Crowdz case study

Crowdz

Crowdz chose NorthRow to deliver automated KYC and KYB checks, ensuring a more proactive approach to customer onboarding and validation.

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“Among all KYB/KYC providers, NorthRow alone offered a quantitative rating system that required mere seconds of processing time in order to determine whether an invoice-selling applicant company was likely to be legitimate, or whether there were troubling signs that would warn us against welcoming them into our program.”

Kevin Hopkins

Chief Strategy Officer

Background

Located in Campbell, California, Crowdz is a FinTech company with a mission to help small and medium businesses to improve their cash flow. An internet-based company, Crowdz provides a platform for funders to purchase invoices from small businesses at a discounted rate so that growing businesses can get access to cash from their invoices much sooner than the invoice’s due date. As a result, this frees up much-needed funds and allows businesses to drive growth.

Crowdz has been in operation since 2014, and has been providing access to affordable capital since 2019. In August 2022, the firm hit the remarkable milestone of funding $75m of receivables through the platform.

Crowdz website

Key benefits

Helping Crowdz to onboard new customers in the simplest, safest and fastest way.

Automated KYC and KYB

Delivering automated onboarding in a consistent, simple way for customers.

Unrivalled data sources

Providing access to accurate, global data sources for robust AML and fraud checks.

Clear rating system

Track, monitor and mitigate any risks at a glance with a simple traffic light system.

The Challenge

Delivering consistent, automated KYC and KYB checks

Invoice financing is a prime hotspot for bad actors looking to launder money, commit fraud and other forms of financial crime. As such, verifying and validating the integrity of the small businesses selling their invoices is a critical task for Crowdz to prevent fraud from taking place within their platform.

Kevin Hopkins, Chief Strategy Officer at Crowdz, explains more: “The process of verifying businesses selling invoices typically requires a review of public records to determine whether these companies have committed financial fraud in the past, whether they are listed on any fraud-related registers, whether they have experienced any adverse media, and so on.”

While the team at Crowdz was aware of a number of services providing Know Your Business (KYB) and Know Your Customer (KYC) information, they often found this process labour-intensive and costly.

“With most services, this often voluminous information must be reviewed manually, a process that can require anywhere from 30 minutes to a few hours per business.

“When banks and other traditional financial institutions are providing loans or other financial services for which the return can be into the hundreds or thousands of dollars (or more) over the life of this long-term financing, the significant expense involved in this due diligence is well-justified.

“But with relatively short-term, comparatively low-monetary-value invoices, the expense involved would be many times greater than any profit earned, making the invoice-purchasing scenario a financial and economic non-starter.”

WHY NORTHROW?

A partner to facilitate comprehensive due diligence processes

Facing this financial dilemma, Crowdz looked for a partner to support the delivery of automated KYB and KYC checks with a consistent approach for their customers, while reinforcing the firm’s business proposition.

Kevin recalls the lightbulb moment when Crowdz first encountered NorthRow: “We found the solution to this seemingly impossible business problem and, in one stroke, it was possible to deliver to our funders the automated, cost-saving due diligence process that they needed.

THE BENEFITS

Speeding up validation times for smoother onboarding

Since implementing NorthRow into their onboarding process, Crowdz has seen an impressive reduction in the time it takes to validate businesses before accessing their invoice financing services, as well as allowing for a more proactive approach to spotting potential bad actors: “Although the overwhelming number of companies seeking to participate in our programs have been legitimate, there have been a small number that were fraudulent - some transparently so, but many whose ill intent would not have been easy even for a manual investigation to discern.

“In all of our experience, every fraudulent applicant that we have been able to confirm after the fact was proactively flagged by NorthRow.”

Kevin has also praised the accuracy of data sources and information available within NorthRow’s platform: “Not only is the NorthRow solution able to support our automation needs, but their information has been spectacularly accurate. We have used NorthRow to vet tens of thousands of businesses and individuals - something that would have been impossible otherwise, even with a budget 10 to 20 times as great.

“I would add that NorthRow's support and customer service have been magnificent, they have always answered our questions promptly and gone out of their way to meet our needs - often in creative and in ways that surely must have required a great deal of time on NorthRow's part.”

What Now?

Further embedding NorthRow's suite of software to ensure future success

As for the future of Crowdz’s partnership with NorthRow, the company has already expanded their usage of NorthRow’s suite of software to include our RemoteVerify identity and verification tool, and automated daily monitoring.

The team at Crowdz has also recently transitioned to WorkStation, our all-in-one compliance management solution. WorkStation allows Crowdz to provide a smoother and faster approach to customer due diligence, while ensuring oversight of all of their compliance cases.

“We are continuing to expand the range of NorthRow's services that we take advantage of. Since our initial engagement, we have begun using their liveness-check service (to ensure that applicants are real people and are who they say they are) and their daily monitoring service. And, most recently, we have transitioned to their more comprehensive WorkStation product.”

Having used NorthRow for just over three years, the future is certainly looking positive for Crowdz. Kevin concludes: “NorthRow is an exceptional company that, we have found, always delivers what they promise - and beyond!”

“In all of our experience, every fraudulent applicant that we have been able to confirm after the fact was proactively flagged by NorthRow. NorthRow is an exceptional company that, we have found, always delivers what they promise - and beyond.”

Kevin Hopkins