Fintech Compliance Regulations: Stay on Top of Fraud and Risk with Treasury Prime Partners

From KYC and KYB to transaction monitoring - our fintech compliance pre-integrations with third-party providers carry out compliance smoothly
Headshot of Deirdre McClure
Deirdre McClure
Former Chief Customer Officer
December 14, 2022

Fintech compliance is a critical piece of the puzzle when embedding financial tools. Whether you’re a fintech startup or enterprise company, you must strike a delicate balance between guarding against bad actors and making your product easy to use and inviting for end users. Customization is key — what works for one app won’t work for the next.

Yet many banking as a service (BaaS) providers offer to take on all compliance tasks for you, which seems easier at first, but puts your business at risk in the long run as regulations tighten around bank-fintech partnerships. As a result, your company could end up exposed to unnecessary risk

Treasury Prime takes a different approach. We help companies stand up their own fintech compliance program and integrate with highly-vetted, top-of-line vendors in the compliance space so that you can pick and choose your partners and your overall compliance approach through one API. Our expert partners help you tailor the right strategy for your specific needs. 

We perform rigorous due diligence before onboarding a vendor, so you can be sure that companies in our network pass muster with your partner bank and empower you to meet regulatory requirements. Because we’re integrated directly with these vendors, adding them to your roster is a smooth process. We also work with companies to integrate vendors from outside our network. 

Here are some of our top fintech compliance integrations and their benefits. This list is not exhaustive — we offer additional integrations not mentioned and always have more on the roadmap. Whatever your specific need, we work to make it happen. 

Find out why Tearsheet named Treasury Prime ‘Best Banking as a Service Platform’ for the second year in a row. 

KYC: Alloy, Middesk, more

A Customer Identification Program is a requirement for all financial institutions onboarding new accounts. Banks often require that fintechs have a customer identification program so that they can properly vet users onboarding to their application. You can vet these customers in two well-known ways:

  • “Know your customer” or KYC processes enable you to confirm a user’s identity and is a requirement for opening bank accounts. KYC is how you verify that a person or entity opening an account through your app is who they really say they are — and prevents you from exposing your business to someone who has been involved in money laundering or other fraud. Yet an overly restrictive or slow KYC process can cost you customers who get rejected for the wrong reasons, or get stuck in approval limbo. 
  • “Know your business” or KYB is a due diligence procedure to verify companies and ensure the legitimacy of a business that you’re going to work with. The KYB process is conducted on the person responsible for a business or the legal representative.

Strong & balanced KYC

Treasury Prime provides full visibility into and control over your KYC process. That means that when a customer requires manual review to open an account, your fintech has the power to review the situation and work directly with the customer to resolve concerns. You know your customers’ risk profile the best. This transparency allows you to run an effective program without burdening your end users with endless authentication tasks. 

Not all BaaS providers take this approach. With other platforms, “a fintech’s ability to onboard its end customer is entirely dependent on the BaaS provider’s compliance team, having the potential to lead to a bad customer experience as well as a fragmented regulatory review,” says Treasury Prime Associate General Counsel and Vice President of Compliance Sheetal Parikh.

Why Alloy & Middesk for fintech compliance

Treasury Prime works with KYC technology provider Alloy and its own network of integrations. Alloy brings automation and visibility to an otherwise manual and opaque world of data and complex processes. Through our Alloy integration, we also work with KYB platform Middesk, which automates business verification as part of commercial account opening. 

  • Alloy: Alloy is a fast-growing identity decisioning platform with more than 100 underlying data sources. Fintechs use Alloy's best-practice waterfalls for both commercial and consumer identity verification. As fintechs gain more expertise and insight, Alloy's waterfalls can be customized in a no-code, visual logic interface. 
  • Benefits: Visibility, control, modern interface, access to heaps of data
  • Middesk: Middesk provides business verification and risk assessment. The tool can be leveraged within our Alloy integration as part of Alloy’s best practices for commercial identity verification.
  • Benefits: Best-in-class commercial identity verification, integration with Alloy

Key Alloy data integrations & benefit

A key benefit of Alloy’s extensive list of data integrations is that you can implement alternative and cutting-edge methods to confirm identity, such as a user’s IP address. Alloy also offers access to a wide range of data, enabling redundancy that ensures greater accuracy of insights. 

  • LexisNexis: Most professionals who work with public records and identity data will be familiar with this major database and data analytics corporation. As an identity vendor, data from LexisNexis is used for consumer identity verification. 
  • ID Analytics: ID Analytics, which has been acquired by LexisNexis and folded into its suite of risk tools, takes a consortium-based approach to detecting fraud. ID Analytics uses traditional and alternative data within its large network of cross-industry consumer behavioral data to help better identify applicant fraud risk.
  • TruValidate: TruValidate provides device insights such as phone manufacturer, IP address, and software version that someone is using. This data can be used for fraud scoring. 
  • Ekata: Ekata uses data to determine when mobile numbers were allocated and verifies that a number actually belongs to the person a user is claiming to be.
  • Sentilink: This fraud analytics platform helps to detect potentially fraudulent identities through synthetic fraud scores, ID theft scores, and verifies social security numbers. 

Transaction monitoring: Unit 21

Transaction monitoring refers to monitoring transactions such as transfers, deposits, and withdrawals in order to identify suspicious activity. It’s a critical process for detecting fraud or money laundering. 

  • Unit 21: Treasury Prime partners with transaction monitoring software company Unit 21, which offers a no-code platform for risk and compliance operations. When integrated with Unit21, fintechs and their partner banks are able to work collaboratively to monitor suspicious behavior and resolve any outstanding issues. The bank as the regulated entity assumes the transaction monitoring responsibility but can allow the fintech to participate by delegating the adjudication of certain alerts and rules as appropriate. Fintechs can leverage pre-configured, custom rule sets and models to monitor suspicious activity as well as modify them to fit their exact use cases, and use their own custom rules and models whenever necessary. Unit 21 is a leading provider in the space, and counts Visa, Gusto, Chime, Coinbase, and Intuit among its customers. 
  • Benefits: Best-in-class offering with modern, no-code infrastructure

Compliance is just one area where Treasury Prime offers an extensive range of well-vetted and trusted partners. In part 2 of our series on our partners, we will cover our integrations with leading card vendors like Marqeta and Tag, bread-and-butter card networks like Visa and Mastercard, digital wallets, bill pay tools, other payment tools, statements software, and more.  Stay tuned.

To learn more about Treasury Prime’s partners and how we can offer customized solutions for your needs, contact our team.

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