Tech platform allows unbanked Pinoys to invest in mutual funds

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More Filipinos, especially those with no bank accounts, can now invest their savings into mutual funds more conveniently.

Fractal co-founder and managing director Nele Wollert

This development comes following an agreement inked by Singapore and Berlin-based identification management startup Fractal and local online investment platform Seedbox in October 2019.

Through the partnership, Seedbox, which allows users to invest in mutual funds at their convenience, will be equipped with bank-grade compliant Know Your Customer (KYC) and Anti-Money Laundering (AML) capabilities via the Fractal ID solution.

KYC and AML are crucial to identity verification, providing due diligence and compliance with legal requirements.

Specifically built for companies providing Finance 3.0 services to global users including blockchain-based fintech companies, the Fractal ID solution has an automated verification system made up of four components. These are ID document verification, liveness detection, facial comparison, and Politically Exposed Persons/Sanction List filtering. The latter includes human intervention in case a step in the process fails.

Fractal ID can onboard 40 percent more users than the market standard who could have otherwise quit the onboarding process due to confusing language and other time-consuming steps.

“By providing technology solutions to non-bank financial institutions, our ambition is to expedite the transition to a more open and interoperable financial ecosystem,” said Julian Leitloff, CEO and founder of Fractal. 

“We want to help both users and companies achieve fast and accurate global verifications wherever they are and have a hassle-free experience when it comes to AML/KYC related requirements.”

With these features, more Filipinos will benefit from Seedbox’s mutual funds and other investment products even if they don’t own a bank account. They also gain access to more digital financial services.

According to the 2017 Financial Inclusion Survey by the Bangko Sentral ng Pilipinas, 77 percent of Filipino adults are unbanked.

“At Seedbox, we want to provide all Filipinos with a seamless and secure investing experience. Fractal provides a convenient and faster means for our relationship managers to identify financial crime and reputation risk, saving time and money,” said Manny Nepomuceno, chief architect of Seedbox.

Fractal ID is even robust enough to withstand the continuous growth of technology where new devices continue to be developed, more people become connected, and cybercrimes get to be more sophisticated.

“Fractal ID is built exactly for those highly connected new users and will keep evolving, same as regulatory standards, to stay ahead of these threats,” said Nele Wollert, co-founder and managing director of Fractal.

“For example, we’ve added AI-powered sophisticated tools to provide facial matching to the submitted identification document and liveness detection. The add-ons provide a higher level of assurance than typically used selfie methods.”

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