Title insurance and services provider FCT has acquired a majority interest in Fintracker, a specialist in identity verification and compliance technology for real estate transactions.

This strategic partnership is expected to help deliver greater efficiency, enhanced security and consistent compliance to the Canadian residential and commercial real estate markets. Terms of the deal weren’t disclosed.

“We're looking forward to bringing something different to real estate agents and realtors and then, ultimately, we can extend that to the other components in the ecosystem — which would be lenders, lawyers, mortgage brokers and the like,” FCT chief executive officer Michael LeBlanc told RENX.

Oakville, Ont.-based FCT is a subsidiary of Santa Ana, Calif.-headquartered First American Financial Corporation and has more than 1,200 employees across Canada. 

The company introduced title insurance to Canada in 1991. It also provides default solutions and other real estate-related products and services to approximately 450 lenders, 43,000 legal professionals and 5,000 recovery professionals, as well as real estate agents, mortgage brokers and builders.

What Fintracker brings to FCT

Fintracker digitizes the identity verification process and auto-completes FINTRAC and other pre-deal forms related to Know Your Client and Anti-Money Laundering regulations.

While FCT hadn’t used Fintracker’s technology before this deal, the Winnipeg-based tech firm has built and established a solid reputation among major real estate boards and brokerages since it was founded in 2017.

“Their product was built in a way that not only ensured compliance, but also was able to track the compliance requirements for the agent and broker involved in the transaction,” LeBlanc observed. 

“What we're going to do is replace some of the internal tools that they use to drive that ID verification with different tools that will enhance not only the accuracy of the IDV itself, but also will create a much more efficient and effective way to do that for the consumer and the realtor.” 

Relationship between the two companies

Fintracker’s founders, chief executive officer Simon Fiore and chief technology officer Matt Amihude, will continue to lead the company’s long-term growth and expansion as it operates as a separate entity from FCT.

FCT will provide capital to enhance Fintracker’s current and future offerings and add to its existing staff of about 10. Fintracker will also be able to access FCT’s systems and technology to enhance its efficiency.

Fintracker’s revenue model is based on transaction fees paid by realtors. 

“It's not one size fits all,” LeBlanc said. “We're looking at different pricing mechanisms to not only provide the tool, but also provide it in the most efficient and inexpensive way.

“We're not necessarily going to be the cheapest in town because we'd rather focus on the quality and be the best rather than the cheapest.”

Increased focus on technology to prevent fraud

Consumers are becoming more concerned about releasing personal information and LeBlanc said FCT is focused on keeping that information in their hands only, so it’s not shared as frequently as sometimes in the past.

While LeBlanc said technology advancements have significantly enhanced the real estate transaction experience, they’ve also benefitted increasingly sophisticated fraudsters who are able to use technology to impersonate other people.

The potential for abuse of the system has grown since the COVID-19 pandemic as more transactions are done remotely without face-to-face meetings. But fraud is also happening during in-person closings as people create and use false identifications.

“Everyone has their sights on the risk now,” LeBlanc explained. “We have seen, through our underwriting, the abuse of the system and the amount of impersonation and attempts by people to sell a property — utilizing an agent in many cases — and ultimately getting a mortgage by utilizing the services of a lender.”

Lawyers and notaries involved in completing those transactions can also be impacted, LeBlanc added.

“Since about 2012 we have been really active in the market around building tools, enhancing underwriting expertise and creating educational information for customers so they can spot these types of transactions,” said LeBlanc.

“Fintracker is a small company but, with us, I think we can really escalate the service efficiency and the security of the transaction — not only for the broker and the realtor, but also for the consumer.”