Shanghai Evans Investment Management Limited

ONDATO: Start-ups, SMEs and digital services

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Strapline:  ONDATO provides a complete compliance management suite in regard to KYC procedures.  Each month we will illustrate via a case study how a company has used the ONDATO offering in their business.  This month we explore how important digital services can be to start-ups and SMEs and look at alternative ways of providing digital services to these companies via intermediaries or aggregators.

Script of Interview

Interviewee                                      Mr. Povilas Steikunas, (PS)

Position                                            Head of Partnerships

Company name                              ONDATO

Company website:               

Case study:                                     Start-ups, SMEs and digital services

Interviewer                                      John D. Evans, CFA (JE)

Interview conducted on                20 September 2022


JE  Okay, welcome to the viewers to this episode of SEIML Ventures. Today we are speaking with Mr. Povilas. Steikunis, who’s the head of partnerships at ONDATO. As background ONDATO provides a complete Compliance Management Suite with regards to know your client or KYC procedures. This month we explore how important digital services can be to startups and SMEs and look at alternative ways of providing digital services to these companies via intermediaries or aggregators. So, on that point, welcome, Povilas, good to have you back for another discussion here on SEIML Ventures.

PS Hello, John, nice talking to you, again.  We at ONDATO offer a comprehensive compliance management suite that is equipped with all the tools required for the KYC onboarding, identity verification and client monitoring to support the compliance process.

Digital Business and the Need for DD

JE  Okay, you know, I’m quite familiar with ONDATO, we have been working together for a while. But the topic I was interested to speak with you about now is so let me start off by giving the viewers a little bit of background and focus here. I have been working with startups and SMEs from Asia and Europe for about six years now. Although the internet allows everyone to think and act globally, I’ve gotten the impression that the majority of smaller businesses still operate locally or regionally at most. However, it is often the case that entities, prospective customers, suppliers, investors, partners, maybe in other parts of the world. And so even though small startups and SME’s often need to think global, it’s difficult to do. And this was the initial reason to set up SEIML Ventures, so that startups and SMEs could promote their company via social media and other aspects to various parts of the world. But, and this is the key, in addition to social media marketing, we do social media business development. The difference between marketing and business development is that the second is more targeted at specific people and companies with a view to making direct contact, as opposed to pushing out general marketing content. But as we know, there are a lot of fake accounts and fraudsters in the digital world. And so, we must have a process of due diligence incorporated into our international business development, that is key. And this is the reason I reached out to ONDATO, some months back> I wanted to start this offering simply, and so, I focused on two of the ONDATO offerings, person identification and business verification. So, give the viewers a brief overview of how these two services function at ONDATO.

PS Sure, the identity verification methods are actually very simple to use, but extensive enough to prevent fraud and ensure regulatory compliance. While faces are much more complex, you know, than documents ONDATO uses technologies that make light work of recognition. Our system checks whether it’s an actual face or mask. The checks can even include biometric age evaluation, comparing that to the data provided by the document.  It is very easy to use and it involves four simple steps. So, the user takes a selfie and snaps the picture of both sides of their ID document.  If there is a passport and just you know the main page instantly uploading them to our cloud into our system, then ONDATO’s artificial intelligence that uses optical character recognition known as OCR, and various spoofing detection tools such as you know, such as you know, document check for the validity purposes, the information double checking, you know, between MRC zones and what was captured and also double checks within various registry is that you know, that are enabled depending on the client needs. If the ID is genuine and biometric data analysis learns that the biometric data is not spoofed, then both are compared. If they match the customer is then halfway to having their verification request approved.  The gathered data is done automatically cross reference with sanctions, adverse media screening list, all the accumulated information is then given to a dedicated KYC compliance specialist that adds the final confirmation to either approve or deny the verification request. Quite straightforward.

JE  I think this is a simple but a very important first step for a business because I believe that if you can positively identify the person you are engaging with, then it’s extremely unlikely it would be a fraudster, as they know they can be traced from the data and search you have just done. So even though it’s very simple, it’s a powerful first step; if that other person knows you know exactly who they are, and where you can get them that that reduces the fraud risk a lot.  But I think it’s also important to go to a second step and do some basic due diligence on the company as well as the individual. So, tell us about the business verification service.

