Ballerine Introduces Open Source To Banks’ Identity And Risk Assessment Processes

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This will allow finance companies to know their customers better.

With $5 million in venture funding, a brand-new firm is emerging from stealth today with the aim of bringing its brand of open source to risk decision-making software in the financial industry.

The startup, Ballerine, assists banks, fintechs, and other similar financial organisations automate crucial decisions related to their KYC (know your customer) and KYB (know your business) obligations, including confirming the identity and risk factors involved in doing business with a specific person or company. The platform incorporates multiple tools to support customer onboarding, underwriting, and transaction monitoring and ingests data from websites, social networks, company registers (including the SEC), sanctions credit agencies, and PEP databases, among other global sources.

For instance, an online bank will undoubtedly want to onboard new business customers with the least amount of hassle, but it must balance this “need for speed” with its obligations to follow applicable laws, making sure that it is not hiring a company that may be prone to fraudulent operations. A business customer will typically be required to supply information while attempting to open an account, such as addresses, legal names, registration numbers, and so on. The bank can then link Ballerine’s API to its internal systems, after which Ballerine will use the bank’s customer data to check its operations across all of its own databases.

Underwriting, where a company is applying to a bank for a loan, could be another use-case. Ballerine examines the company’s financial information, including its credit history, to determine what dangers there may be in lending it money. Based on the associated risk factors, Ballerine can assist the bank in deciding the loan’s terms. Even after a company has been accepted or received a loan, this monitoring continues because the risk environment may change over time.

Ballerine, a 2022 startup, raised a modest venture round last year as a result of its involvement in Y Combinator’s (YC) summer programme. It was announced today that Israel’s Team8 would lead a $5 million seed investment in the company, with support from YC, Vera Equity, and other angel investors.

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