money, it would be important to you to know are lending to a legitimate borrower, as opposed to a an impersonator using fake identities to convince the obtain better rates with inaccurate credit scores. Lending to such scammers may lead to unexpected higher rates of default and a extreme likelihood that the loan will never be repaid. Conversely, borrower would expect to receive funding from the lender they had applied to, based on reputation and additional services provided. Popular matching platforms such as AirBnB also have implemented government ID checks before guests are able to book certain homes. This is necessary in order to protect both parties. In all these situations, because there are extended obligations that the parties in the transaction have to continue, there is an extended trust requirement.
How Do We Implement KYC?
At FintruX Network, we strongly believe in fostering an open ecosystem where a variety of innovative service providers are available to our users. We are always on the lookout for productive partnerships with like-minded companies focused on delivering solutions for SME growth. We are proud to have been onboarding several KYC solutions to assist with requirements in different regions in the world for our lending operations. Our most recent is Traceto. Traceto is a decentralized KYC blockchain project that is attempting to build inclusive KYC solutions for cryptocurrency market participants.
In this week’s Tuesday Team Talks, we’re pleased to feature a brief Q&A with Dan Poh, Co-Founder of Traceto to help explain more about KYC and AML.
- What is KYC/AML?
Know Your Customer (KYC)
Know Your Customer (KYC) involves the set of processes where an organisation demonstrates to regulators that they have assessed various risks, including money laundering, terrorism financing, credit worthiness and product stability prior to and throughout any business relationship with the customer.
Anti Money Laundering (AML) & Counter Terrorism Financing (CTF)
Anti Money Laundering (AML) regulations are designed to emplace controls that guard against the flow of illicitly obtained funds through the financial system. Counter Terrorism Financing (CTF) refers to the set of controls aimed at eliminating the flow of financial resources to terrorists and terrorist organisations.
2. Why is KYC/AML so important for organizations like FintruX Network?
Governments and regulatory authorities around the world are tightening control over regulatory compliance. The Financial Action Task Force (FATF) has also issued several guidelines over the years. Despite the increasing emphasis on KYC, some companies may still fail to realize the importance of KYC processes and that KYC is a mandatory requirement for the identification and verification of clients’ information. Many crypto companies do not meet KYC standards traditionally required by financial institutions due to lack of expertise and resources to keep up with evolving compliance regulations.
FintruX Network’s mission is to make financing a no-brainer for both borrowers and investors. In order to give users peace of mind when utilising the FintruX P2P lending platform, conducting the correct KYC/AML process is therefore essential to ensure that both borrowers and investors are assessed for various risks, such as money laundering and terrorism financing prior to and throughout any business relationship with the customer.
3. For the interest of our readers, please share an overview of Traceto.
traceto.io is a decentralised Know Your Customer (KYC) network that provides an inclusive KYC solution to cryptocurrency and blockchain product companies by fusing Smart Contract and Artificial Intelligence technologies. Leveraging on over 5 decades of experience in Compliance and RegTech, traceto.io’s vision is to bridge the gap between the real and virtual world KYC processes.
4. How do you differ from other KYC/AML service providers?
traceto.io is built by a team of regulatory experts with over 5 decades of compliance experience in banks and RegTech startups. We offer feasible and functional RegTech solutions to the community as well as our clients. It is essential for the people behind the products to have deep regulatory knowledge, lived through and understand the ways of compliance procedures. We provide a unique KYC automation tool specifically designed to meet the regulatory requirements for Blockchain and FinTech startups, P2P Lending/Funding platforms, small medium financial institutions, as well as professional services providers such accountants and lawyers. Unlike other service providers, our KYC/AML solution provides risk assessment, risk bucketing, screening, record keeping, data repository and so on, that satisfy a number of key regulatory requirements in respect of AML/CTF. Most importantly, our solution utilises facial similarity and verification to detect fraudulent profiles. Our global trusted KYC/AML solution has attracted over 750 live clients from different parts of the world, and growing.
By utilising our state-of-the-art KYC/AML solution and our support of KYC services, FintruX Network can be confident that they are operating under the highest industry standards of KYC compliance going forward. This will allow them to focus on delivering what matters most to their end users — making unsecured loans easy, fast and highly secure with their global marketplace lending ecosystem.
5. What can we expect from traceto.io over the next few months?
The upcoming months will be a truly exciting period for traceto.io. Between September to October, the traceto.io team will be launching several products. An alpha version of User Dapp will be released next month. Following which, the beta version will be released sometime in October. Lastly, after these successful launches, traceto.io will go live on Mainnet.
The FintruX Network participants will be one of the first users of the traceto.io decentralized KYC network and services when it becomes available in the coming few months. We look forward to a mutually beneficial relationship and are excited about the possibilities to follow!
Yours Truly,
The FintruX team
About us: FintruX Network is the global P2P lending ecosystem powered by blockchain and no-code development. FintruX facilitates marketplace lending in a true peer-to-peer network to ease the cash-flow issues of SMEs that typically face challenges getting loan financing, such as startup companies.
Find us on our: Website ; Twitter ; Facebook ; Reddit; LinkedIn
Join our mailing list to stay up-to-date and get access to exclusive content.
