South African fintech startup truID, which has developed open banking technology to help financial service providers securely access consumer banking data, has raised an undisclosed funding round to help it expand its customer base and build out its product.
Founded by Dmitry Drabkin, Christian Schuit and Paris Valakelis, truID provides financial institutions and fintechs with secure access to consumer banking data.
Its Connect API provides consumers with a consent-driven process that allows them to share their bank statements, transaction history and other relevant information with third-party providers, who in turn can develop a range of value-adding services and products.
The startup currently works with South African financial services providers to digitise and optimise their internal processes, and has now raised an undisclosed amount of funding from fintech holding company Crossfin, which has made an investment into truID through its ventures investment arm Crossfin Ventures.
truID will use the funding to build out its data capabilities, leveraging Crossfin’s broad portfolio of fintech companies and extensive rails which offer multiple additional consumer touchpoints.
“South Africa sees 3.2 million credit applications per month, each one requiring three months’ bank statements and account verification. Our first objective is to expand our services to a greater audience of these affected applicants who often lose valuable time and money sourcing the required paperwork,” said Drabkin.
Crossfin’s portfolio companies currently process more than ZAR73 billion (US$4.4 billion) in point of sale transactions annually from over 172 million transactions across more than 11,000 retail stores and 21,000 clients in 13 African countries. Recent additions to that portfolio include My-iMali and Nobuntu, and Crossfin’s chief operating officer (COO) Anton Gaylard said the company had been impressed by the truID team and its vision.
“The company’s simple and secure API brings convenience to consumers while helping financial institutions retain customers through improved application processing. Their vision for enabling consumers to take control over their banking information creates immense opportunities for fintech innovation. There are also exciting synergies with some of our other portfolio companies which we hope to explore over the coming months,” he said.
Drabkin said open banking has immense potential for innovation in the banking, asset management, property, insurance and fintech sectors.
“By giving consumers control over their own banking data, we hope to spur a new wave of customer-centric innovation in the banking and financial services industry. Instead of providers developing products, we believe consumers are more interested in what third-party providers can develop using our API, resulting in products that meet their specific needs,” he said.
“We expect this to change banking in the same way that ‘app stores’ changed the mobile phone landscape, by creating a platform for wide-scale innovation that will transform banking.”
The benefits of truID’s service, he said, are three-fold.
“Consumers gain access to a host of new products and services built to meet their personal needs; banks enhance their services by bringing in trusted third-party providers that use consumer data for product development and innovation; and there’s a knock-on benefit to the broader economy through the elimination of a number of forms of fraud, including bank statement fraud,” said Drabkin.