US-based FinTech firm Ballerine is making waves in the FinCrime space for its pioneering approach to assessing businesses and merchants legitimacy. Founded in 2022, the startup has emerged as a frontrunner in leveraging artificial intelligence (AI) and advanced analytics to address critical challenges faced across the digital commerce landscape.
At the heart of Ballerine’s mission is the desire to enhance the security and efficiency of financial transactions for banks, gateways, and PSPs through advanced AI-driven solutions. By optimizing risk management processes and detecting transaction laundering, Ballerine aims to significantly reduce costs, accelerate onboarding, and minimize risks associated with fines and fraud, thereby transforming the landscape of merchant risk management.
How Ballerine was born
Despite the best efforts of banks and FinTechs in recent years, many institutions have struggled to identify whether or not a merchant is trustworthy. This has seen many criminals with dastardly motives break into the financial landscape.
Noam Izhaki, CEO at Ballerine, alongside his esteemed team of partners, saw this concerning trend bubble up first-hand, and set up Ballerine to foster a “need for change” in the industry.
Speaking to FinTech Global, he said, “We realized that current methods used by financial institutions to onboard and manage merchant risk are outdated. They fail to accurately assess the ‘real’ risks, are costly, and depend too much on multiple vendors and manual labor. Convinced there had to be a better way, we developed Ballerine. Our platform utilizes AI and orchestrated data tools to tackle these challenges head-on, offering a smarter, more efficient solution.”
What makes the offering so unique?
Traditional risk assessment tools like KYC processes and web crawling vendors are crucial for financial institutions when assessing risk and have even become ubiquitous in the industry.
However, there limitations are clear to see as their effectiveness is compromised as their functionalities are well-known, even to fraudulent merchants.
This is where Ballerine steps in. “Ballerine introduces a new approach to assessing merchant risk and creating blacklists of bad actors on a large scale. We analyse different and larger online data sets from existing tools in the merchant risk space, and assessing merchant risk holistically—from KYC and web presence to merchant transactions—uncovering their true risk for our clients. This automation of tedious tasks allows our clients to focus on their core work, directing their attention only where it’s truly necessary,” explained Izhaki.
The US firm’s innovative approach to merchant risk assessment goes further still, offering scalable solutions that accurately uncover the true risks associated with SMB merchants, thus setting new industry benchmarks.
“The bottom line is that we allow our clients to conduct merchant onboarding in less than a day, faster time to market in new industries and geographies, an 80% reduction in operational costs, and a dramatic reduction in the fines received from card schemes and the number of merchants they need to terminate,” Izhaki explained.
The future
Looking ahead, Ballerine is focusing on an ambitious expansion strategy aimed at broadening its horizons and enhancing its technology to improve merchant risk analysis and compliance.
Izhaki stated, “We’re keen to expand our capabilities and explore new applications for our technology, especially to improve merchant risk analysis and compliance. We’re also venturing into new industries, aiming to learn as we go. Additionally, we’re planning to reach out into new geographical and niche markets, with a particular eye on regions where e-commerce is rapidly expanding.”
But for the visionary startup, the story has only just begun. Motivated by a desire to redefine the FinCrime landscape, the company is committed to re-inventing its own pioneering platform based on customer feedback. This drive to continuously improve is set to see them solidify themselves as a FinCrime titan.
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