Member Spotlight: ComplyAdvantage, Trust in AML/CTF compliance

Tackling financial crime has been an issue that has repeatedly been the subject of media, government and public attention in the wake of the Banking Royal Commission, and Westpac’s  subsequent 23 million breaches of the AML/CTF Act. 

Some of the worst atrocities on Earth—terrorism, human trafficking and sexual exploitation— are funded by financial crime. Financial crime can only be eliminated when financial institutions have the data and technology necessary to flag and revoke criminals’ access to the financial system. At its core, until organizations have access to a robust and comprehensive database of external risk indicators, technology can only go so far. Significant steps have been taken on the technology side to stop financial crime where it has not been solved anywhere before – but the problem the industry faces remains a significant one for companies like ComplyAdvantage to fix.

 

Companies across the world spend billions to understand the risk of doing business with their customers and other third-parties, whilst complying with sanctions and AML regulations. Legacy software solutions, generally speaking, are too expensive and inflexible to accommodate the agile business models of fintechs and the risks they face today.

Eliminating financial crime is difficult,requires an in-depth understanding of data systems and technology, and can place immense burden on compliance teams. For this edition of FinTech Australia’s Member Spotlight, we spoke to  from ComplyAdvantage about how they are helping their fintech and neobank clients stamp out financial crime, while turning their AML/CTF compliance obligations into a competitive advantage.. “We’ve taken a radically different approach to data intelligence through automated data accumulation and refinement to provide immediate insight into the risk of the person or company you’re dealing with, says Jaede Tan, Managing Director Asia-Pacific. “We have built a suite of plug-and-play configurable cloud services to fit seamlessly into fintech’s workflows and tech stacks. Ultimately this boils down to reduced manual workload, e.g. typically reducing false positives by over 80% along with allowing faster remediation, investigation and straight-through processing. Overall, we’re providing configurable  compliance solutions customised to the needs of fintechs, neobanks and payments companies that allow them to adapt to risks without relying on oversized teams at added expense.”

There is an intimate level of trust between ComplyAdvantage and their clients, explains Mr. Tan. “If our technology does not detect and alert their teams, financial crime will continue to weave its way through the system. We take this responsibility seriously.” Here, one of the largest challenges that ComplyAdvantage has experienced is scaling their business while still being able to adapt to changes in the market. “We’ve seen drastic change in the fintech industry in the last 5 years, particularly around the regulatory landscape our clients operate in. Focus from regulators on AML/CTF continues to increase, and regulatory divergence in serving 75+ countries has proposed good challenges to our products’ abilities to adapt for each market. At the same time, our Australian clients’ end users are savvy: they want instant transactions and service from their fintechs. For fintechs, this creates friction in their user experience with competing demands from regulators and consumers. But it doesn’t have to be that way: by adapting our technology and developing our products accordingly, we’re able to remove the friction around AML/CTF compliance and turn it into a competitive advantage for our clients.”

Perhaps most notably, ComplyAdvantage was selected by the World Economic Forum as a Technology Pioneer to contribute to Forum initiatives over the next two years, working with policymakers and private sector leaders to help define the global agenda on key issues around financial crime. “Our Series C funding will alter our trajectory as we accelerate the development of our industry-leading data and technology to detect and mitigate complex risk exposure in the financial industry across the globe,” says Mr. Tan.

ComplyAdvantage’s effort has paid off, with the company recently raising US$50 million in a Series C raise. “This year has brought tremendous growth for the company. Q2 represented our highest quarterly revenue to date. We have enjoyed a wave of external recognition highlighting our progress, exhibited recently by our inclusion in CB Insights’ AI 100 list, our recognition as Celent’s Advanced Technology Award in their KYC Solutions report and our ranking by the Financial Times as the 6th fastest growing fintech in Europe.,” says Mr. Tan. 

Mr. Tan’s biggest tip for international fintechs entering Australia is to recognise that the market is unique. “Fintechs here are among the savviest in the world, and the community is a close knit one. You have to invest time and resources to do it properly. For Australian fintechs that are looking to branch out into international markets, it’s important to have open relationships with the respective regulator in whatever market you’re entering. AUSTRAC and other government organizations like Austrade have deep experience and insight as well as various initiatives overseas to assist Australian fintechs with their international expansion.”

As for fintechs that are looking to secure funding? “Find investors who believe in your products and believe in the long term growth and roadmap of your company. We looked for investors that take a long view of investing and are genuinely aligned with our vision and purpose”, explains Mr. Tan.

“As a company with an ambitious mission and vision we knew from the beginning that we needed genuine individuals with the ability to see the impact our solutions could have on the reduction of global financial crime.”