Identitypass  Sycamore
Identitypass Sycamore

The Importance of Identity Verification for P2P Lending Platforms: Our work with Sycamore Ng


Given the proliferation of online lending platforms and P2P services, it’s no surprise that many people are taking advantage of these loan opportunities. Everyone wants a piece of the expanding peer-to-peer (P2P) lending market. To that end, several new players have entered the market, adding value to the ecosystem. However, with so many competitors entering the market and such high standards for identity verification required to operate as a compliant lender, many businesses find it challenging to implement an ID verification process that meets their requirements. Offering this type of delicate service necessitates providers prioritizing user identity verification.

Furthermore, because they have privileged access to personal information, users expect a higher level of security when using peer-to-peer (P2P) services. In addition to traditional anti-fraud controls, more platforms are implementing identity verification procedures as an additional user authentication factor. Identity verification gives lenders information about potential borrowers. These new security features assist P2P lending platforms in reducing the risk of fraud and identity theft for lenders, borrowers, and administrators. They can then make a more informed decision about lending them money.

In this article, we’ll examine why identity verification is vital for P2P lending platforms and how Sycamore, a fast-growing fintech company, uses Identitypass to secure its platform and users. Let’s dive in!

Fraud Challenges On P2P Lending Platform

Peer-to-peer lending (P2P lending) is the lending of money between individuals (or businesses) via an online platform without the involvement of financial institutions. P2P lending platforms connect borrowers directly to individuals willing to lend money and then base interest rates on the borrower’s creditworthiness. It has grown in popularity as P2P lending, in general, has promised higher returns on savings than simply depositing money in a bank.

The arrival of Covid-19 altered the payment landscape significantly. According to the World Bank, COVID-19 increased the adoption of digital financial services: approximately 40% of adults in developing economies made a digital merchant payment using a card, phone, or the internet, and more than one-third of adults in developing economies paid a utility bill directly from an account for the first time following the outbreak.

Because of the nature of online P2P lending platforms, they are highly vulnerable to fraudsters’ activities. These apps are generally available to the general public, and as real people sign up for legitimate services, so do bad actors. As a result, strict safety measures must be implemented to run a safe and secure platform where users believe their data is safe and secure.

Since the transition to digital banking, there has been a significant increase in online fraud. According to data from the Nigeria Inter-Bank Settlement System Plc (NIBSS), over N5.2 billion was lost due to fraud in the banking sector in the first nine months of 2020. The NIBSS identified social engineering-based identity theft, no two-factor authentication, PIN compromise, and several other methods as the most common fraudulent activities. According to NIBSS, most countries had almost no fraud cases, but Nigeria had a total fraud value of N3.3 billion in Q3 2020, compared to 499 million in the same period in 2019. This emphasizes the significance of digital and effective KYC checks by fast-growing fintech companies.

How Sycamore Prevents Fraud Using Identitypass

Online identity fraud has become a more severe and prevalent concern, as with all digital banking and lending platforms, a rapidly growing digital sector. Meeting KYC and AML requirements alone will not prevent identity fraud or protect businesses from fraudsters. However, Identitypass’s robust verification service goes a step further with its AI-driven technology, which enables smooth online verification and significantly reduces this risk.

The African citizenry’s quest for financial empowerment in the form of loans may be linked to the high inflation rate and epileptic economic situation experienced in this region. According to Statista, the unemployment rate in Nigeria alone is expected to reach 33% in 2022, resulting in approximately 23 million unemployed people. Many factors, including inflation, underemployment, and low wages, are causing citizens to look for other quick and easy loan options.

Sycamore’s core product is for individuals and businesses looking for the most secure platform to borrow from and lend to others. Identity fraud, identified as a person pretending to be someone else or using someone else’s ID documents, is the most common type of fraud in the fintech industry, accounting for 70% of all fraud cases in 2020. When new users sign up for Sycamore’s app, Identitypass’ AI-driven technology checks their identity by running a series of verification checks, meeting KYC and AML requirements, and preventing identity fraud in real-time.

About Sycamore Ng

Sycamore Ng, founded in 2018, is a peer-to-peer (P2P) company that promotes digital financial access in Africa by connecting lenders and borrowers to ensure that individuals and businesses worldwide are financially empowered to achieve their dreams. Sycamore also provides risk assessment, commercial lending, alternative analysis, real-time monitoring, payment, asset financing services, and fully digital business and personal loans.

Granting digital access to financial and loan services comes with security and compliance requirements and risks for Sycamore and its customers. With its automated identity verification service, Identitypass is helping Sycamore to leverage the risks, stay compliant, and onboard its clients smoothly without compromising safety.

Let’s Show you What You can Achieve On Identitypass.

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