Heard about KYC (Know Your Customer) solution? Well, it’s kind of a digital product for banks and insurance companies that achieves high conversion rates while offering their customers maximum security and compliance with regulatory standards? Yes, that’s true! It’s an automated solution based on AI (artificial intelligence) which is the optimal identification solution for numerous use cases and industries. It enables compliance with regulatory requirements and security standards while providing fully digital customer experience and a fast and easy process.
And a Dutch fintech startup Safened has been implementing this technology for more than a year now. Recently, rebranded as Fourthline, and founded by Krik Gunning and Chris van Straeten — the company has been quite successful so far.
Born in 2017, the Amsterdam-based company is one of Europe’s fastest-growing fintech companies for digital KYC (know your customer). Fourthline helps banks and fintechs with their gatekeeper’s function by verifying the identity of thousands of new customers every day.
Trusted by banks and leading fintech companies, Fourthline verifies millions of identities for customers like N26, Wirecard, Allianz, Yolt (by ING), and many more. They aim to provide best-in-class fraud detection, at industry-leading conversion and compliance levels and they say that their mission is to protect the online financial system by using the most innovative technologies to develop the safest and most customer-friendly digital KYC solution.
Recently at Silicon Canals, we spoke to Krik Gunning who is the CEO of Fourthline and Duco van Lanschot, the company’s CCO, to find out more about what’s going on in this fintech firm and how does it work.
They say, “We share a love for fighting financial crime and building a beautiful product with a positive impact on the world. Fourthline is part of Safened Fourthline B.V. which is regulated as a payment institution by both DNB and FCA and offers a B2B deposit platform under the Safened brand. Our executive team has a combined experience of >80 years at top banks and consultancy. We verify the identity of thousands of new customers every day.”
Fourthline claims that it detects more than a third of the fraud by using technology that no other KYC provider has. Upon asking the company honchos as why did they decided to rebrand, here’s what Gunning says, “We were scaling two companies under one brand and they were two different products, which had different clients and a completely different revenue model. So, it made sense for us to take it one step further and rebrand.”
What about funding?
To date, Fourthline has received €13.5 million from Finch Capital and Rudolf Booker. They say this money is going towards attracting high-quality talent, and tech. “We want to be the frontrunner for leveraging the very latest technologies. Further, we are investing heavily in automation, algorithms and AI,” says Gunning.
Identifying fraud via your iPhone!
So how does it work? Duco explains, “When a customer is applying for a financial product, they take a picture of their ID, take a selfie and insert some data. The magic then happens in the background. We perform hundreds of checks on, amongst others, the ID document, biometric data, device data, whereabouts and global sanction lists. The customer gives information in 30 seconds, we run all checks in 2 minutes afterwards. Our algorithms and AI check all data and look at whether things like the geolocation of the phone and the address match up.” Krik adds, “at the moment, our Fourthline Formula catches up to 60% more fraud through analyses competitors don’t offer.”
With the new release of iOS 13 on September 19, this year, Fourthline introduced an innovative new way to verify identities. “We decided to leverage near-field communication with the new iOS update so that a customer can use the chip reader in their iPhone to scan any new passport that has a chip in it. We always want to be at the forefront of new tech,” says Gunning.
Future plans for 2019 and beyond
The Dutch startup has seen exceptional growth in a short period of time. The international expansion of mobile bank N26, at € 3.5 billion one of Europe’s highest valued fintechs, was made possible through the digital vetting of its new clients by Fourthline. At the launch of its KYC service for the financial sector at the end of 2017, the company had fewer than 20 employees. This has grown to a team of more than 150, spread across offices in Amsterdam, Barcelona, London and New York.
Talking about future plans, they haven’t yet scratched the surface of what they want to do in the future at Fourthline. However, van Lanschot reveals, “We are really focusing on improving our product while rapidly shipping new product innovations. Consultancy firm McKinsey sees Identity as a service as the next $20bn digital market. So we are just getting started and want to continue to grow by providing the best service for banks and fintechs.”
The future of fintech
Thinking about the future of fintech Gunning says, “5 years ago, ‘Know Your Customer wasn’t even on the radar for the banks, and now it’s a top priority.” He adds, “It’s ridiculous if you have to verify your identity every time when opening a bank account. In the future, customers will have only one E-ID which links to all different accounts.”
‘Blown away’ by the Blue Tulip Awards
When Fourthline was operating under Safened, they entered the Accenture Innovation Awards, which have since been rebranded as the Blue Tulip Awards.
The Blue Tulip Awards is a year-round event where innovative companies can enter to win various prizes including an acceleration package. There are eight different categories and Safened entered and won in the Finance category.
“We entered the awards because Accenture is quite professional. They have an excellent reputation and high-quality judges. I had no idea how much interest it would attract. There was so much energy throughout the whole process. I was really blown away,” says Gunning.
Further, he says it was quite beneficial for them to participate in the awards, “A lot has happened in the past year. Winning meant we got tonnes of media coverage.”
Tip to win Blue Tulip Awards 2020
Here’s a tip Gunning shares, “Get your story straight. You have to do an elevator pitch in 30 seconds. It’s super short and you need to be really clear on what you’re doing and what sets you apart.” He adds, “The Dutch are not good at telling the world what a great product they have created. So you really need to know how to showcase it.”
Here’s a call out for those who are interested to participate, the deadline for entering the Blue Tulip Awards is fast approaching. If you have an innovative product or startup, then make sure you apply before the deadline of November 17, 2019. For more information or to register, head to the Blue Tulip awards to reserve your spot.