FutureBank and IDVerse Partner to Fight Cybercrimes

IDVerse is the premier ID verification service on the FutureBank platform, providing quick and secure digital identity verification (IDV) services to its banking customers.
Through this partnership, new FutureBank customers can access the IDVerse software as part of its offering, while IDVerse customers looking for a middleware platform can use the benefits of the FutureBank platform.
Generative AI is breeding different fraud types, and cybercrime is predicted to become the biggest economy in the world in the next 18 months. FutureBank and IDVerse have joined forces to keep their customers safe from these unwanted attacks and manual bias.

London, UK – 5 September 2023 – The customisable and compliant embedded finance platform, FutureBank, has partnered with world-leading digital ID verification company IDVerse (previously known as OCR Labs Global) to further its digital transformation and accelerate customer onboarding through swift and secure digital identity verification (IDV).

Through this partnership, new FutureBank customers can access the IDVerse software as part of its offering. IDVerse customers looking for a middleware platform can connect their API credentials to benefit from FutureBank’s platform.

Bank technology is clunky and rigid, and it needs forward-thinking technology partners to stay up to date. Middleware platforms offer technological flexibility that banks and fintechs can’t build themselves, thus preventing downstream fraud and supporting the full customer journey.

FutureBank is an integration platform for core banking providers that embeds finance services. It acts as the glue between a bank and a third-party provider they want to integrate with. It helps banks and fintechs launch new products better, faster and more securely.

IDVerse is the most certified Identity Service Provider (IDSP), with 20 certifications for the Right to Work, Right to Rent and Disclosure and Barring Service (DBS) from the United Kingdom’s Digital Identity & Attributes Trust Framework (DIATF).

Through its Zero Bias AI™ tested technology, IDVerse is pioneering the use of generative AI to train deep neural network systems to protect against discrimination on the basis of race, age and gender.

Sergio Barbosa, CEO at FutureBank, said, “Generative AI is breeding many different fraud types. With ChatGPT, fraudsters can create very authentic documents and profiles for people at a low cost. We were impressed by IDVerse’s capability to stop fake IDs from making their way through the system and its fully automated approach that works better than humans.”
Barbosa continued, “Cybercrime is currently the third biggest economy in the world, and predictions show that in the next 18 months, it will be the biggest economy in the world. We are delighted to partner with IDVerse to protect our customers from unwanted attacks.”

Russ Cohn, General Manager EMEA at IDVerse, added, “It is already very easy to create a realistic fake person in as little as 15 minutes using online tools readily available on the internet. Synthetic media is becoming the new tool of choice for fraudsters looking to make money. We estimate that there is a 400 percent year-on-year increase in the use of deepfakes in creating fake identities.”

Cohn continues, “Our fully automated identity verification system can offer FutureBank customers a reliable solution to spot deepfake accounts that fraudsters are increasingly trying to create. IDVerse’s cutting-edge technology maps the facial genome and can detect below-the-skin activities, such as a heartbeat changing the colour of the skin, which the human eye cannot see. These natural yet invisible patterns from faces help verify that an image is of a real human, not a deepfake.”
For more information, visit www.idverse.com

Data sources and PR mentions

The Disruptive Force of Fintech: How will these Top 5 Trends evolve in 2023?

The finance industry has undergone a major transformation over the last decade, driven by the rise of fintech. But are these trends here to stay, or just a passing fad? Let's dive into the top five fintech trends and examine their future potential:

Artificial Intelligence and Machine Learning - AI and ML have been hailed as the future of finance, but are they really? While these technologies can automate certain tasks, they still have limitations and can make mistakes. It is predicted that AI and ML will play a major role in finance, but it will not fully replace human decision-making. For example, in recent years, several banks have implemented AI-powered chatbots to provide 24/7 customer service, but human oversight is still required to resolve more complex issues. Moreover, according to a recent survey, about 60% of consumers trust human customer service representatives more than AI-powered chatbots.

Digital Payments - The convenience factor is driving the shift towards digital payments, but will this trend continue to grow? It is predicted that digital payments will continue to increase in popularity, with more people valuing the speed and ease of digital transactions over traditional methods. For example, mobile payment platforms such as Venmo and PayPal have seen rapid growth in recent years, and there is rumour of Twitter becoming a payments platform. More businesses are now accepting digital payments as a result of the pandemic. In addition, the rise of contactless payments, enabled by near field communication (NFC) technology, has further fuelled the growth of digital payments.

