Financial Infrastructure Fintech Plaid Assists Scholar Fund in Incorporating Anti-Fraud Measures into Application Process

Scholar Fund, a non-profit organization that provides education, workforce placement, and financial assistance to underserved communities, recently managed the distribution of a $5 million fund to support over 6,000 Washington families and 20,000 children who are below the poverty line. However, they faced challenges in preventing fraud and ensuring a smooth application process.

Fraudsters have been targeting relief funds, making it difficult for non-profits like Scholar Fund to secure their processes and causing financial strain for families in need. Scholar Fund recognized the need to find a partner to enhance their anti-fraud measures while also maintaining a comfortable and safe application experience for applicants.

To address these challenges, Scholar Fund turned to Plaid for assistance in adding more anti-fraud measures to their application process without creating friction. They identified three key areas that needed improvement: digitizing identity verification, enhancing the manual review process, and expanding verification coverage for broader access to funding.

Before partnering with Plaid, Scholar Fund manually verified applications for the Washington Family Relief Fund, which was time-consuming and prone to errors. As the support provided by Scholar Fund is crucial for families’ financial stability, efficient verification is essential. Moreover, Scholar Fund deals with a diverse range of identity documents, which further increases the workload for their team. Thus, having comprehensive coverage to validate these documents became a priority.

Additionally, Scholar Fund needed Spanish language support for a significant portion of their applicants, making localization crucial. They sought a solution they could trust to prevent fraud and protect sensitive information, ultimately choosing Plaid as their partner.

Once Scholar Fund integrated Plaid Identity Verification, they were able to automate verification for 85% of the 51,000+ applications they received in less than a month. This significantly reduced the time and effort required for manual verification. Plaid’s Lightning Verification feature validated key information, such as names, addresses, and birthdates, in as little as 10 seconds.

With Plaid’s assistance, applicants were also able to autofill their personal identity details using information associated with their phone number and date of birth, saving them valuable time and expediting the application process. This streamlined approach aligned with Scholar Fund’s mission to connect community needs with opportunities and resources, ensuring faster access to funds for community members.

Plaid’s technology has not only allowed Scholar Fund to distribute millions of dollars to trusted individuals but has also prevented hundreds of thousands of dollars in attempted fraud. In cases where the verification process indicated discrepancies or the applicant’s information was not readily available in databases, Scholar Fund requested additional document verification. Plaid supports over 16,000 types of identity documents, facilitating this process effectively.

As a result of the implementation of Plaid Identity Verification, 92% of the applicants verified by Scholar Fund with Plaid were confirmed as in-state matches, confirming their eligibility for assistance. Plaid also worked closely with Scholar Fund to create Spanish-language support, expanding access to the Plaid-enhanced application experience.

By utilizing Plaid’s technology, Scholar Fund has been able to distribute funds quickly and securely to those who need it most. Protecting marginalized communities is a top priority for non-profit organizations, and preventing fraud is crucial to achieve this objective.

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