Fintech Plaid adds identity verification to Canadian service

A US-based data aggregator that allows consumers to connect their accounts with a number of financial institutions through one app has now added its identity verification service for Canadian organizations.

Last week, Plaid Financial began offering its Identity Verification and Monitor, a global verification and know-your-customer (KYC) solution, to help digital financial apps and services in Canada comply with their obligations under the federal Center for Financial Transactions and Reports (FINTRAC). ).

This adds to the account connection service San Francisco-based Plaid began offering Canadian firms when it opened here in 2018.

Support is offered in both English and French.

Plaid says WealthSimple and Shopify are among its Canadian customers.

According to American Banker, in 2022 Plaid and Royal Bank reached an agreement on data access. It ended Plaid’s practice of scraping RBC data. This came after Plaid settled a class action lawsuit in which consumers alleged the company used questionable tactics to collect bank account data to share with fintech customers. Plaid agreed to establish a $58 million settlement fund and make changes to its business practices and policies. According to American Banker, it was alleged that Plaid used consumers’ banking credentials to harvest and sell detailed financial data without users’ consent.

In an interview, Plaid’s head of identity, Alain Meier, said that their business partners here had to use individual ways to connect to various public and credit rating databases to verify users’ identities and reduce fraud during onboarding.

Through Plaid’s identity verification service, with one integration, companies can verify the identity of users from more than 200 countries, he said.

“We really differentiate (from the competition) on the underlying performance of each of these checks. We’ve run these verifications on a lot of people in the US and elsewhere in the world. So we’ve taken the same technology that works — all the machine learning, the underlying AI – and bringing it to the Canadian market.”

Confirmation checks can cost an affiliate around $1 to $2, depending on the volume.

Plaid’s anti-fraud engine is built into the identity verification process. It detects how a user enters personal information and the order in which they enter their data, as well as document and biometric verification to keep fraudsters out during onboarding. It also detects email, phone and device indicators to catch risky behavior consistent with bad actors, scams and bots.

For integration, Plaid has a software development kit that makes it easy for customers to integrate identity verification into their customer onboarding flow. For existing Plaid customers, it’s a code-free administration experience, allowing support teams to initiate different verification flows, update success criteria and review cases, all in one administration dashboard.