Summary
Solo's reusable customer-vetting tool addresses a core inefficiency in bank-fintech partnerships: the repeated verification of the same customers across institutions. The model — with banks submitting their customer information program policies and receiving network-audited records of equivalent verification performed elsewhere — reduces duplication and the risk of enforcement actions over lax vetting. The coordination with Treasury, OCC and FDIC signals regulatory support for standardizing KYC.
Key Points
- The problem: Banks and fintechs repeatedly verify the same customers across partnerships. "Every day, banks and fintechs rely on each other's work, but there has never been a consistent way to represent that work, audit it, or evaluate it across institutions," said Solo founder and CEO Georgina Merhom. "Consumers repeatedly start from zero — not because verification hasn't already been performed, but because there has never been a common trust framework."
- The model: Solo created know-your-customer (KYC) and know-your-business (KYB) certificates for institutions to complete. The institution confirms which steps it took to verify identities. Solo audits the process and verifies what it attests, then issues a reusable certificate for partner institutions in the network.
- The mechanism: "A bank submits its own customer information program policy and required verification steps to the network," Merhom said. "The network identifies regulated institutions that have already completed equivalent or stronger verification on the same customer. If a match exists, the requesting bank receives a network-audited record of that work."
- The audit assurance: "You don't have to trust another institution's judgment. We map their work against your policy, filter out anything that doesn't qualify, independently audit that what they attest to doing is what they actually did, and make sure the supporting artifacts are available so you can demonstrate compliance during an examination."
- The regulatory coordination: Solo demonstrated the model in coordination with the Treasury Department, OCC and FDIC. The process has the potential to reduce the risk that banks face enforcement actions over customer vetting by fintech partners that regulators have argued is too lax to comply with the Bank Secrecy Act or KYC criteria.
- The broader trend: Solo's approach parallels the FDIC's initiative to create a certification body for fintech partners (standardizing third-party risk management information). Both reflect a broader regulatory push toward standardized, reusable compliance work across the bank-fintech ecosystem.
- The precedent: Solo last year debuted a service — modeled after the Zelle payment network — that allows banks to share customer data with each other while avoiding third-party data aggregators like Plaid.
- The significance: For the fintech sector, Solo's model could reduce onboarding friction and compliance costs while strengthening the audit trail — potentially reshaping how KYC is shared across banks and fintechs, and reducing the duplication that drives customer churn and operational cost.