NeteraPay joins forces with Nordigen

NeteraPay is a Czech licensed payment service provider and electronic money issuer with over ten years of experience in the financial industry. The company provides a variety of services to their customers, including the management of fintech companies’ payment accounts, e-wallet payments, payments through mobile operators, and the automation of wire transfers, both receiving and sending. Their products are focused on enabling customers to securely pay online.

NeteraPay’s integration with Nordigen allows the firm to add an additional verification method to their service through Open Banking, helping automate and simplify the process of customer authentication. This option enables the company to securely link directly to client bank accounts to perform mandatory KYC checks to identify consumers and create risk and financial profiles.

Nordigen provides free access to Open Banking data and data insights. Nordigen's free API connects to more than 2,100 banks in Europe and serves fintech companies and developers in 31 European countries, including the UK. Nordigen is a licensed Account Information Service Provider (AISP), regulated by the Financial and Capital Market Commission of Latvia and authorised in 31 European countries.

Open Banking – how it supports KYC processes

Open Banking can help reduce compliance costs by improving the onboarding process through leveraging the power of connectivity and offering a more data driven approach to managing risk. The use cases that Open Banking can support include retrieving information about the basic details of the user, validating their source of wealth, providing transactional data to support fraud analysis, and bringing together a range of information sources that wouldn’t have been available to financial institutions before Open Banking.

Financial institutions have a limited view of the client's behaviour when the business relationship is initially established. The situation becomes more complex when the client goes live and the financial institution has limited visibility of their day to day activities. Using Open Banking firms could have access to a trusted source of transaction data, directly from any other financial institution storing data about a particular client.

Open Banking usually enables firms to access more data, which is the first step in unlocking a more consolidated view of client behaviour.

The importance of KYC

Any company that offers financial services must meet KYC requirements. The penalties for failing to do so can be severe, ranging from fines to criminal prosecution.

For fintech companies, adhering to KYC and anti-money laundering regulation may come with a number of challenges. Therefore, in order to increase customer conversions and prevent drop offs, fintechs try to manage and limit friction as much as possible.

Unfortunately, KYC protocols by necessity must introduce a certain level of friction into the sign-up process. It’s this friction that helps businesses identify potential instances of fraud, identity theft, and other financial crimes.

Even so, compared to legacy institutions known for slower, more nuanced KYC compliance procedures, fintechs are nimble and have more accessible processes as their services are fully digital.

Already, modern technologies like biometrics, artificial intelligence, and blockchain give companies new ways to achieve compliance with KYC requirements while improving user onboarding experience, limiting human interference, enabling greater access to financial services.