Project Overview
A UK FCA-authorised alternative finance provider wanted to build a two-sided invoice finance marketplace — SME...
Technology Stack
Compliance & Standards
The Challenge
A UK FCA-authorised alternative finance provider wanted to build a two-sided invoice finance marketplace — SME sellers listing invoices for sale and institutional buyers (hedge funds, family offices) purchasing them at a discount. Consumer Credit Act and FCA COBS requirements for the SME seller side, FCA COBS for the institutional buyer side, AML/KYC for both sides, and UK GDPR were the requirements. Budget: £155,000.
Our Approach
Seller portal
SME invoice upload, Companies House verification, bank account verification (Open Banking via TrueLayer), invoice authenticity check (OCR + buyer confirmation).
Buyer portal
institutional investor dashboard, invoice listing browser (with debtor credit score, days to maturity, yield), bid placement, and settlement.
Matching engine
highest bid wins, partial fills permitted.
Settlement
Faster Payments via Modulr BaaS.
FCA COBS 4
financial promotions — marketplace listings are financial promotions requiring FCA approval or exemption.
Institutional buyer exemption
sophisticated investor declarations (Article 50 FPO or self-certified high net worth).
SME seller
not a consumer (B2B transaction) — Consumer Duty does not apply, but CCA may apply if credit extended.
FCA COBS 14
appropriateness assessment for retail investors (if retail access added later).
Invoice Authenticity and Fraud Prevention
- Invoice fraud is the primary risk in invoice finance marketplaces.
- Multi-layer verification: buyer confirmation (email to debtor confirming invoice validity), Companies House debtor verification (company active, not in administration), debtor credit risk score (Experian Commercial), duplicate invoice detection (same invoice number + debtor + amount — cross-seller check), and blockchain invoice hash (immutable audit trail of invoice at time of listing).
Seller KYC
Companies House verification, director KYC (Onfido), beneficial ownership (PSC register), source of funds (Open Banking 12-month bank statement).
Buyer KYC
institutional investor onboarding (AML due diligence proportionate to investment size), source of funds declaration, PEP/sanctions screening (Dow Jones).
Ongoing monitoring
transaction monitoring for TBML (Trade-Based Money Laundering) patterns.
The Results
Marketplace live at 20 weeks, £148,000 — under budget.
SME sellers onboarded: 340 in first 6 months.
Institutional buyers: 12 (hedge funds and family offices).
Invoice volume: £8.4M financed in first 6 months.
FCA COBS review: financial promotions approved.
AML: 2 TBML indicator cases escalated to MLRO in first 6 months.
Invoice fraud: zero fraudulent invoices reached settlement (3 detected and prevented pre-settlement).
Yield to institutional investors: 8.2% annualised average.
“£8.4M financed in 6 months from a standing start. The invoice fraud prevention caught three fraudulent invoices before settlement — real criminals, real financial crime prevented. The institutional buyers commented that our AML documentation was the most thorough they had seen from a new marketplace." — CEO, UK Invoice Finance Marketplace (name withheld)”
Project Details
Related Case Studies
View AllOpen Banking AISP Platform for UK FinTech Startup
Open Banking AISP Platform for UK FinTech Startup. A UK FinTech startup needed to build an FCA-authorised Account Information Service Provider (AISP) platform that could a...
AI-Powered Customer Service Platform — UK FinTech
A UK FinTech company with 180,000 customers was spending £840,000/year on a 45-person customer service team, p...
Digital Banking Platform MVP — UK Challenger Bank
A UK challenger bank startup had received FCA authorisation with restriction (they could accept deposits but n...
Ready to Transform Your Business?
Let's discuss how our technical expertise can help you achieve remarkable results.