Shield offers two flagship products.

Shield Engage: Shield Engage streamlines the onboarding and underwriting of high-risk business customers in a centralized and secure application experience. A cannabis operator, a money services business, or a digital-asset firm completes an application when it wants to open a bank account, start payroll, take a loan, or buy insurance. Upon submission, Shield validates what the applicant entered against third-party sources and shares the results with the financial institution, which then underwrites the customer against its own policy. Shield Engage helps financial institutions reduce time spent onboarding new client accounts, keep prospects moving through the application process, streamline internal review to accelerate speed to market, and deliver an exceptional customer experience.

Shield Assure: Shield Assure provides the tools financial institutions need to meet the ongoing BSA/AML requirements associated with serving high-risk business customers. Once the institution has onboarded the customer, Shield monitors the portfolio and generates a case when something needs an analyst to review a specific piece of information. This can be a specific transaction, a policy breach, or a license that is no longer valid. Each institution can configure the case instructions to their specific policy and procedures. In short, Shield Assure validates activity and transaction data for ongoing compliance reviews, supports cross-team collaboration on compliance and operational processes, streamlines government and management reporting, and offers a clear view of the customer relationship.

Every organization on Shield’s platform must have a state business license. Shield validates those licenses through OpenCorporates’ API in all states, with the exception of New Jersey and Delaware, where status sits behind a state paywall and has to be checked directly with the state. The detailed information on each company provided by OpenCorporates is available for the financial institution to review at any time, providing additional insights beyond the license status. The OpenCorporates website is also used by the team when a result needs a second look.

The business problem: Licenses have to be valid and stay valid

Per FinCEN guidelines, a financial institution is required to complete customer due diligence, including verifying that a business is duly licensed and registered with the state in order to provide services. The license(s) must be held by the specific entity that is applying for products and services. Financial institutions must also understand and monitor the related parties and owners of the licensed business. 

Before partnering with OpenCorporates, Shield acquired this data from another commercial provider. At times, the data they received was not current or complete. Coverage was weak in some states. Data quality and consistency were irregular. The team at Shield comes from banking, compliance, risk management, and accounting backgrounds. It has SLAs with its clients to ensure the data it provides in the system is accurate. 

“Financial institutions cannot bank cannabis companies if they are not licensed by the state. If a license is suspended, banks and credit unions cannot continue the relationship. Managing compliance in high-risk business banking is a high-stakes endeavour which demands a fast and accurate approach to validating and reporting information.”

– Jenna Meyer, Chief Operating Officer, Shield Compliance

Shield needed a more reliable data source that matched state license information, that it could call at the moment an application is submitted and again on a rolling cycle once the customer is onboarded, and that would give the banker enough of the record (name, status, officers) to act without leaving the platform.

When a high-risk business submits an application in Shield Engage, the application includes any state business licenses held by that company (the state abbreviation and a license number). Shield then calls the OpenCorporates company API to verify the information. For most states, that is an exact lookup on the company number. For a handful of states, including Illinois, Vermont, and Washington, DC, the number the applicant types is a native company number, so Shield searches first the native company number, then retrieves the full company record.

Key information is flagged in the return data. The name, including previous names and alternate names, has to match the legal name and DBAs within the application. The status indicates if the business is currently licensed and in good standing. If the state provides the officers, the financial institution can verify that the information from the state matches the information provided in the application. All of the information displayed in the Shield Engage UI via the API call provides the required context for a financial institution to verify if the entity is duly licensed and in good standing. All information, including any source links, indicates the results are “powered by OpenCorporates.”

Once the institution approves the application, the customer moves into Shield Assure. Every state business license is rechecked on a 90-day rolling cycle, or sooner if an event occurs (for example, the same entity being added under a different financial institution). If the status moves off active and confirmed, Shield Assure generates a case, and the institution follows its own policies to follow up on it.

If OpenCorporates returns a “Not Found” result, the Shield support team checks the OpenCorporates website to see whether the miss is in the API or in the data and then checks the Secretary of State filing. If the license is on the state site and in good standing, Shield can override the “Not Found” status, mark it active, and check back in 30 days to make sure the state site and OpenCorporates have synced.

OpenCorporates publishes legal entity data from official primary sources. Officers, status, and names come from that same filing, which is what allows Shield to compare the application to the registry instead of to another vendor’s interpretation of the registry.

If a license is missing or inaccurate, the Shield team can immediately reach out to the OpenCorporates team to request independent verification of the information and for the record to be added to the database. The service is only as good as the data, and OpenCorporates owns the responsibility for providing accurate data.

For Shield Compliance, the ability to rapidly verify data from official registries is the only answer. Speed and accuracy are critical when it comes to ensuring compliance in high-risk business banking.