Regtech ComplyAdvantage to strengthen its reach in Asia Pacific

• ComplyAdvantage uses a data-driven approach using AI to identify risk events in real time
• It operates in 45 countries with 400 customers and has grown an annual recurring revenue by 300%
• The company recently set up its regional office in Singapore to strengthen its presence in the Asia-Pacific (APAC) region and partner with more institutions

Growth in digital transactions and new collaborations of financial institutions towards ecosystem services has resulted in considerable real-time movement of money across multiple organisations. Monitoring transactions in this evolving scenario and managing regulatory compliance is becoming a key challenge for institutions, especially in the Asia Pacific region with its rapid fintech boom.

Regulatory technology companies (regtech) operate in this niche segment, leveraging the power of emerging technologies to monetise value from data. ComplyAdvantage, a UK-based regtech company, offers artificial intelligence (AI)-based solution to enable institutions to meet the regulations for anti-money laundering (AML) and counter financing of terrorism (CFT).

Adoption of AI-based real time analysis of transactions

Institutions worldwide battle with thousands of ‘false positives’ that impair their ability to stop financial crimes. They need to swiftly upgrade their IT infrastructure and data analysis capability to meet compliance. But for institutions with legacy infrastructure, this can be time consuming and expensive, especially with evolving regulatory directives which are becoming more stringent. In APAC, several regulators such as the Hong Kong Monetary Authority, Japan’s Financial Service Agency and People’s Bank of China have recently come out with updated AML/CFT guidelines. The risk in not doing so is not just heavy penalties but also reputational damage.

“Value and money move around using phone with speed and in real time. Institutions have to deal with fast paced, higher volume of transactions within a more stringent regulatory framework. And they need to be able to identify suspicious transactions in real time,” pointed out Charles Delingpole, founder and CEO of ComplyAdvantage, while explaining the current challenges faced by other companies.

“The previous response of institutions was to add more headcount to track and monitor these transactions in order to keep up with the demand of business, but we believe a lot of this can be solved with technology and adequate technology,” added Delingpole.

The company adopts a data-driven approach that identifies tens of thousands of risk events each day by analysing millions of structured and unstructured data points leveraging artificial intelligence.

“Our solution enables institutions to identify bad actors in real time at the time of customer onboarding. Furthermore, institutions can spot suspicious behavior on a wholesale level across all their clients’ transactions on a real-time level to take action immediately,” explained Jaede Tan, head of Asia Pacific, ComplyAdvantage.

The company offers configurable cloud-based services. Tan added that the key strengths of the solution are flexibility and the ability to customise quickly to meet the specific needs of a bank.

A serial entrepreneur, Charles Delingpole started ComplyAdvantage five years ago with just 10 persons in a garage. Today, it has over 200 employees including about 150 in technology. Since July 2018, the company has grown its Annual Recurring Revenue by 300% and serves 400 customers across 45 countries at present.

ComplyAdvantage, so far, has raised a total funding of $37 million, including $30 million raised in Series B funding in January 2019, which was led by Index Ventures and Balderton Capital.

Unique challenges and opportunities found in the Asia-Pacific region

ComplyAdvantage recently opened its new office in Singapore, marking its first foray into the Asia-Pacific region. The other offices are located in the United Kingdom, United States and Romania.

“We chose Singapore for a number of reasons, including its proximity to the rest of the region that will enable us to serve it better. We are looking to grow from here to partner with more institutions in managing their financial crime challenges, and to have more ears on the ground and take their feedback,” explained Tan.

The new office will further strengthen the company’s presence in the Asia-Pacific region and enable it to better serve its clientele in Asia, some of which include Singapore Life, Quoine, Munich Re, Metlife, Big Pay and AirWallex.

 “The nature of business and movement of funds in Asia is highly cross border. First, money moves very quickly across multiple jurisdictions, so institutions need to spot the suspicious behaviors quickly. Second, large populated countries like China, India, and Indonesia have a large percentage of unbanked population which are rapidly adopting digital payments. The financial institutions therefore have the responsibility to spot, track and monitor suspicious transactions at a scale never seen before,” shared Tan.