How Fintech Apps Detect
Risky Users During Onboarding

The Cost of KYC

Know Your Customer (KYC) checks (ID scans, facial recognition) cost money—often $1 to $5 per user.

If you run these expensive checks on every signup, fraudsters will bleed your budget dry by sending thousands of fake signups.

Pre-Screening with IPs

Smart fintechs use IP intelligence as a cheap "pre-screen" filter.

• Scenario: User signs up claiming to be in New York.
• Check: IP Geolocation says "Vietnam". IP Type says "Datacenter/VPN".
• Action: BLOCK immediately. Do not pay $2 for an ID scan.

Compliance & Sanctions

You are legally required to block signups from sanctioned countries (e.g., North Korea, Iran). IP blocking is the first line of defense for OFAC compliance.

Code Snippet (Python)

import requests

def validate_signup(ip_address, claimed_country):
    r = requests.get(f"https://api.ipasis.com/v1/lookup?ip={ip_address}")
    data = r.json()
    
    if data['country'] != claimed_country:
        return False, "Location Mismatch"
        
    if data['is_vpn']:
        return False, "VPN detected"
        
    return True, "Proceed to KYC"