Santander Group Backs N.Y. Digital Identity Startup
Santander InnoVentures has invested in a fintech startup that uses consumers' digital footprint data, including social media, to confirm identity.
Santander InnoVentures, the $100 million fintech funding arm of the Spanish bank Santander, identifies promising young fintech startups and provides them with financial support and other resources.
New York-based Socure markets to financial institutions that then use its service to open new bank accounts or issue credit and debit cards. It also has applications for fraud prevention and compliance.
Most would agree the way digital identity is managed is suboptimal. But how identity should be managed, and who should manage it, are shaping up to be hotly debated questions.June 21
The U.K. bank's new business unit takes advantage of the massive amount of data it stores to offer a new array of products and services, including managing customers' digital identities.March 28
"Identity verification is a crucial step in any banking process and is an issue challenging many consumer-facing businesses," Mariano Belinky, managing partner at Santander InnoVentures, said in a news release Wednesday. "There's a huge opportunity for innovation in this space."
Particularly in emerging markets, potential bank customers are often excluded from the financial system because they don't have traditional credit records used to verify identity, Belinky said. In the U.S., 7.7% of households are unbanked and nearly 20% are underbanked, according to the latest figures from the Federal Deposit Insurance Corp.
"The Socure ID+ technology goes beyond conventional identity verification methods, opening new possibilities in untapped markets and segments," Belinky said. He added that the technology will help Santander better understand its customers and predict their needs.
The investment in Socure is the ninth for Santander InnoVentures since it was launched in 2014. The size of the investment was not disclosed.
"With this latest funding announcement, we're extremely excited to continue our work in tackling the issues associated with identity fraud, while continuing to improve access to the financial system for the unbanked and underbanked," Sunil Madhu, Socure's founder and chief executive, said in the release.