Exclusive: Markaaz Introduces Global Business Identity Platform

A new global business identity platform is on the scene, enabling banks, FinTechs and enterprises to verify and onboard businesses of all sizes, particularly smaller businesses. Four years and hundreds of millions of data points in the making, Markaaz has a unique, two-sided business model and some serious executive credentials behind it as it shoots for nothing less than recasting the way businesses access the services they need to succeed.

“No one has brought together in a single pre-populated directory, a comprehensive view of every business globally and a two-sided platform that allows the parties to securely connect with each other and create real-time, mutually consented monitoring,” says Markaaz CEO Hany Fam. “So that’s a big deal.”

And so it is.

Fam says that Markaaz solves a 40-year problem of piecing together data about all businesses, with a particular focus on small and medium-sized businesses, which exist in the nooks and crannies of multiple databases. Much of those datasets are out of date, inaccurate or incomplete, with updates sometimes only every 220 days — which can be a lifetime for small businesses. As a result, these businesses can spend up to a third of their time responding to requests from banks and other third parties when asked for data to support their identity, viability and creditworthiness. Not only does that take time, but it also often results in a negative outcome for the business since banks often lack the right information to verify and subsequently underwrite the business for a loan or even validate that it is a business in good standing to open an account.

“Thirty percent of small businesses get rejected for basic services like credit cards, bank accounts, et cetera, because they can’t be verified,” Fam said. “And we see that number consistently across the whole world.”

A Team That’s Been There Done That

Fam, who saw the genesis of the idea while developing Mastercard Track (later rebranded as Mastercard Business Payments Services) as an executive at the company, wants to change the way small businesses operate by connecting them with suppliers, customers and financial institutions in a data-driven ecosystem. Markaaz today works with financial institutions, FinTechs, mid-market lenders, networks and payment companies to enable them in real-time with better business information and insights to make informed decisions, that will benefit everyone, including the business that is applying for a service with those institutions.

But the Markaaz team and its advisers aren’t simply building on a track record of success, although the team’s extensive experience building a global business directory gave it a head start for creating Markaaz. In Fam’s recent interview with PYMNTS CEO Karen Webster, he offered a peek under the hood.

It Starts with the Directory

Markaaz has created a pre-populated directory of over 300 million businesses worldwide, covering firmographic, financial health and compliance attributes for all of them. It pulls from curated 65,000 global data sources and applies a proprietary matching algorithm and data stewardship to ensure that every attribute of the business identity is identified, accurate and up to date.

Banks, FinTechs and other enterprises use this data to identify, verify (including bank-grade ‘Know your Business’), onboard and monitor businesses. The data is accessible in real-time via application programming interfaces (APIs), automated ‘batch and a browser-based’ solution. The company has announced working with Centerfield, Byfunder, Lendfoundry, Temenos, Paysafe and has a lineup of top-tier enterprises and banks in the integration pipeline.

The company’s vision is to make this data more broadly available to smaller businesses so they can be in control of how they are seen in the market. Adding payments to its roadmap is also on the list.

Creating a Better Scorecard

The combination of best-in-class public data and end-user participation, along with robust security measures, according to Fam, sets Markaaz apart in a market that has previously relied on one metric: Credit scores that don’t fully reflect the business’s health.

“We need to get beyond simple ‘name, rank and serial number’ types of data to evaluate a business,” Fam told Webster. “In many cases, businesses don’t even have a credit score or perhaps they’re unaware of its impact.”

From Markaaz’s perspective, a business credit score is only one data point. Other information, such as a risk score and risk class, are also essential and offer a more nuanced look at the health of any company.  The right health data on a company can help you (the financial institution) make intelligent decisions when moving forward with new clients.

Fam believes a credit score can be a “completely inaccurate or blunt instrument.” He believes that scoring in this day and age, not only because of AI but also because of the depth and breadth and the two-sided nature of the Markaaz’s platform, will move toward real-time contextual scoring.

That’s why Markaaz is creating a proprietary business health score that uses a variety of data points and metrics to score businesses within its network. Fam emphasized that the scoring methodology typically involves analyzing financial data, performance indicators, market trends and several other factors.

Or, as Webster put it, the score gives a picture of “the health of this business at this moment in time.” Moving to a real-time contextual health score gives banks a more accurate picture of its viability, ability to expand and creditworthiness. It will also enable banks and enterprises to create their own contextual scores.

As Markaaz gains traction with banks, Fam expects it can close the gap between the products banks have developed today for small businesses and what they really need. Proof point: Fam says he recently received an email from a senior executive of one of the top-tier banks in the U.S. hoping to do exactly that.

“I think there are some institutions that will be winners because they’re thinking actively about this,” Fam said. “They’ve got the resolve to do something about it. And they’re coming to us and saying, OK, I’m tired of missing out on 30% of small business applicants.”

Fam made the point that for many of the underrepresented segments of small business ownership, having accurate data is the difference between opening an account at a bank — or keeping one — as banks take a more critical look at their small business banking portfolios.

What’s Next

Markaaz — which means “center” in Arabic — is packed with experienced executives and advisors, most of whom have worked together over many years from leading organizations including banks, data companies and payment networks and retailers. The team is focused on establishing Markaaz as the “global business identity platform.”

Moving forward, the company plans to establish a trust bureau for business data and Fam hinted at the ability to provide real-time transaction-level financing and factoring in ways that have not been previously available to small businesses. Fam said Markaaz is committed to making its platform available to everyone worldwide to support business growth, improve the profitability of enterprises, and provide greater access to businesses.

“We’re going to make Markaaz available to everybody to support them, grow their business, make the lives of their enterprises better, more profitable and provide them with greater access to data and financing,” Fam said. “We talk a lot about the concept of business inclusion. It’s not a phrase you hear a lot about, but we’re very committed to that.”