How this fintech startup secured a partnership with a global law firm
Co-founder shares the 3 early-stage strategies that laid the foundation for DocFox's success
DocFox CEO and co-founder, Ryan Canin
Image courtesy DocFox
A little-known South African tech startup, DocFox is fast gaining global attention.
The company has attracted investment interest from Silicon Valley, and their seed round of investment was also oversubscribed.
Not only that, but DocFox, which was founded last year, has managed to secure a partnership with global law firm Norton Rose Fulbright.
The fintech startup aims to simplify the FICA approval process by managing the process of requesting, verifying and storing documents.
"DocFox is a sophisticated yet easy-to-use web application that helps customers submit their FICA documents electronically in a just a few taps. Customers can upload copies of their proof of identity and address documents, or submit documents using their smartphone camera," says DocFox CEO and co-founder, Ryan Canin.
What FICA is all about
According to legislation portal, Acts Online, the South African Financial Intelligence Centre Act, 2001 (FICA) was enacted to try and combat financial crimes such as money laundering, tax evasion, the financing of terrorist and related activities in the country. It is part of the Know-Your-Customer (KYC) process for businesses to verify the identity of their clients.
Legislation prescribes that in non-face-to-face interactions, companies must take 'reasonable steps' to verify a client's identity. Certified copies of documents, while commonly used, do not provide concrete proof of authenticity, Canin says. And this is where DocFox comes in.
He says that DocFox offers a higher level of authentication than current paper-based solutions.
"It conducts various fraud checks using the latest technology to ensure document authenticity and compliance. The tool also simplifies and speeds up the entire process."
DocFox is not the first foray into entrepreneurship for Canin. His first company Gladi8, a fintech software business, was launched in 2012 while studying electrical engineering at the University of the Witwatersrand.
It was while serving his Gladi8 clients, which included large financial services institutions such as Liberty, Barclays and Standard Bank that he spotted the need for a KYC solution.
Together with Richard Cohen, former managing partner of KPMG's CEO Advisory Practice and owner of Grey Matter Thinking, as well as digital security consultant and experienced software developer, Gian Luca Cantarin, they founded DocFox to fill the KYC gap in the market.
The global connection
The startup recently announced its partnership with Norton Rose Fulbright to provide a digital solution to help companies ease their FICA compliance processes.
The partnership has, among other benefits, given DocFox scope to expand internationally via its US investor network and Norton Rose Fulbright’s global presence across Africa, Europe, the United States, Canada, Latin America, Asia, Australia, the Middle East and Central Asia.
SME South Africa speaks with Canin about what it took to get an international company to see them as the right startup to partner with and why they are best positioned to lead the local R2 billion market.
How big of a problem is FICA compliance for businesses and how big of a market does this translate into for DocFox?
FICA is a legislated requirement for most financial services firms (as well as law firms, estate agents). This essentially means that every individual, business, trust or any entity opening an account or hiring a lawyer in the country is getting FICAd - and usually multiple times a year.
Currently this is a painful process and most financial service providers have some backlog of unFICA'd clients - the reason the banks have been hit so hard with fines.
We estimate the SA market to be a R2 billion rand opportunity.
"We bring the agility of a smaller nimble tech business and the infrastructure and expertise and credibility of a global legal behemoth"
How different is the DocFox solution compared to what's already available in the market?
We are the only tech solution fully supported and legally guaranteed by a credible and global law firm. Our partnership with Norton Rose Fulbright is significant especially since we are participating in a really serious part of our client's business - compliance with KYC - it's their FSB / banking license at stake.
Why would you trust a small tech company when the stakes are so high? We bring the agility of a smaller nimble tech business and the infrastructure and expertise and credibility of a global legal behemoth. Clients are guaranteed legal compliance with legislation - no other solution can genuinely offer this guarantee.
Secondly, we offer an exceptional user experience allowing complete remote on-boarding with a white label interface creating an exceptional FICA experience for clients.
What convinced Norton Rose Fulbright that DocFox was the right company to partner with?
Our team truly aligned with Norton Rose Fulbright as far as the vision to give meaning to the intention behind the FICA Act, and at the same time ensuring that the client has a smooth on-boarding experience.
How did you get such a big business to trust and use your solutions?
We went through a six month due diligence process with Norton Rose Fulbright SA as well as Norton Rose Fulbright Global head office in London.
NRF advises many of the world's leading banks, asset managers, financial investors and insurers and consequently has detailed country-specific regulatory knowledge. We have worked with NRF to codify FICA legislation into intelligent decision engines which assess what is required for every application in a simple, secure and compliant way.
What were some of the difficult questions you had to answer to determine that the partnership was the right strategy for the company?
Do we share the same values? Is the relationship beneficial to both parties?
How has the partnership with Norton Rose Fulbright influenced your growth strategy?
The partnership with Norton Rose Fulbright has been invaluable. Their credibility and reputation as a leading law firm has created many opportunities, both locally and abroad.
"Accountable institutions are soon going to have to change how they approach client FICA"
What were the top 3 early-phase strategies that you focused on that set the company apart from the onset?
- We develop quickly and iteratively - developing in fixed schedule weekly sprints allows us to deliver new features to market quickly and frequently.
- We work with our clients to develop features - through intense customer discovery sessions, we unpack what our customers really need DocFox to do. This allows us to build a valuable and useful product.
- We aligned ourselves with strategic partners who could really influence our business and growth strategy.
What does this mean for the future of FICA compliance?
The reality is that the face of FICA in South Africa is changing with the proposed amendments to the FICA Act. Accountable institutions are soon going to have to change how they approach client FICA and adopt a risk-based approach.
In using DocFox, the switch to a risk-based approach will be effortless - accountable institutions will be able to implement controls to adequately manage and mitigate risk. We have worked closely with Norton Rose Fulbright to ensure that DocFox is compliant with current and future legislation.