PS Sure, so the fully automated business representative document verification is a one stop solution for all the legal entity onboarding needs. The order of the KYB as we call it, like business onboarding, verification process, you know, we differ depending on each client, because there are multiple you know, processes, that compliance people you know, perform. So, typically, the first step is providing all the needed information by completing the questionnaire.  Typically, you know, this is being performed by secretaries, account managers or even assistants you know, so, we tailor those questionnaires depending on the client needs and business purpose.  Then the business code is provided and ONDATO solution goes through all related data grabbing all associated data from various government registries and official sources. And then the biometric data is scanned creating addressed in connection between the representative face, the biometric data and the business in question. Following this, the representative confirms their identity. And the final phase then involves a human KYC professional who reviews, all the information gathered and decides whether to approve or deny such business ideas.

The Business Model

JE  Okay, now, to my mind, these two digital due diligence, DD services I abbreviate, are a good start for a company that wants to do digital business development. But there is an operational issue in this whole process and that there are setups costs to the service to both the company and ONDATO, in addition to the cost per transaction, per transaction or check, and it might not make economic sense for a very small company to be set up if they’re only going to use these services very occasionally, maybe once or twice a month. I understand most of ONDATO’s existing customers tend to be higher volume users like financial institutions, or online platforms that deal with a very large number of consumers. However, there are many business aggregators, that deal with large number of startups and SMEs, that might be able to and want to offer the ONDATO services where they contract with ONDATO, to the many companies they deal with. And I see several groups of business.

JE Here’s, you know, commercial banks, in my sphere of the world, incubators and accelerators are in contact with a lot of startups, business associations, chambers, of commerce, and business providers, business service providers, like auditors, or law firms. So, in addition to making the service available to its customers, it might also provide the aggregator who is contracting directly with ONDATO an advantage to one of its competitors that doesn’t have a similar office, I see this could be a strategic and competitive advantage for an aggregator like SEIML, or many of others to get involved with. But that’s just my perspective. So how do you view that source of business collaboration with a business aggregator from the perspective of ONDATO?

PS I think you’re absolutely right, John.  You know, for the most of our existing customers, you know, we tailor solutions depending on their agenda. Sometimes we have such business cases where we create end to end solutions, you know, to enable full compliance cycle from digital KYC onboarding, along with identity verification in order to demand like the full cycle. And as you say, different situation is with smaller companies, because the smaller companies such as startups, and SMEs, have a small and infrequent user base. So, for them, individual solutions are not financially viable. Therefore, we at ONDATO, you know, want to be a game changer, because we see the gap and see business aggregators as a niche. Because at the end of the day, it’s a win-win situation, you know, if I get those smaller ones, from the specific aggregator, it’s an absolute win. So, for business aggregators, that can be also a very efficient value-added service to provide to their startup or SME customers, such as commercial banks, incubators, or accelerators, Business Association, chambers of commerce, business providers, like audit firms or law firms, and even more, so you name it.

JE  Okay. Yeah, I mean, I’m convinced myself. So, it’s good to see that there is a buy in at ONDATO. In terms of the concept of working together with an aggregator, because I’m looking forward to really developing this, I think there’s so much that smaller companies can do in the digital world and their commercialization process. They’re not taking advantage of it. And if they do, they’ve got to put some proper procedures in place. So, my initial focus will be on ASEAN countries, and Hong Kong and Taiwan, where we plan to expand our digital services with other partners from Europe who have an established startup network in Europe. Thus, our first phase will be connecting startups SMEs between Europe and ASEAN.  By definition, a great business and right away there will be a need for this sort of business verification. So, I know the per unit cost of due diligence is quite competitive. So, we want to build this digital eco system between SEIML and ONDATO and incorporate this in our business processes going forward. So, I look forward to working together, this video will be sort of a starting announcement. And then we’ll develop a more marketing strategy for through our conferences that that we’re hosting together and hope we’ll grow this into a meaningful provision of digital services for startups and SMEs. So, thank you very much for your time today, Povilas.

PS Thank you so much, John. Looking forward, you know, to streamline this.