Crossfin invests in SA fintech truID

African fintech investor Crossfin has invested an undisclosed amount in SA fintech truID through its ventures investment arm, Crossfin Ventures.

TruID’s API provides financial institutions and fintechs with secure access to consumer banking data.

The startup was founded in 2015 by Paris Valakelis, who was joined in 2017 by Dmitry Drabkin and Christian Schuit.

According to the startup’s LinkedIn profile, Schuit is based in The Netherlands, while Drabkin and Valakelis are based in Johannesburg.

TruID aims to provide financial institutions and fintechs with secure access to consumer banking data

TruID aims to use the investment from Crossfin Ventures to further develop its data capabilities, leveraging the group’s broad portfolio of fintech companies.

Crossfin COO Anton Gaylard said in a statement today that truID’s API brings convenience to consumers while helping financial institutions retain customers through improved application processing.

“Their vision for enabling consumers to take control over their banking information creates immense opportunities for fintech innovation. There are also exciting synergies with some of our other portfolio companies which we hope to explore over the coming months,” he said.

Through a consent-driven process, in compliance with the Protection of Personal Information Act (POPI), consumers opt-in to truID. They can then securely share their bank statements, transaction history and other relevant information with third-party providers, who in turn can develop a range of value-adding services and products.

‘Open banking can spur innovation’

In the same statement, Drabkin noted that open banking has immense potential for innovation in the banking, asset management, property, insurance and fintech sectors.

“By giving consumers control over their own banking data, we hope to spur a new wave of customer-centric innovation in the banking and financial services industry.

“Instead of providers developing products, we believe consumers are more interested in what third-party providers can develop using our API, resulting in products that meet their specific needs.

“We expect this to change banking in the same way that ‘app stores’ changed the mobile phone landscape, by creating a platform for wide-scale innovation that will transform banking,” he said.

While open banking principles are not yet legislation in South Africa, the SA Reserve Bank has shown great interest, noted the startup.

Said Drabkin: “We believe consumers, credit providers and other financial institutions are ready to emulate some of our more developed peers.

“While regulators determine the best approach for South Africa, we wanted to start laying a practical foundation for an open banking culture in anticipation of what we see as the natural evolution of financial services,” he said.

Editor’s note (10 June 2020): Subsequent to the publication of this article, TruID co-founder Paris Valakelis contacted Ventureburn to explain more about how the business was founded.

Explained Valakelis: “To clarify, in 2015, I set out to start an online lending business, then in 2016 Chris and Dmitry joined me on this venture, but we had a major pivot in our business in 2017, this when we decided to develop the ‘Open Banking’ platform and the name truID was borne,” he said.

Featured image: truID via LinkedIn