June 18, 2024

Solid v2 Platform Arrives to Power a New Era of Embedded FinTech Innovation

Solid v2 Platform Arrives to Power a New Era of Embedded FinTech Innovation

Powering a new era of embedded FinTech innovation, we are excited to announce the launch of the Solid v2 Platform – enabling Banks and FinTechs to offer embedded banking, payments, and card products in a safe, secure, and compliant way.

Since the launch of the Solid v1 Platform in April 2021, we've collaborated closely with partner Banks and FinTech clients. The launch of v2 is the result of our shared vision for the future of FinTech and a quest to unlock the potential of the FinTech ecosystem, in a compliant and scalable way.

What's new in the Solid v2 Platform?

Compliance: Our main focus was to ensure compliance, a key driver for Solid's v2 Platform – is not "bolted-on", but built-in to the Platform, with one clear goal – making FinTech better for everyone. Towards that objective, we have released four compliance pillars engineered in the v2 Platform:

1. CIP: Adherence to Customer Identification Program (CIP) is critical to any compliant FinTech. Solid v2 allows the Bank to implement the Bank's CIP program for the FinTechs. Solid ensures the collection and verification conducted within the stipulated Bank CIP program are recorded and memorialized on Solid's v2 Platform. The key benefit is that the Bank has flexibility in not just stipulating, but enforcing the CIP program by the type of FinTech use case, and the FinTech has the technology (powered by Solid) to record the CIP evaluation for the Bank's review (both in-flight or post-facto).

2. Controls: Granular controls for each FinTech program (e.g., accounts, payments, card issuance, limits, etc.) enable partner Banks to diligence, onboard, launch, and monitor FinTech programs fully adhering to their risk and compliance standards. Solid v2 gives the Bank the tools to exercise exceptional control over its FinTech programs at all stages of the relationship, ensuring the partnership succeeds via industry-leading compliance workflows, limits, and controls systemically built into the v2 Platform.

3. Reporting: Solid v2 provides advanced reporting and reconciliation not just at the account level but at the transaction level, all recorded on its immutable ledger, ensuring accurate account balances. Every event is logged and reported on the v2 Platform. These events log all FinTech transactional and non-transactional activities, captured in time series-based reports that are sent out nightly (and available for download on-demand using the Dashboard). Reporting capabilities in the v2 Platform are invaluable for Bank or Regulator-initiated audits or, for that matter, any audit pursued by the FinTech.

4. Tenancy: The Solid v2 platform is architected to connect directly to the FinTech's dedicated FBO (For the Benefit of) or FCA (FinTech Custody Account), which the partner bank provisions for the FinTech. This approach offers greater control to the Bank and provides reconciliation benefits for the Bank and the FinTech. The dedicated FinTech instance ensures comprehensive guardrails to mitigate risks for the Bank without resorting (unless where absolutely required) to a "kill switch."

Hierarchy: Hierarchies have been further refined within Solid's v2 Platform with enhancements to accounts and cards. A diverse range of FinTech use cases demands flexible account hierarchies, entity ownerships, and easy linking to payment methods, including cards. To address these, we have abstracted the complexities and decoupled Account Holders and Card Holders from Accounts and Cards. An Account Holder must be verified (as per the CIP) before an account is created, and similarly, a Card Holder must be verified (as per the CIP) before a Card Account is created.

Master Account & Sub Account Holder: The Master Account Holder, typically a business and often the FinTech itself, is the entity that owns the Master Account. This role is of significant importance as the Master Account Holder and the Master Account are provisioned by Solid at the time of onboarding, tailored to the specific needs of the FinTech. Depending on the FinTech's use case, the Sub Account holder can be a person or a business. The Sub Account holder owns the Sub Account and its funds. FinTechs can create both a sub Account Holder and Sub Account using Solid APIs.

Card Holder: The person authorized to use the card can only be issued a card after successfully passing the necessary OFAC and related bank mandated compliance checks. This check and other checks (as mandated by the Bank per the CIP requirements) are essential in screening and verifying the Card Holder. The Platform allows for flexibility in onboarding diverse types of Card Holders, depending on the type of card product issued.

Transaction States: Solid's immutable ledger has always been a differentiating feature. Solid, with its v1 Platform, was the first to market with an immutable ledger. The ledger functionality has been further enhanced to account for the various transaction intermediate states in the real world, creating a highly granular transaction timeline that includes contextual transaction states – Originated, Pending, Clearing, Cleared, Settled, Canceled, InReview, Returned, Reversed, Received, and Declined.

Reconciliation: With its v2, Solid continues to push ahead with industry-leading transaction-level reconciliation, eliminating the issues of a non-reconciled ledger between Banks and FinTechs. Each transaction includes the reconciliation status that flags non-reconciled transactions. Reconciliation can’t be 100% automated, but with Solid's built-in reconciliation, both Banks and FinTechs will save significant time and operational resources. The reconciliation engine features:

  • Intelligent Identifying & Matching
  • Partner Bank Ledger Synchronization
  • Built-in Exception Handling
  • Investigation & Communication
  • Nightly (and On Demand) Reports

Dashboard: v2 features an all-new Dashboard. An improved no-code command center for Banks and FinTechs, completely rebuilt from scratch.

Finally, we have a refreshed brand and website, including a new Doc Center.

Everything else you know about Solid is largely unchanged (making complex things simple), but what is evolving is the underlying architecture of how embedded FinTech is developed, managed, and operated in today's complex regulatory environment.

We are grateful to our FinTech ecosystem (Banks, FinTechs, and Partners) for working with us to help launch the most advanced embedded FinTech Platform ever built – Solid v2. 

Please contact us for your FinTech Platform needs.

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