Cyber Watch List: PassFort Cranking Up the FinTech Compliance Engine?

PassFort, a startup in the KYC/AML and onboarding workflow market, is added to our Cyber Watch List as an emerging player in the Digital Trust and Security market.

Undertaking digital transformation means moving beyond just looking at the technology to adopting a broader design thinking approach that emphasizes the rethinking of processes and business strategy. In the financial sector, digital transformation has all too often begun by thinking about the new technologies alone. But this doesn’t have to be the case. Today, we are seeing the technologies of digital transformation vendors applied to innovate new processes that are fundamentally more secure and add an element of trust to the entire industry. PassFort is one such process+technology vendor, applying technology and design thinking to create new processes that add an element of trust to KYC (know your customer) and AML (anti-money laundering) efforts.

Background

PassFort, founded in 2015, is a UK-based entrant into the fintech sector led by CEO Donald Gillies (formerly of equity crowdfunder Fireflock). PassFort has secured an initial equity investment (Nov 2015) and launched an initial (revenue generating) product portfolio targeting data capture and verification, secure cloud storage, and sharing, and compliance workflow management (dashboards).

Why PassFort?

PassFort’s initial product addresses the financial mid-market, including money managers and funds, providing the necessary tools to help manage onboarding, workflow, and compliance with KYC and AML regulations. But the real PassFort value is in the engine and the rethinking of risk and compliance management efforts.

Like many startups in the fintech sector, PassFort began with a Blockchain focus but realized that the pain point it was targeting was better serviced by a slightly different, streamlined, approach. In the process, PassFort developed an engine that would apply to broader potential markets, such as procurement, supply chain, smart contracts, and contract management. It did this while maintaining a core focus on the process side of the market (to improve the repetitive information/workflow processes that are time and data intense).

Part of the engine includes a cryptographic hash system that allows a passport, for example, to be verified by one entity and have that “verification” (and all of its elements, such as when, where, by who, etc.) sharable throughout a partner ecosystem. If a person’s passport is held by one financial institution, but needs to be verified by another, rather than send the passport to be re-validated, the hash is used to transfer the “validation” information, thereby keeping the actual details (and document) secure. By using this meta-data approach, the number of times a document needs to be (re)verified is significantly reduced. This directly translates into efficiency through an approach that we believe has solid potential in any semi-closed ecosystem where the validation of information is more important than the actual transfer of information. 

Creating an environment of security goes well beyond encryption and firewalls, PassFort touches on enterprise behavior and how we approach the idea of ecosystem-wide trust.

What To Watch

By targeting the mid market of the financial sector and learning what technology and process improvements work most effectively to solve real-world operational issues, PassFort is building a base for the future. Its current KYC/AML workflow products are gaining exposure and visibility to help achieve the larger goal of building a process engine that can analyze a range of enterprise processes to identify information overlap and then enabling the pooling and sharing of data with a new level of efficiency and trust.  While it remains very much an “early emerging” player (that needs to forge some strong partnerships to gain serious market traction), the approach of working with customers in a collaborative developmental manner should be appealing to executives looking to help move their operations forward in improved risk and operational efforts.