Benzinga - Detroit-based Benzinga, a media and data provider bridging the gap between retail and institutional investors, sent its team to Miami, Florida, for Bitcoin 2023. During that time, Benzinga sought to recognize the innovation in digital assets broadly and spoke with founders, investors, and others. The following is a conversation with Jacob Sever, Co-Founder and Chief Innovation Officer of Sumsub.
The conversation has been edited for clarity.
Q: Hi, Jacob; nice to meet you. Care to start with an introduction?
Jacob Sever: My background is in animation and computer graphics. It provided me with expertise in digital image manipulation, a knowledge that drove us to develop technologies for detecting various types of fraud even before Sumsub was established in 2015. As the Chief Innovation Officer, I contribute to product development, sales, and compliance, ensuring our company stays at the forefront of market trends. Although I oversee many aspects of the company, I strive to step back from day-to-day operations and focus on future-oriented strategies.
What’s trending, and how do you act on that information?
We have a global customer base, including many crypto-related businesses. This has given us deep insights into their specific needs. Initially, our product focused on identity verification and customer onboarding, but we quickly realized that fraud could occur at any stage of the customer journey. We expanded our product offering based on customer feedback and analytics. We continually engage with our customers, understand their challenges, and develop solutions accordingly. One significant trend we identified is the travel rule regulation, which aims to make crypto transactions transparent. We integrated this feature into our platform to support seamless onboarding and transaction verification. Additionally, as businesses move towards Web3 and portable KYC, we align our direction with these emerging needs. For instance, we developed reusable KYC, allowing verified users to be easily shared between our clients, streamlining the onboarding process for end users. Our platform also offers comprehensive transaction monitoring, including the travel rule, within a single integrated solution, eliminating the need for multiple vendors and providing centralized management.
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Tell me about the motivations for starting the business.
Our company was founded in 2015 as an identity verification company with four co-founders: Andrew Sever, Peter Sever, and Vyacheslav Zholudev. We have offices in various locations, including the U.K., Berlin, Cyprus, and Miami. Initially, we focused on developing technologies to detect fraud in digital images. However, there was minimal demand for this solution as businesses were more concerned about trusting users rather than authenticating images. Realizing this, we pivoted and adapted our existing technology to analyze ID documents, incorporating facial biometric features. This marked the creation of our first KYC tool. The journey was challenging, but we were fortunate to have a knowledgeable CTO and co-founders who focused on scalable infrastructures from the start.
What’s the most basic use case?
One of the most fundamental use cases of our service is when individuals want to open a bank account. The initial step in this process is verifying their identity by submitting their passport or driver's license, and performing a facial scan. This is the primary function that our customers, including prominent names in the crypto space like Binance and Bitget, rely on.
How hard is it for a competitor to enter and replicate what you’re doing?
The nature of our product is compliance-based, demanding technological and legal expertise. Developing a global solution necessitates a deep understanding of various jurisdictions, which requires significant time and capital investment. Additionally, the accuracy of our solution is directly proportional to the amount of data we possess. Consequently, I have reservations about the efficiency of newcomers who lack extensive references and experience to avoid our mistakes; our background and expertise serve as our advantage. Scalability is crucial for us, particularly in the volatile crypto market.
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