Banking on Security with Neo Financial and Berbix
When a trio of Canadian startup specialists began eying the nation’s banking system, they observed the tired old habits customers are forced to repeat nearly every time they make a financial transaction. Personal banking remains one of the most inconvenient service systems people deal with.
“The banking industry has so far lagged behind other industries in developing consumer-friendly, easy-to-use technological innovations to its customers," says Andrew Chau , one of the startup’s three founders. “There’s a massive opportunity to create a true challenger in this space, and a meaningful player when it comes to consumer technology in banking.”
In a digital era during which more and more people are willing to swap dollars for convenience, the rigors banks continue to force upon their customers stand out like a bounced check.
Financial institutions that have sought to free their customers from the need to present themselves in person at a bank branch have faced a huge hurdle: security. Making sure customers are who they say they are remains a major issue for banks. Being able to see a person’s face and their personal ID card—a driver’s license, usually—at the same time have long been the method for confirming customer identity. The industry’s concerns over security are, in large measure, responsible for making people continue to stand in line at bank branches or queue up at ATMs.
In answer to what many customers see as an outdated system, Chau and partners decided to create Neo Financial, a financial technology company that set up shop last year. Its goal is to take a digital-first approach to banking and to become the Amazon or Uber of the banking business.
Neo Financial wants to make personal banking as easy as ordering a delivery pizza online. Over the long term, the company also wants to take on Canada’s “Big 5”—the megabanks that maintain 90 percent of the nation’s $400-billion (in U.S. dollars) banking industry—and their passe ways of doing business.
With the help of investors like Peter Thiel’s Valar Ventures, Neo Financial has grown Canada-wide. Its original handful of employees has grown to more than 300, building a fully digital end-to-end banking experience.
One of the secrets to Neo Financial’s growth? The Berbix verification system. By offering a way for banks to know whether someone seeking online access to accounts is truly a customer, Berbix delivers a digital solution to protect against fraud and theft.
In order for a Neo Financial savings account or credit card digital application to be approved, prospective customers must use a device, usually a mobile phone, to take a self-portrait. They must also upload a photo of their province’s identification card. By using machine learning to perform facial-recognition, the Berbix system compares the ID and the selfie to verify the customer’s identity—instantly. This process is similar to a bank verifying customer IDs at their branch locations. Given that Neo Financial operates a digital-first format, it is vital that the company offer the ability to complete this check online.
Founded in 2018 by two leaders of the Trust and Safety team at Airbnb, Berbix has since become a strong partner for many forward-looking digital companies that require extra security measures to operate.
“We’ve been using Berbix since Day One. When a customer wants to apply online for a credit or savings product, they have to go through Berbix. It makes us much more confident that we’re dealing with a genuine customer.” Eric Holle, Growth Product Manager
By running a Berbix verification check on each prospective customer, Neo Financial stays in compliance with Canadian know-your-customer regulations and makes sure that each customer is of legal age. By matching a face with a photo ID, “We can mimic that in-person branch experience and make sure people are who they say they are,” he adds.
In return, customers get the convenience of banking from home or anywhere else.
Beyond maintaining a high level of security, Neo Financial aims to make its selfie processing and overall experience as convenient as it can be. Berbix helps there too, by linking customers to their accounts in an instant.
“We want to make sure we are reducing fraud, while also making the experience of our user base as frictionless as possible."
Having Berbix support the front-of-the-flow security has given Neo Financial the ability to grow across Canada. And as Neo Financial has grown from its base in Alberta to all 13 Canadian provinces and territories, Berbix has helped the company create verification systems for each region’s ID card.
“They are great to work with,” Holle says. "Berbix has been instrumental in supporting our growth across Canada", he adds. And whenever the company has needed to adjust its flow process into new regions, Berbix has been instantly on-call to make improvements in its platform.
“We need them to work with us to maintain the absolute highest level at which we’re handling risk, and Berbix gets all that.”