Plaid has acquired Cognito, an identity verification and compliance (KYC, AML) platform that makes it faster, easier and safer for people to verify their identity when signing up for financial services online.
Plaid said Cognito’s products are used by hundreds of digital finance companies today, including many Plaid customers such as Affirm, Brex, Current, Republic and Wyre.
Verifying someone’s identity is critical across almost all financial services, Plaid said, yet it remains a sticking point for many companies that stitch together different solutions to get the tools and data needed.
Plaid stressed that this patchwork approach often delivers poor user experiences that result in people abandoning the signup process because it takes too long or it is too difficult to provide the required documents and information.
The Cognito team has built a platform that combines all of the tools and data sources a company needs for automating identity verification, KYC and AML screening. When built into customer onboarding processes for digital finance apps, Plaid said Cognito provides a “great user experience that enables companies to successfully onboard more customers and reduce fraud.”
Plaid revealed in its 2021 annual report that nine in ten UK consumers say FinTech apps and services have helped them in some way, making it all the more important that users are able to access such services safely and seamlessly.
Half of the respondents reported feeling more in control of their finances since using FinTech, whilst 36% said it helped reduce fear and financial stress in their lives.
Plaid’s 2021 annual report also revealed that 56% of UK users said they have saved time as a result of FinTech apps and services; 42% saved money, whilst 35% report understanding their finances better.
The company entered into a strategic partnership with Q2 holdings to offer customers a secure way to connect accounts to apps and services. According to Q2 at the time of the announcement, the partnership would utilise its leading digital banking platform and Plaid’s Plaid Exchange – an open finance platform – to offer customers a secure, reliable means to connect bank accounts to apps and services and provide the tools needed to manage and monitor these connections.
Reed Bouchelle, Plaid’s strategic partnerships manager, said, “At Plaid, we believe all consumers should have access to digital financial services, regardless of where they bank.”
Commenting on the acquisition of Cognitio, Plaid said, “With Cognito, the next major step in our journey is to help developers build the best and most seamless onboarding experiences across all of these areas. This means simplifying every step of the consumer journey from their first interaction during signup, to the first magical moment delivered by that product – the first time sending money to a friend, or the first time trading a stock or cryptocurrency.”
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