When looking at how the banking industry has changed over the last decade, it’s safe to say technology has been among the biggest disruptors. Advances in AI, 5G and smart data coupled with shifting customer expectations have given way to a new generation of Fintech solutions - like Rabobank’s SurePay.
Today, most quick digital payments only require the recipient’s bank account number or IBAN. These payments are made in real-time, so once you authorise them, it’s a done deal - which opens you up to a fair amount of risk:
- What if you mistakenly sent the payment to the wrong account?
- What if you get tricked into making a payment, only to realise it was a fraudulent account?
In many cases, by the time you realise there’s been a mistake, the transaction has already taken place and getting your money back will pose quite a challenge. Rabobank’s SurePay provides added security by enabling users to verify if the name or the payment beneficiary matches the IBAN.
This is our Corporate Startup of the week:
Let’s take a closer look at how SurePay went from corporate startup to independent spin out in just a few years and how it’s making 95% of online payments in the Netherlands safer than ever.
About Rabobank Group
Headquartered in Utrecht and founded in 1896, Rabobank is the second leading bank in the Netherlands in terms of assets. They’re currently active in 38 countries with a total of 43.272 employees - all dedicated to Rabobank’s mission of “Growing a better world together”.
Rabobank offers its customers a variety of banking products and services, including:
- Payment and savings services
- Insurance and loans
- Strategic advisory services (e.g. treasury, mergers & acquisitions)
With a net profit of €1,1 B, their value creation model focuses on three key areas: Food, inclusivity and climate & energy. Other prominent focus areas include retail banking, wholesale banking, rural banking, vendor finance, leasing, and property development (just to name a few).
At Rabobank, they believe in “innovating by doing”, as described on their website:
“We have all the resources we need to research opportunities, validate and convert them into new business models for our business lines...We make sure that the innovations well reflect our strategic priorities as a bank.”
Some of the ways Rabobank accelerates innovation is through:
- Its VC fund Rabo Frontier Ventures led by Harrie Vollaard
- Its in-house “Innovation Factory” led by Gert Hans Berghuis
Focusing mainly on McKinsey’s horizons two and three, Innovation Factory uses lean startup techniques to develop new and innovative initiatives. Some of their most notable ventures include Peaks and SurePay.
Meet Corporate Startup, SurePay
SurePay’s IBAN-Name Check solution enables users to verify if the name and IBAN number of the payment recipient match. This can help both individuals and organisations:
- Detect fraud before it happens
- Prevent misdirected payments
- Make business processes more efficient
Since its launch in 2016, SurePay has become a top-rated service in the Netherlands, checking over 90% of all online payments in the country. Today, the service is also available in the UK. According to the company website, SurePay has performed over 2.359.658 checks to date, and that number is still rising.
As described by SurePay CEO and Co-founder David Jan-Janse:
”By checking IBAN and name combinations at the point of payment, bank and identity fraud diminishes by 81% in online banking. Not to mention a 90% decrease in failure in the onboarding process of new customers for corporates. By integrating the check at the customer onboarding stage, both customers and suppliers have found it easier to prevent dropouts that would require second-line investigation.”
In 2020, SurePay began its transition from corporate startup to becoming an independent private company. As a successful spin-out, SurePay is able to provide independent services to financial institutions, government agencies, businesses and other clients. As described by Managing Director of Rabo Frontier Ventures, Harrie Vollaard:
“SurePay is proof that innovations from within our own organisation can grow into a successful company. It all started with a great idea that was encouraged to grow. We’re very proud to see SurePay evolve into an independent company now.”
How SurePay works
SurePay works by providing a “pre-payment stage” that verifies the correctness of the entered payment details before an actual transfer is made. Verifications are made based on whether or not the beneficiary’s name can be paired with the account number.
If your information checks out, the payment goes through smoothly. However, if the details are incorrect (e.g. the name of the beneficiary doesn’t match the IBAN), SurePay provides a notification that alerts the payer. This decreases the chance of mistakes or potential fraudulent activities. There are three different types of notifications:
Users get this type of notification when the entered name doesn’t match the account information. The notification will let you know that the account holder is registered under a different name.
This notification is issued in case there has been a slight discrepancy or typo. You’ll be prompted to verify the name as it’s registered with the bank (e.g. Charles instead of Charlie).
Service Not Available
You’ll get this notification if SurePay isn’t able to verify your account details (e.g. if it’s a foreign account or there’s insufficient data available).
SurePay is currently available in two countries, the Netherlands and the UK:
- IBAN-Name Check has been tailored for the Dutch market
- SurePay Confirmation of Payee follows UK market regulations
The benefits for Rabobank
Corporate ventures like SurePay often thrive because they have the support and backing of a strong parent company. While independent startups struggle to find the funding and resources they need to take their ventures forward, corporate-backed ventures have access to virtually unlimited assets. This allows founders to focus on what’s important: Creating the best possible product or service.
SurePay was able to leverage a plethora of vital corporate assets from its parent company Rabobank. This not only helped them develop their solution in a fraction of the time, it also gave them access to vital industry know-how and customer data needed to build a solution that solves real customer pain points. Here are just a few of the other corporate assets SurePay was able to leverage:
- Access to existing technology and insights from similar initiatives.
- Corporate funding to move the project forward.
- Feedback and customer insights from Rabobank’s existing users.
- A network of industry-savvy mentors and stakeholders to consult.
- The trust and confidence that comes with the backing of a company like Rabobank.
Rabobank, for its part, also stands to gain a lot from developing corporate ventures like SurePay. Here are a few examples of the benefits that can be gained with each new venture:
- The insights gained can be leveraged to improve existing offerings or create new ones.
- The potential to build pioneer offerings with disruptive potential.
- The creation of new, low-risk revenue streams.
- Building a reputation among customers as an industry leader.
- The opportunity to tap into a new customer base through new or improved offerings.
Rabobank’s in-house Innovation Factory helps boost these benefits by providing a funnel of promising new ventures, ensuring constant evolution and leveraging corporate assets efficiently.
As an independent spin-out offering services in both the UK and the Netherlands, SurePay is still going strong in its mission to prevent fraud and reduce the incidence of online payment errors. With that goal in mind, they’ve recently introduced two new banking solutions:
Switch Check - which enables users to check if a person or company has switched banks.
SurePay PayID - Which enables users to make secure payments to their phone contacts.
Since its launch in the UK, SurePay has performed over 120 million Confirmation of Payee checks and now verifies over 25% of all online payments in the country. It has also gained NatWest Group and Atom Bank as customers, and there are plans for ten additional UK banks to join the service.
In May of this year, the company website proudly announced that SurePay had been nominated for FintTech Futures’ PayTech Awards 2021. The two categories are:
- Best PayTech Partnership
- Best Use of Security/Anti-Fraud Solution in Payments
Additional plans for the future include expanding into Europe by providing cross-border confirmation of payee checks. This will enable SurePay customers to make safe payments even outside of the Netherlands or the UK.
Today, the SurePay team totals 72 people from 21 different nationalities, and there are plans for expansion to be announced in the next few months.
Would you like to identify new growth markets bursting with opportunities your corporation can capitalise on? We can help you explore new technologies and business models to future proof your business.