Blockchain - Blockchain-powered platforms and ecosystems are often touted as the solution to all financial problems. We are through the trough of disillusionment, but we are yet to see wide adoption. It is predicted that blockchain will see widespread use in finance in the coming years, as the technology matures and more people become familiar with it. Several countries are exploring the use of blockchain for central bank digital currencies, which could potentially revolutionize the financial system. Moreover, blockchain has the potential to increase transparency and security in financial transactions, as well as reduce the costs associated with intermediaries. As we have seen with recent events like what happened to FTX for example, the volatility in this space is alarming to many individuals and institutions.

Open Banking - Open Banking has the potential to change the financial landscape, but will it actually be able to deliver on its promises? It is predicted that open banking will continue to grow, as more financial institutions open up their data to third-party providers and consumers become more comfortable sharing their financial information. In recent years, several countries have implemented open banking initiatives, allowing consumers to easily access and compare financial products and services from multiple providers. Additionally, open banking has the potential to increase competition and drive innovation in the financial industry, as well as provide consumers with more control over their financial data.

Neobanks - Neobanks have disrupted the traditional banking industry, but are they here to stay? It is predicted that neobanks will continue to challenge traditional banks and win over consumers, but it remains to be seen whether they will be able to compete in the long run with established players in finance. For example, neobanks such as Monzo and N26 have attracted millions of customers with their mobile-first approach and low fees, and traditional banks are starting to respond with their own digital-only offerings. However, the challenge for neobanks will be to maintain their growth and compete with traditional banks, who have the advantage of established customer bases and established trust in the market.

The fintech industry is full of potential, but also full of uncertainties. These 5 trends are set to create the foundation of our future financial landscape, but in 2023 and beyond we will see them disappear into the background for most individuals and institutions with their convergence into, and the rise of, embedded finance. There will be consolidation in the banking ecosystem across traditional banks over the next few years as they compete to remain relevant, and brands will begin to claim ownership of the financial data associated with individuals and institutions. The individuals and institutions in turn will relish in the convenience of a world where they don’t really need to understand the intricacies of the financial ecosystem, they can just focus on doing whatever it is that they’re doing.

Infographic on the Top 5 Fintech Trends in 2023

Brainstorm Feature: Finding the data to reach Africa’s unbanked

Article Source: Brainstorm October 2022 - ITWeb | Featuring Sergio Barbosa, CEO, FutureBank

Transforming the Know Your Customer verification process will unlock countless opportunities for Africa’s unbanked to participate in the digital economy.

Sergio Barbosa is featured in ITWeb's Brainstorm Publication by Joanne Carew (14/10/22).

Read the PDF version of the blog below:

Finding-the-data-to-reach-Africa Download

Subscribe to ITWeb's Brainstorm to read more articles from the Business Technology Magazine here.

Reaching new customers through fintech partnerships

Sergio Barbosa, CEO, FutureBank

Co-founder and CIO of enterprise software development house, Global Kinetic, Sergio directly heads its open banking platform, FutureBank. A skilled software engineer, innovative product developer, and keen business strategist, he has participated in several notable fintech milestones, including building the southern hemisphere’s first digital-only bank all the way back in 2002.

Back in October, I made an argument for o pen banking’s relevance to regional American banks and credit unions. I listed several ways that open banking platforms could benefit institutions like these – specifically those with under a billion dollars in assets.

My focus in this post is on the enormous potential banking-as-a-service (BaaS) and banking-as-a-platform (BaaP) have for helping traditional banks reach new customers, including those that were uneconomical, unreachable, or unheard of in a physically restrictive and data deficient banking paradigm.

Platforms that leverage APIs and facilitate integration can enable banks to benefit from fintechs’ data-driven and customer-centric approach to innovation by offering them the embedded finance foundation that fintechs need in return for greater customer acquisition on the bank side.

They can also enable banks to develop highly engaging new offerings faster, more efficiently, and with far less risk than before. Both fintechs and banks could leverage a combined customer data set in various ways – with their approval, of course.

Let’s look at three broad opportunities banks and credit unions have to gain new customers or members through open banking partnerships.

Meeting the needs of niche markets

What bank is the best fit for serial house restorers? And for TikTok entrepreneurs? Convenience store franchisees? Everything counts in large amounts, as the song goes, and the economies of scale that digital technologies can provide could bring millions of potential customers within reach of the smallest bank. Sifting through them, you’re bound to find a market, even a very niche, geographically distributed one.

Going “niche”, as they say, means targeting market segments and communities united by emotional or cultural bonds, personal concerns, and unmet financial needs that have little to do with geography.

US banks and credit unions have long focused on the needs of narrowly-defined communities, but their geographical footprint has almost always been limited by cost considerations related to their physical branch and ATM networks, if not by their charters too.

No more. Digital channels have freed them – and their competitors – to market to prospects and serve customers far beyond their home county, state, or region without much additional outlay. To get a good return on investment, however, they have to hone their value proposition carefully – and that may require further specialization.

