Fintechs are the future. Banks represent tradition. And in between … is our data.
The news is crawling with stories about data breaches. You don’t have to google “data breach.” Just read the national headlines, and you’ll find stories of lawsuits, money lost, and laws changing, all because of data.
As a fintech, how do you respond? How do you react to the ever-looming fraudsters, not to mention the increased compliance and regulatory issues?
On a recent episode of the Payments Innovation podcast, I interviewed Adwait Joshi, Chief Seer (actual title) at DataSeers, a company dedicated to “creating simple solutions to handling complex data.”
Adwait has used data to solve pain points in healthcare, animal health, and, now, financial services. Here’s how DataSeers is using data to create win-win-wins for consumers, banks, and fintechs:
Getting data out of silos
You can’t understand your customers without knowing their normal behavior, across all touchpoints.
DataSeers’ takes all a bank, credit union, or fintech’s data, regardless of where or how it is siloed, and connects all of it together to drive value. Their API-based solutions create links to drive insights on how consumers are behaving across financial products. Their solutions focus on 4 major areas:
There are many outcomes of linking all the data together; for one, fintechs and banks know which services to provide which consumers. But, also, it helps with fraud — fraudsters don’t stop after one attempt. They keep going, and by linking your data, you can flag them and stop them at every touchpoint across your ecosystem.
How to halt fraud (as it’s happening)
DataSeers provides APIs that can be integrated with a fintechs’s apps, web apps, platform, etc. Using their integrations, if a fintech (or bank) see’s fraud or potential money laundering, they can send a message instantaneously to DataSeers directly within the application. This stops fraud and money laundering in its tracks, halting future transactions, (and sometimes freezing in-process transactions).
Adwait said this provides 2 major benefits:
1) Stopping financial loss
Obviously, stopping fraud in real time can prevent substantial loss, especially in the prepaid space.
2) Better fintech-sponsor bank relationships
High-level fraud detection also drives better relationships between fintechs and sponsor banks, because fintechs can integrate DataSeers’ fraud detection on their end, and then detect and eliminate fraud before the sponsor bank even gets involved (and trust me, traditional banks like that).
Fintechs can utilize DataSeers as a plug & play
When fintechs approach a sponsor bank, they are often told they need AML, transaction monitoring, and fraud monitoring functionalities built into their system. It can take up to 9 months to build out these requirements. For fintechs, that’s a paralyzing time frame. DataSeers does all of this within their APIs, and, essentially, they offer a plug and play to fintechs, who can integrate with DataSeers’ APIs in less than a week to comply with their sponsor bank’s requests.
DataSeers is a win-win for sponsor banks & fintechs
The DataSeers system allows sponsor banks to drop into the data at their fintech partners to ensure compliance; also, banks and fintechs can utilize the DataSeers APIs to control which information is sent between the two.
Plus, since DataSeers works with fintechs or directly with sponsor banks, this provides an additional revenue potential for the sponsor banks: if a fintech doesn’t have the necessary monitoring or compliance systems in place, the bank can simply use DataSeers, then charge a compliance fee to the fintech. It’s a win-win: the fintech is up and running quickly, and the sponsor bank makes revenue.
You can configure DataSeers for a variety of products
Banks and fintechs often have dozens of different products — perhaps a complex B2B2C product, all the way to simple gift cards. With DataSeers’ APIs, you can configure different rules for each product and view each under its own micro lense.
What’s on the horizon for financial services?
I asked Adwait what he sees happening in the financial sector within the next decade, and here’s what he said:
1) For starters, many smaller community banks are becoming sponsor banks for fintechs.
2) Remittance will increase. Adwait said that, in 2020, there will be a substantial increase in remittance, whether it’s through crypto currency, money transfers, or other products (like Currencycloud!)
3) As everyone continues to tear down financial walls, global banking will increase, and people will need to send more money across borders. This trend started in the P2P space, but it’s now extending into the B2B payments segment.
To ensure that you never miss an episode of Payments Innovation, subscribe on Apple Podcasts, or Spotify, or here.
Until next time!