Fractal, German-Singaporean identification management company, announces that it has signed a strategic partnership agreement with Seedbox, the Philippine-based online investment platform with a mission to drive financial inclusion across Southeast Asia.

The partnership with Seedbox will make it easier for Filipinos to retain and invest their savings into mutual funds via Seedbox’s online platform. Using Fractal’s Fractal ID solution, customers can have access to bank-grade compliant ‘Know Your Customer’ (KYC) and Anti-Money Laundering (AML) capabilities in Seedbox’s operations.

The agreement will see that over 40,000 Filipinos have access to Seedbox every month, enabling them to invest in mutual funds and other investment products without having to own a bank account.

Fractal is known as one of the startups supported by German Accelerator Southeast Asia (GASEA), a partnership between Enterprise Singapore and the German government. Fractal offers banking-grade compliant ID technology solutions to promote an open transnational financial ecosystem.

Seedbox claims to be among the top ten largest online investment platform for Filipinos. Its backers include ATR Asset Management and the Indivara Group of Indonesia. Seedbox is an online investing service that enables users to invest in mutual funds at their convenience, with Manny Nepomuceno as the Chief Architect of the company.

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According to the 2017 Financial Inclusion Survey by Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, 77 per cent of Filipino adults do not have bank accounts with 45 per cent (as reported in the World Bank’s Global Findex Database in 2017) citing documentation requirements as a major barrier towards opening a bank account.

Julian Leitloff, CEO and founder of Fractal, saw the lack of AML/KYC control as a major barrier preventing healthier financial ecosystems. He proceeded to establish Fractal to promote a more open and decentralised financial ecosystem through Fractal’s non-bank financial institution (NBFI) partners.

“Digital technologies are driving opportunities for much greater financial inclusion. By providing technology solutions to non-bank financial institutions, our ambition is to expedite the transition to a more open and interoperable financial ecosystem,” Leitloff said.

KYC and AML processes are critical components of financial institutions and other regulated entities that are required to verify identities, provide due diligence, and comply with legal requirements. However, per LexisNexis 2019 estimates, the annual true cost of compliance across Asia is around US$6.09 billion, with the cost of AML compliance in the region has also risen by 9-10 per cent over the last 24 months.

Fractal ID seeks to enable trusted relationships between people and organisations across borders and languages based on reliable and verifiable information. Fractal’s self-serve software-as-a-service (SaaS)’s automated verification journey is composed of four components: ID document verification, liveness detection, facial comparison, and Politically Exposed Persons/Sanction List filtering – including human intervention if one part of the automated process fails.

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Fractal was one of the few startups supported by German Accelerator Southeast Asia (GASEA), a partnership between Enterprise Singapore and the German government to facilitate German start-ups’ set up in Singapore in 2018. The startups were selected based on the region’s industry needs.

Since 2017, Fractal has received US$3 million in venture funding with participation from Coparion, a VC fund backed by the German government.

Fractal will provide the industry’s first free tier for KYC/AML solutions from November 1, 2019.
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Photo by siriwan arunsiriwattana on Unsplash

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