Building the NextGen Digital Trust Protocol
We’ve all been through it. A painful process of document submission, attestations, delays, and even unfathomable rejections. Be it banks, wallets, trading platforms, asset transactions, getting a loan or just checking into a hotel, establishing your identity through a KYC (know-your-customer) process is a must everywhere. We all know KYC procedures are essential for businesses to follow the law, spot fraudsters and prevent crime. But can this be made easier? And cheaper, more accurate, more scalable at the same time?
The real issue is that of trust. How does one trust a KYC application? It breaks down into a series of steps: trusting the provider of the documents, the actual documents, matching the provider to the documents and trusting the identified person.
Physical processes which solve for these steps are non competitive and tough to scale. Physical processes also don’t allow for the volume, timelines, economics, or the distribution that is required by large enterprises who are on-boarding hundreds of customers every month across different locations in the country. Beyond India too the distribution costs including customer on-boarding were quite high and there seemed to be a need for a digital first product.
As tampering and frauds increase in our fast digitizing world, institutions and regulators will step up scrutiny. In India, between 2010 to 2013, the amount involved in frauds increased by 324%. KYC tampering, forgery, fund siphoning, and identity theft are among the top cases reported. Juniper research predicts annual spending on online fraud detection services across financial institutions and eCommerce alone will reach $9.2B by 2020.
The Team & Solution
When Ankit, Arpit, and Ankur approached Kstart in late 2016, they had worked out the problem to its core. The idea was to build a digital product which would solve for every step of the KYC. For example:
Trusting the provider of documents — live video feed
Matching the provider to the documents — face match algorithms
The actual documents — forgery detection algorithms
Trusting the identified person — algorithmic risk intelligence
All of this rolled up into an API that any enterprise could use to remotely on-board a customer and reduce the need for physical documentation and create a very cost efficient process. Moreover, the team believed that KYC was tip of the iceberg, and trust permeated most aspects of business — from identity, to contracts, documentation, and much more. Signzy’s vision was to start with on-boarding of customers for the BFSI sector and then move onto other trust-based use-cases, across verticals.
“Trust permeates most aspects of business — from identity to contracts and much more”
The team background, dynamic and clarity in thought made for a very compelling picture. A data scientist having worked in banking fraud (Ankit), a lawyer with experience in cyber-crime (Arpit), and a masters in cognitive science with a thesis in bio-metrics (Ankur) — it fit like a jigsaw.
All of this led to the team at Kstart backing this talented team on their vision to build a large digital trust protocol out of India.
Over the next 18 months, we witnessed the phenomenal execution prowess of the team. Their first client used the product for customer on-boarding where the business unit was able to reduce TAT by 55%, cut rejections from 9% to 2%, and increase sales productivity by as much as 3X. The cumulative impact: $1.5M for a small unit which gave the enterprise the confidence to take the product across additional business units.
In India, B2B businesses have had multiple challenges to scale. The first, is the ability to convince Indian enterprises to do paid trials for a digital product in core business processes. Even if the initial trials are a success, scaling the solution in the same organization or implementing it across departments has been tough. Very few enterprise product companies exist in India as businesses historically haven’t been comfortable working with fully variable cost structures. Signzy, has not only solved for paid trials but is now fully ingrained into the core customer on-boarding processes of 15+ enterprises in the BFSI space. As businesses gain more comfort on the solution, the company is deepening its engagement in order to completely replace all physical on-boarding and transaction related processes, and, is well and truly on its way to become the largest Regulatory Technology business out of India.
Along the way, the solution also started garnering sizable international interest with POCs with some of the largest global networks, being one of the 10 global startups accepted into the StartPath program by MasterCard, and being part of the newly launched APIX marketplace platform, the only start-up from the Indian ecosystem.
Over the years, we have heard a lot about the lack of great products coming out of India which can compete on a Global scale. We are proud to look back and feel confident that we have partnered with a truly cutting edge technology company from India that is making a dent on the global stage. Signzy’s proprietary Facial Recognition, Forensics, ID classification and OCR algorithms are now groundbreaking in terms of performance as compared to the best in the industry. As world transitions to Web 3.0, the team continues to build the new age trust protocol that uses Artificial Intelligence to bring human like fraud detection capabilities and uses Blockchain to secure document and consent, instead of signature and seals. All this with a few clicks of one’s mobile camera.
It has been rewarding to watch Signzy grow from an idea on paper to being able to name the largest institutions in India among its 50+ clients. The fact that Signzy’s commitment to product allows its clients business-as-usual despite the recent Aadhaar judgement further validates our faith in the team.
Given the great execution track record and the strong product-first thinking of the team, it was no surprise seeing strong interest in the market for their Series A fund-raise. Today, we welcome 2 fantastic investors, Stellaris Venture Partners and Kalaari Capital, who have led the Series A fund raise into the Company and are very excited about Signzy’s growth prospects in the future. We look forward to work with the team and our new partners on the next leg of the Company’s journey to build a global digital trust platform.
Acknowledging the contribution of Milind B, Fellow @ Kstart for assisting in articulating this journey and continued efforts to work with the Company