A U.S.-based data aggregator that allows consumers to connect their accounts with a variety 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 finance apps and services in Canada comply with obligations under the federal Financial Transactions and Reports Analysis Centre (FINTRAC).
This adds to the account connectivity 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 the Royal Bank reached a data access agreement. It ended Plaid’s practice of data scraping RBC data. This came after Plaid settled a class-action lawsuit in which consumers alleged that the company used dubious tactics to gather bank account data to share with fintech clients. 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 login credentials to harvest and sell detailed financial data without the users’ consent.
In an interview, Plaid’s head of identity, Alain Meier, said its business partners here had to use individual ways of connecting to various government and credit rating databases to confirm users’ identities and reduce fraud during the onboarding of new customers.
Through Plaid’s identity verification service, with one integration companies can verify the identities of users from more than 200 countries, he said.
“We really differentiate (from competitors) on the underlying performance of each of these checks. We’ve run these verifications on many people in the U.S. and elsewhere in the world. So we’ve taken that same technology that works — all of the machine learning, the underlying AI — and are bringing it to the Canadian market.”
Verification checks can cost a partner about $1 to $2, depending on the volume.
Plaid’s anti-fraud engine is built into the identity verification process. It detects how a user types their personal information and the order in which they input 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, fraud rings, and bots.
For integration, Plaid has a software development kit that makes it easy for customers to integrate identity verification into their customer’s onboarding flow. For existing Plaid customers there’s a no-code management experience so support teams can launch different verification flows, update success criteria, and review cases, all in a management dashboard.