Going “niche”, as they say, means targeting market segments and communities united by emotional or cultural bonds, personal concerns, and unmet financial needs that have little to do with geography. These groups may always have been there – ethnic, racial, or sexual minorities, for example – or could be entirely new – think of crypto-asset traders and gig economy workers.

It’s an approach that many smaller financial institutions see as a way to differentiate themselves from competitors large and small, gain customers, and profit from value-added services delivered through low-cost channels – even as banking infrastructure and traditional banking products are commoditized.

Some examples:

Incumbents’ digital-only spin-offs: Daylight, MetaBank’s LGBT+ banking brand; Majority, Sutton Bank’s app for migrants; and BankMD and Laurel Road, from TransPecos Banks and KeyBank respectively, both aimed at medical practitioners
Incumbents narrowing their focus: BankProv, formerly The Provident Bank, now catering to crypto-asset traders; North Side Bank & Trust, specializing in serving building contractors; and many others that have severely limited the verticals they pursue.
Neo-banks using another, licensed provider’s BaaS: Purple, for people with disabilities, leveraging The BankCorp Bank’s infrastructure; Cheese for Asian Americans and Shariah-compliant Fair, both backed by Coastal Community Bank; eco-sustainable Tomorrow and startup-focused Penta, both Solarisbank partners; Nerve for musicians, with Piermont Bank; and Lance for gig economy workers, backed by Blue Ridge Bank.

All of these businesses reflect something profoundly different about the open banking paradigm: banking is increasingly conceived of as something rooted in everyday life, occasioning a far wider range of interactions at many more moments in the day.

High-context recommendations – product and service cross- or up-sell, meaningful communication and useful advice, shortcuts to the next step on any given journey – these all depend on knowing your customer intimately and understanding the motivation behind their transactions.

Fintech partnerships help these financial institutions:

Gain deep insight into the unmet needs of their market, so that they are better able to identify new opportunities and enhance the value and quality of their offerings
Determine more accurately what motivates customer behavior, deduce their desired end goal, and predict their next step before they know it themselves
Build an ecosystem of complimentary partner offerings for greater customer satisfaction and profit

Meeting the needs of the unbanked

The US federal Community Reinvestment Act obliges financial institutions to serve neighbourhoods across a range of incomes in their catchment, but industry consolidation, commercial imperatives, as well as patchy enforcement have seen low-income communities – urban as well as rural – hit disproportionately hard by branch closures spanning decades. It’s a leading cause of financial exclusion, together with lack of government ID, insufficient credit history, and unaffordable or unpredictable service fees.

Open banking platforms can go a some way to addressing financial exclusion while helping mid-sized banks and credit unions reach new customers at reduced risk.

According to the US Federal Reserve, 6 percent of adults in the United States are unbanked, while 16 percent are under-banked (the FDIC has similar figures). These millions of Americans represent frustrated human potential and an untapped market. Digital service provision is not a cure-all, as the Fed pointed out just before the onset of the pandemic, but open banking platforms can go a some way to addressing the problem while helping mid-sized banks and credit unions reach new customers at reduced risk.

Partner-provided data concerning devices, payments, online and social media interactions, etc., combined with third-party AI systems help manage risk and improve efficiency, so that the market can be served more cheaply and effectively.

Fintech partnerships help these institutions:

Rebalance their credit scoring models and improve their accuracy in order to reduce risk and consequently drive down service fees
Redesign onboarding/KYC processes as 100-percent mobile, user-centric experiences, thus taking down a significant barrier to entry
Develop a deeper understanding of these populations’ unique banking and payments needs, the better to offer tailored products and services

Meeting the needs of other businesses’ customers

Open banking – BaaS in particular – has opened many senior executives’ eyes to the exciting potential in distributing financial services over third-party channels, essentially reaching and making money from people and businesses with which their institution does not have a direct relationship.

With embedded finance, the bank brand may take a back seat to another – a racing car maker, a global charity, even a Kardashian or two – but the opportunities to extend your reach are immense.

These third parties are often fintechs, but they could be any enterprise looking to leverage banks’ money-moving infrastructure, rich troves of data, and competencies in areas like fraud detection and prevention, identity and access management, and regulatory compliance. Banks, in turn, either gain revenue directly from the fees they charge or benefit from their products’ relatively cost-effective exposure to a wider, captive audience.

