How Parafin cut KYC review time by 95% with Persona and helped merchants access financing faster
Persona’s Case Review Agent gives Parafin the capacity to scale its financing programs without additional operational headcount.
Parafin, an embedded financial platform, helps companies offer financing and lending options for their small-business customers.
Platforms that serve small businesses know that access to capital can help an owner cover payroll, restock inventory, or bridge a cash-flow gap. But offering financing requires much more than providing an application. It means building and operating a complex web of financial infrastructure that involves underwriting, KYC, compliance, funding, servicing, and collections.
Parafin provides that infrastructure by enabling platforms like DoorDash to offer working capital to their customers without building a lending operation from scratch. To date, Parafin has funded more than 50,000 small businesses and extended more than $35 billion in financing offers through its platform partners.
As Parafin grew, so too did the volume and complexity of the financing applications it received, slowing down approvals and making it harder for merchants to access the capital they needed.
Key results
~95% reduction in median KYC review time for capital products, from about 18 hours to under one hour
99% decision alignment between the agent and Parafin’s human reviewers
100% of eligible KYC cases approved automatically, while routing exceptions to human review
Challenge: Complex manual KYB and KYC reviews slowed access to capital
Say you’re a food delivery service that partners with Parafin, and you want to offer a fixed-term loan to a restaurant on your platform. To do that, Parafin’s risk operations specialists must verify the restaurant and its ultimate beneficial owners (UBOs). Most applications will move through a fully automated approval process, but without using an agent, approximately 10% to 15% will require manual KYC or KYB review.
As application volume grew, the resulting reviews competed with fraud investigations and high-dollar reviews for analyst attention. Even though most applications were approved automatically, the resulting backlog added time to the review process and pushed back when some merchants received their funds.
According to Aimal Mehrabi, head of operations at Parafin, while manual review was necessary for ambiguous cases, routine reviews were becoming a bottleneck. Each time an analyst managed a KYC case, it took about five minutes to open the case, understand the context, make a decision, and return to other work. Over hundreds of cases every week, those minutes added up, limiting the team’s capacity for more complex reviews.
When KYC reviews slow down, it snowballs into a backlog for other review types. We needed a solution that would buy back time for my team, help our merchants get funded faster, and maintain accuracy as we worked through reviews.
Some cases also required manual review because of minor typos or errors in the loan application, such as a mistyped EIN, a trade name entered instead of a legal name, or a missing LLC. Analysts had to take time to triage: which cases could be resolved quickly, and which needed more information? These cases couldn’t be solved without manual review from an analyst, and adding analysts as application volume grew was unsustainable.
Parafin needed a way to increase review capacity and resolve routine cases accurately, while reserving human attention for ambiguous and high-risk reviews.
Solution: Persona’s Case Review Agent helps Parafin scale financing decisions with speed and confidence
To scale its risk operations function, Parafin turned to Persona’s Case Review Agent. The agent works by analyzing the full context already collected with Persona during KYC and KYB. Then, the agent applies Parafin’s policies and historical decision patterns and either auto-approves eligible cases or recommends a decision for analyst review.
However, automation wasn’t the only reason Persona’s agent stood out. Several other factors made the agent a strong fit for Parafin:
Built on existing identity context already in Persona
Because Persona already powered Parafin’s KYC and KYB workflows, implementing Persona’s Case Review Agent was straightforward. The agent operated within Persona’s existing case environment, using the verification data and case context Parafin’s team already relied on.
Collecting and processing personally identifiable information (PII) for KYB and KYC required strong security safeguards, so sending that data to a separate AI provider wasn’t an option. Neither was completing another third-party review or building the integrations in-house. By keeping the agent within Persona, Parafin could increase review capacity without adding those security and implementation burdens.
By using Persona for both identity verification and case review, we didn’t have to worry about data leaving the walled garden that is Persona. That made it much easier to demonstrate how we controlled our data and get approval from our bank partners.
Decisions calibrated to Parafin’s judgment for confident adoption
Before launching the agent, Parafin wanted to be sure that the agent’s decisions were aligned with the team’s judgement. In early June, Parafin began running the agent on previous cases and comparing the agent’s decisions with the team’s. Although the initial evaluation found 95% to 97% decision alignment, Parafin wanted to improve that further.
To finetune the agent, Persona’s team reviewed the cases where the agent and human analysts disagreed. Many involved additional documents that Parafin had collected through an external channel after the case had entered review. When considering only the evidence originally available, the agent’s recommendations were reasonable. Accounting for that additional context brought the adjusted agreement rate to about 99%.
Next, Parafin deployed the agent in phases so the team could build confidence in its actions while maintaining control over its decisions. The team initially used the agent in recommendation mode, while Parafin’s analysts made all final decisions. Then, the team compared the agent’s recommendations with analyst decisions. Parafin also retrospectively reviewed a separate sample of cases assessed only by the agent to evaluate decision quality beyond agreement rates alone. By combining live comparison and human review, Parafin validated the agent’s performance and was assured of its accuracy.
We worked closely with Persona's Case Review agent to test it and make sure its decisions aligned with ours. When its decisions became very consistent, we told the team, 'You don't have to do the KYC review yourself. We're confident this agent's decisions will agree with yours.
Flexible controls tailored to each risk profile
Finally, Parafin can customize precisely how the agent makes decisions, depending on the product and risk. For example, the agent is configured to automatically approve KYC manual review for low-risk capital products. Larger loans require human approval, so the agent analyzes the data and information associated with the small business and provides a recommendation (but not a decision).
The result has been faster reviews across both financial products. Median KYC manual review approval fell from about 18 hours to under one hour for merchant cash advances; most cases receive a decision within minutes. For capital products in recommendation mode, approval time fell from about 18 hours to four. Now Parafin’s analysts can stay focused on cases that actually do need additional investigation, like declines, sanction hits, and other complex decisions.
It was easy to set up clear guardrails for Persona’s Case Review Agent to automatically approve cases or simply recommend decisions. These rules give Parafin assurance we are balancing accuracy with efficiency.
Results: Faster funding and greater capacity to scale
Today, Parafin is processing more applications than before while maintaining accuracy, all without increasing headcount. Parafin’s customers have noticed the difference: merchants are accessing financing faster, and partners have observed shorter decision times.
Providing timely decisions is critical for all of our partners. After we switched to Persona’s Case Review Agent, our partners saw KYC approval times improve drastically.
After introducing the agent, application volume requiring manual KYC or KYB review fell to below 3%. The time saved using Case Review Agents has also enabled Parafin to focus more on high-level operations, like complex fraud investigations, high-dollar reviews, unusual exceptions, and strategic projects to improve efficiency.
With Persona’s Case Review Agent handling routine reviews, our compliance team can now work on higher-leverage projects that help the business grow and ship faster.
The additional capacity has enabled Parafin to execute on its roadmap faster with its existing team. For example, when one of Parafin’s largest platform partners wanted to introduce a product that would require KYC for every merchant, Parafin was able to absorb the increased volume without hiring. The results give Parafin confidence that its long-term partnership with Persona will help it meet new challenges as the business grows.
