ID-Pal, a Dublin-founded fintech, has launched across the UK to help brokers - among other financial services professionals - combat fraud.
The firm promises to help advisers verify their clients’ proof of identity and address “in a matter of seconds”.
The company’s launch comes just months after brokers reported rising levels of mortgage fraud over the past year.
They said fraudsters have become more sophisticated, and as a result the risk more brokers could be struck off without even realising they’ve taken part in fraudulent activity has also increased.
“The way in which identity verification has been done historically is just not sustainable in our digital-first mobile-ready world,” said ID-Pal’s founder and chief executive, Colum Lyons.
“Verifying identity documents manually is inefficient and insecure, and the risk of data flight and simple human error can make businesses vulnerable to fraud.”
ID-Pal uses artificial intelligence and machine-learning to classify a document, avoiding manual intervention on the adviser’s part all together.
“The technology can integrate with existing workflows and, if needed, an adviser’s customer relationship management system, to streamline all anti-money laundering and Know Your Customer processes into one secure business portal,” Lyons told FTAdviser.
One of ID-Pal’s current clients is mortgage advice firm UK Adviser, but the firm said all advice firms could use its technology - not just mortgage-focused ones.
The technology is available “off-the-shelf” or as an application programme interface. It is both GDPR compliant and ISO 27001 certified, covering 6,000 identification documents across 200 countries and jurisdictions.
Its checks use a mixture of biometrics, facial matching, liveness testing, address verification and document checks.
As reported by FTAdviser at the time, in January, brokers said there was a perceived “imbalance” of power between them and the lenders they work with.
They argued a reason for this was the uneven technology landscape, which meant brokers have far less tools at their disposal to protect them against fraud.
“Lenders’ systems are so highly developed. They’re process and AI-driven. The issue is that all these reports and this data is hidden, so advisers could be submitting dodgy business and not know,” mortgage broker Lewis Shaw told FTAdviser.
“Lenders forget they’re plugged into HMRC, whilst brokers have to take documents at face value because they can’t tell the difference.”
Around 75 of the UK's estimated 18,000 mortgage brokers are struck off because of fraud each year, according to the chief executive of the Association of Mortgage Intermediaries, Robert Sinclair.
Occasionally, Sinclair sits in on disputes between brokers and lenders. He said the vast majority of cases were about a broker missing something fundamental, and that in some cases they admit they accepted a photocopy and never met the client.
“You throw your hands up in the air and say 'you expect me to defend you?'"
Alongside its new presence in the UK, ID-Pal also operates in Ireland, the US, and wider Europe.