Open banking giant Plaid has acquired identity verification and compliance platform Cognito in a $250 million deal.
Together the companies will continue building the products that power the identity verification and compliance processes across the fintech ecosystem.
Verifying someone’s identity is critical across almost all financial services, yet remains a major challenge for many companies that stitch together different solutions to get the tools and data needed. This patchwork approach often delivers poor user experiences that result in people abandoning the signup process because it takes too long or it is too difficult to provide the required documents and information.
The Cognito team has built a platform that combines all of the tools and data sources a company needs for automating identity verification, KYC and AML screening. When built into customer onboarding processes for digital finance apps, Cognito provides a great user experience that enables companies to successfully onboard more customers and reduce fraud.
Identity verification is one of three critical parts of a complete onboarding experience, along with account connection (connecting your bank/financial data to an app) and account funding (moving money into an app), which Plaid provides today.
With Cognito, the next major step in our journey is to help developers build the best and most seamless onboarding experiences across all of these areas. This means simplifying every step of the consumer journey from their first interaction during signup, to the first magical moment delivered by that product – the first time sending money to a friend, or the first time trading a stock or cryptocurrency.
