How to really know a business?
Credit scores can be misleading, especially for a Small business that has withstood the pandemic. An income statement shows the cold numbers but does not tell the whole story of the dynamics that one business may have found on the way to the present moment. Add to this the fact that financial institutions are unable to verify approximately 30% of people applying for accounts and services.
Brands CEO Hany family said in an age where “know your customer” and “Know your business“Initiatives are critical, but financial institutions and other businesses don’t know how to accurately identify risks and imposters that can leave them exposed to fines (for violating sanctions lists) or vulnerable to schemes.
“This is all due to a lack of holistic, comprehensive, actionable knowledge,” Fam told PYMNTS’ Karen Webster.
In the past, a banker would visit physical branches. Today, everyone has a digital footprint. Despite the transition from traditional information to newer signals (e.g., social media, open banking integrations, and consent-based access to detailed financial information), it is still difficult to identify companies and their owners, he said.
Too often, a financial institution may look at the profile of an applicant’s majority owner and base its decision on the majority owner’s credit rating, in effect mirroring the process of what happens when a person applies for a credit card.
With the top 30 percent of those applicants identified and screened, Fam said, that means hundreds of millions of dollars in potential revenue.
As Fam pointed out, it’s not easy to get all that data (beyond the typical profit and loss statements) into one place and put in place a comprehensive decision-making process that is fully informed by what a company is, what it does, the deep relationships behind the scenes, and what its own This is what financial supply chains look like.
The knock-on effects hit smaller businesses, Fam said, adding that companies are unable to access essential services, from credit and cash flow to insurance. The supplier who wants to sign a deal with a large retailer may Not be able do so because the retailer is unable to verify them or it is too expensive to verify them.
The key ingredient missing in the digital age is trust, he said. Companies are taking ownership and responsibility for their data and how the world views it. These data.
Types of information
To get that data, you need an ecosystem and partnerships. with the purpose of create a 360-degree view of a business, Fam said.
To consolidate that trust, There are several disparate pieces of information that are collected, synthesized and offered through platforms such as Markaaz, including a wide range of 200 public data and even “elements” of non-public (read financial) data, he said.
Among those various types of data are company health information tied to sales trends, while compliance information and reputation details encompass sanctions lists and even social media reviews. More recently, diversity information has become valuable to companies looking to work with different types of companies tied to gender or ethnic designations.
“We don’t interfere in the relationship between the banker and the client, or between two parties,” Fam said, as the onboarding process accelerates. “But we immortalize those relationships and support trust with the best quality of information and the highest level of security in how that information is shared between the parties.”
For financial institutions and FinTechs, the ability to “converge” all obligations and requirements around compliance and oversight is nothing short of a game-changer, he said.
The educational aspect
According to Fam, as Markaaz works with client companies and financial institutions, the companies gain insights into how their data is being used and can correct any “bad” data that is available (much in the same way a person can correct their credit report). The platform model also allows companies to conduct due diligence on other companies (and even consumers) with whom they might want to do business.
At the bottom of the stool is a trust-based model as open banking takes shape in the United States and artificial intelligence makes it easier than ever to automate data collection, Fam said.
“Have access to all your information by having [public] “And even non-public information allows you to shop around for the best deals, rates and highest approval levels,” he told Webster.
Looking ahead, he said, We’ll go to There is a “drastic streamlining” of how companies identify the companies they will work with, and how they verify and onboard them. Data cleansing will allow for real-time analysis and monitoring.
“These are credible facts,” he told Webster, “and I have all the pieces I want.” with the purpose of “Having a dynamic relationship instead of a static one.”
