The rapid digitisation seen across the world has enabled technology companies to prosper, as the rising levels of digital fraud meant companies, across all industries, have needed new tech to fight the growing problem. Whilst some have believed they can set up the processes to identify and prevent fraudulent activity themselves, Ondato has suggested that the severity of failing to do so means companies should look to outsource these tasks.
Liudas Kanapienis is a co-founder and CEO of Ondato, a tech company that streamlines KYC and AML-related processes. The company has been growing for the past seven years and is eager to be at the forefront of the quickly changing landscape of the KYC industry.
Kanapienis has more than 15 years of experience and knowledge in digital banking, fintech, AML/KYC, and law. He played a significant role in shaping Lithuania’s fintech ecosystem having held leading positions at PaySera, one of the country’s early fintech pioneers, and now is one of the most active personalities in the country’s fintech world.
In this In Profile feature, Kanapienis reveals the importance of having experts deal with complex KYC and AML processes in order to prevent bad actors from infiltrating a company:
Tell me more about your company
Ondato is a tech company that streamlines KYC and AML-related processes. Ondato provides technological solutions such as digital identity verification, business customer onboarding, data validation, authentication, and more. These provide the highest standard available of online- or offline-KYC on-boarding for all business and customer types, orchestrated from a single interface. Ondato is turning compliance into a business benefit for its customers, helping to create a better and safer environment for organisations and individuals.
Ondato uses state-of-the-art machine learning that analyses received information. Within milliseconds, data is cross-checked with local and international registries – whether for new account registration or existing customer verification.
What was your inspiration behind setting up the company?
I realised I could combine my knowledge in payments and retail to create tools that would benefit the KYC and verification industries. That’s how we started Ondato. Most ideas and creative solutions are born when facing a particular problem, and that’s what happened to me with Ondato. We saw the need to streamline KYC and AML processes because we experienced how supervisory requirements were getting more and more complicated. It was really difficult to follow everything and mistakes were happening. That’s when we understood the need to onboard clients quickly and efficiently will be an ever-growing pain point for financial institutions. Because we had the right experience and know-how, we decided to create a suite that would offer solutions for financial institutions and any other business that needs to verify the identities of its customers. In 2018, we started developing unique and resilient solutions that helped our customers focus on their businesses, while Ondato took complete care of all the KYC and verification processes. This became our central idea and we have been developing and expanding it ever since.
What problem are you trying to solve?
As digital technologies and new applications are developed, so too do the risks facing the fintech industry increase, and significantly so! It is a ‘must’ to have robust processes securing financial institutions from people who have bad intentions. In today’s world, it is almost impossible to recognise possible fraud attacks without the use of advanced tools – tools that use, in particular, biometric and computer vision technologies. What we are seeing is that different spoof attacks, for example tampered document attempts, are becoming an every-day issue. This means that if a company isn’t using the right tools in security, then that company will likely not even be aware that an attack has occurred.
Are there any recent successes you’d like to highlight?
For us, the main challenges were always time and speed. Our product quite rapidly found its niche in the market. Once we were on the map, the demand skyrocketed, which also meant that we had to balance out the quality of new features and their timely delivery to ensure that our clients’ experience was and is smooth. We overcame these issues thanks to unique working procedures that we adapted within the company. Thanks to them, we expanded to new markets, still keeping the startup nature and releasing over 50 features and ten new products a year.
We are also proud to launch Ondato OS, which represents a leap to a new category in the KYC industry. Finally, everything that is needed by verification officers has been brought under one interface. Ondato OS is highly customisable and risk-flexible, meaning that our clients can tailor Ondato to suit the risk levels of their customers in a dynamic way.
What is the importance of smooth and compliant onboarding processes?
Onboarding is essentially how you greet your customer, so its importance cannot be overstated. At this stage, a lengthy process and various complications can annoy the customer to the point where they might turn to a competitor. However, its simplicity isn’t the only important factor – it has to be compliant with the jurisdiction’s laws in which you’re operating.
The risks associated with identity verification are very real in these industries. It is crucial for both our clients and their customers that onboarding and the associated verification processes are visibly secure and compliant with all local and international laws. It’s also super important that these processes remain in the background, allowing our clients to focus on perfecting the services that they know best.
Why should companies use a professional compliance service?
Unless your company is specifically knowledgeable about verification and identity fraud issues, it should definitely be outsourcing these tasks. KYC and AML are as serious as they are complex. Any money you spend here towards paying someone else to do it will be money earned by focusing on your core competencies. Outsourcing compliance will give you streamlined and coordinated insights into your KYC processes, it will likely give you a higher level of compliance than what your company could achieve alone, and those compliance processes will be updated in real time to mirror the rapidly changing legal landscape for these issues. It’s worth it to outsource here!
Are there any challenges involved with digital identity verification?
The challenges associated with digital identity verification are twofold. On the one hand, the regulations vary widely according to jurisdiction, and if you’re a financial institution thinking about the global market, you have to be adjusted to all of them. This can put huge pressure on a business trying to stay compliant. On the other hand, the processes have to work flawlessly, or else they risk being exploited by fraudsters. The nefarious actors here aren’t resting, and they are quick to adapt various techniques to keep up with advancing security measures. So the two biggest challenges are making sure that compliance is thorough and that it is robust.
What are your plans for the future?
One of our future plans is to explore and strengthen the risk-flexibility of our platform. This means that depending on your client, you need to gather a different scope of information depending on a number of different risk factors. For example, the data you gather for the economy-sharing service will be different from the data you have to gather for a bank, as a bank will require a deeper level of insight.
With Ondato OS, we can offer better flexibility for the customers (they provide only the necessary data meaning that they spend less time with arbitrary forms). It’s also easier for businesses as they can manage customer data from client cards and adapt their approach to better suit their business case. In essence, it’s a smarter way to approach KYC procedures that guarantees safety and flexibility.
What is the future of compliance?
The future of compliance is a risk-based approach focused on compliance management that is flexible with the client types and allows better orchestration of various compliance tools.