Pioneering prop tech and legal tech startup, Thirdfort, has launched a ‘Source of Funds’ product for the real estate sector. Interestingly, they will be making use of video to record clients to help verify their identity.
The application also uses bank linking technology to streamline administration, while improving reliability in knowing where clients’ money comes from, said the company. It’s an important step for the startup which is seeking to massively speed up the way that property transactions take place and improve the security of doing so at the same time.
Thirdfort just like The Property Buying Company, which is FCA regulated (the UK’s financial watchdog), has several capabilities, but one of the fundamental aspects is that it aims to handle client monies for a property transaction, rather than have £100,000s sitting in a law firm’s escrow account where fraudsters could gain access and where delays are often created. It also is designed as a platform that buyers, sellers, property lawyers and other parties jump onto and work within to conduct a transaction.
However, when it comes to moving such large sums of money around ID checks and secure transfers are vital. It’s in this part of the platform that the new capability will be utilised.
How it works:
A lawyer is able to access this capability through Thirdfort’s website and send the client (who is buying/selling a property) a text message with a link to download the Thirdfort mobile App.
The App guides the client through a simple three-minute journey where:
- they take a picture of their identity document,
- they record a short video speaking into their smartphone camera,
- and then the client can choose to link their bank within Thirdfort’s secure environment.
Over 50% of users of the App are opting-in do to this and avoid the alternative of providing 6–12 months of physical banks statements and filling out a source of funds questionnaire to satisfy their lawyer, said the company.
The system gives lawyers visibility over the largest relevant payments in and out of their accounts, which in most cases is sufficient for lawyers to satisfy themselves as to where a clients’ money comes from, they added.
Since launch, seven law firms have gone live on the platform, with many clients opting in to linking multiple bank accounts, Thirdfort said.
As well as its Source of Funds product, Thirdfort also offers lawyers instant access to new ID and document verification technology, which they claim is ‘significantly more reliable at spotting fake documents and determining whether the person is who they say they are’.
Thirdfort was also a member of Mishcon de Reya’s MDR LAB legal tech programme and the firm has also invested in the startup company.
So….the inevitable question: is this a big deal? In the UK it probably is. Buying and selling property in what is one of the most important real estate markets in the world is, to put it politely, ‘archaic’, slow, and prone to fraud because of its siloed and cumbersome practices.
If Thirdfort can do anything to change this, it will be a major step. And if they can get their approach nationally accepted it could potentially be huge, given the vast size of the property market. For now the focus is on England & Wales, as property methodology varies radically from country to country. But, perhaps if this takes off here it could also be adapted to other countries where their approach also makes sense.