Some examples:

Financial institutions and fintechs: Cross River providing private-label banking services to Affirm, Best Egg, Coinbase, Stripe, and TransferWise; The Bankcorp Bank and Stride Bank enabling Chime’s banking and payments services; TrueLayer’s PayDirect linking hundreds of enterprises like Revolut, Trading 212, Nutmeg, and LeoVegas
Financial institutions and retailers: WebBank issuing consumer and small-business loans on behalf of Dell, Prosper, PayPal, Fingerhut, LendingClub and Yamaha; Green Dot collaborating with Walmart on a stream of financial products and services;
Financial institutions and others: Railsbank providing embedded finance to McLaren F1 via QNTMPAY; Marcus by Goldman Sachs providing branded savings accounts through the AARP; Barclays enabling Nimbla’s customers the ability to insure individual invoices against non-payment in real-time; DBS Bank launching a real estate marketplace with EdgeProp

Embedded finance is an especially promising development. It allows financial services providers and an almost limitless number of non-bank brands to integrate financial services seamlessly in websites, apps, games, and the point of sale for greater convenience and deeper engagement. The bank brand may take a back seat to another – a racing car maker, a global charity, even a Kardashian or two – but the opportunities to extend your reach are immense.

BaaS partnerships help these institutions:

Grow market reach and customer base through partners’ own distribution channels and sales and marketing spend
Generate new revenue streams by leveraging existing infrastructure, expertise, and data
Shore up brand equity with branded services neatly embedded in well-designed and convenient third-party digital experiences

You don’t have to be a fintech startup to be excited by the future these partnerships will help build. Regional banks and credit unions have as much to gain as any other stakeholder, and with the right partners and a few good ideas, they will.

FutureBank is a fintech marketplace and technology platform enabling banks and credit unions of all sizes to test a wide range of third-party products at scale. There is minimal upfront cost and significantly less risk involved in making an investment. Compatible with over 6000 financial institution back-end systems, we offer a single integration point for fintech technologies for rapid time-to-market.

Looking to explore new opportunities in open banking?

Contact FutureBank for a presentation.

Solving the software integration challenge, FinTech's last mile

Sergio Barbosa, CEO, FutureBank

Eyes on fintech's last mile

Many of the banks and credit unions that we speak to are no less “progressive” than their tier-one peers when it comes to recognizing the potential of platform banking or banking-as-a-service. They just don’t have the same budgets to spend on new talent, in-house innovation hubs, and large-scale partner programs.

You’ve got to spend money to make money though, right? That’s where fintechs can help by providing banks with reasonably priced know-how and out-of-the-box financial services developed with an entirely new focus on the digital end customer.

There are new sources of revenue to be gained in both directions, of course. My focus in this blog post is, however, not on the opportunities for value creation and exchange in bank–fintech partnerships – as central as that topic is to everything we do at FutureBank. Today, I want to look at a common hurdle for fintechs getting to that point: software integration. It’s fintech’s last mile.

Software integration: Here be monsters

The promise of a stress-free go-live – “fast go-to-market”, “rapid ROI”! – typically features in every piece of fintech marketing material, with assurances based on the modern, lightweight deployment model and excellent APIs. Things tend to run differently in reality, however, and fintechs often find themselves spread thin when integrating their technology at the bank.

Implementation teams are usually ignorant of what they will find at the client. Even smaller banks have many moving parts, constituencies, and the various systems they use are technologically complex and interface in unpredictable ways. The scale of banks’ regulatory burden, especially as it pertains to digital security and risk management, is also something few fintechs really understand, despite it being a factor in nearly every answer banks give to questions fintechs ask.

When the inevitable complications arise during integration, time is lost and costs – all the fintech’s own – pile up. Progress updates may remain cordial, but the project draws senior staff away from other important aspects of their business, including landing the next sale and building the next killer feature of their product.

Sound familiar?

Solving the software integration problem for fintechs and their customers

As enterprise software integration experts of long-standing, my colleagues and I at Global Kinetic have seen this dynamic – or something like it – in play many times. Knowing the nature of the beast ahead of time would help providers plan and act with speed and precision, freeing them sooner to return to what they enjoy doing most.

That’s why we built FutureBank, a banking-as-a-service platform that integrates into the world’s most widely deployed core banking systems. It provides fintechs with a fully kitted-out digital banking sandbox for testing their software integrations against these and helps determine the level of custom work required for non-standard or customized versions out there.

Flipped 180 degrees, FutureBank becomes a fintech marketplace where banks and credit unions are able to discover, test, and deploy pre-integrated third-party products and services at low cost, with considerably less risk than they would before. We have many products on the platform, and we onboard new providers every month.

What is the experience like for our fintech customers? I’ll describe a couple of case studies in future blog posts.

Partnerships are the lifeblood of open banking. Contact FutureBank to discover how we can help you work better together.

Read our previous post here: Regional banks have a big opportunity in open banking

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