Plaid Full Stack Onboarding Solution: Driving Value Through Connected Components
A customer account — whether at a fintech or a bank — opened without appropriate controls is dangerous, while an inactive one is worthless. Plaid has been building out and acquiring the key building blocks to deliver a full stack onboarding solution that not only supports smooth and secure account opening, but also helps customers activate and start using those accounts.
In January 2022, Plaid announced the acquisition of Cognito, “an identity verification and compliance (KYC, AML) platform that makes it faster, easier, and safer for people to verify their identity when signing up for financial services online.” The company's products are already being used by more than 300 companies, including many of Plaid’s clients, such as Affirm, Brex, Coinbase, Current, Republic, and Wyre.
After the dust has settled, we sat down with Alain Meier, the CEO and founder of Cognito and now the head of Identity at Plaid, and Kevin Young, responsible for communications at Plaid. We were keen to better understand not just the capabilities that Cognito brings to Plaid, but also the broader vision of where the combined company is heading. This Solution Brief summarizes our key takeaways from the briefing.
With the addition of competitive identity verification capabilities, Plaid now offers a full stack onboarding solution (see Figure below). And while Plaid’s Identity Verification is a robust solution on its own, the true power lies in combining it with downstream Plaid capabilities for account linking and payments. Since all the components come from the same provider and are tightly integrated, the solution improves the quality of the end-user experience, increases conversion rates, improves back-office processes, and helps prevent fraud.
Digital banks and other fintechs that already know Plaid now have the option to expand the scope of engagement and reap the benefits of a tightly integrated solution from a single provider. Larger banks should also consider how Plaid’s expanded offering can support them in their efforts to help their customers connect to the digital economy.