Enigma Debuts KYB Platform as Banks Face More Scrutiny

Data science company Enigma has debuted its know your business (KYB) platform.

The new product, announced Tuesday (Oct. 3), is designed to allow users to conduct KYB checks to onboard new business customers with minimal friction.

“Our customers’ top KYB priorities are meeting compliance and regulatory requirements, swiftly onboarding more customers, and overcoming the growing pressure to increase margins and find savings,” Enigma Vice President of Product Charles Zhu said in a news release.

“With our advanced business matching and enrichment of registration filings, Enigma instantly verifies 1.5 times more businesses for KYB compliance than any other data provider and enables customers to create magical onboarding experiences.”

According to the release, the platform lets customers certify if a business has valid Secretary of State filings and uncover detailed information from registration filings.

In addition, it also makes sure businesses and their owners and stakeholders aren’t named on global sanctions and financial crime watchlists, and looks for whether businesses perform any risky activities.

“We focused on tying together both the way businesses present themselves to the government and the way businesses present themselves in the real world,” Enigma Chief Operating Officer Scott Steinberg said in the release. “We can generate verifications from all combinations of legal names, DBA names, corporate headquarters, and operating locations.”

Enigma, based in New York, has been a frequent collaborator with PYMNTS intelligence on a variety of topics.

PYMNTS spoke with Zhu in August about KYB mandates. Though onerous, he said the benefits of harnessing data from the process goes beyond satisfying compliance mandates, helping financial institutions serve their small enterprise clients more effectively.

Banks, said Zhu, can use KYB compliance data collected about both small and medium-sized businesses (SMBs) and enterprise clients during onboarding to tailor new offerings to those same clients.

The data can improve loan underwriting and provide “better intelligence on sales and marketing,” he added. “One of the biggest challenges FIs face is being able to ‘auto approve’ the right businesses. And so having this broader, better data about SMBs really helps instantly verify and approve more businesses.”

And as noted here last month, the increased scrutiny of regional lenders following this year’s banking crisis could push them toward FinTech partnerships to improve their compliance and know-your-business efforts.

“This is a really rapid pace of regulation,” Zhu said. The amount of money already going toward compliance is considerable, as Zhu estimated that many lenders are spending as much as 5% of revenues to deal with compliance matters.

Historically, he said, many financial institutions have tried to conduct all of their KYB and KYC activities in-house, though a partnership approach can offload some of the heavy lifting involved.