Charles Delingpole, Founder and CEO at ComplyAdvantage talks to V3 Media about the changing Customer Onboarding experience that financial institutions are adapting to and how the need for faster, seamless digital experiences will push fintech to innovate across facets of a company in this chat:
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Charles, we’d would love to know a little more about you…How has the journey been since starting ComplyAdvantage? Please share a couple of key highlights from the company’s time in-market so far.
I am the founder and CEO of ComplyAdvantage, which is known to be a leading source of AI-driven financial crime risk data and detection technology. I remember the time when ComplyAdvantage first went to market, we were capable of offering complete coverage of sanctions and politically exposed persons. All through these years, as we have grown, we are able to dive deeper into the connections across sanctions, watchlists, politically exposed persons (PEPs), relatives and close associates (RCAs), and adverse media.
Currently, we are operating across four global hubs. We have been able to build key relationships with some of the world’s largest financial institutions and fintechs. Key highlights for me include, but are definitely not limited to, onboarding our very first set of customers, new functionality that incorporates local languages and additional data connections, and not to forget, being honoured as a technology pioneer by the World Economic Forum was such a big achievement for all of us.
Could you tell us some of the near-term plans and innovations you have planned for the platform? How do you see the impact of the COVID-19 creating new demands for enhanced features and capabilities (and what kind) to help financial institutions protect against fraud / crime?
We have been quite ambitious from the start and so is our common goal. We are planning to increase the growth of our industry-leading data and suite of products to serve institutions with diverse clients and complex risk exposure.
As many businesses and bank branches have been closed due to COVID-19, criminals have had the need to change the methods of how they launder funds. Also, various government bailouts and loans have caused an escalation in criminal activity. Financial institutions and fintechs then finally faced their own challenges transitioning to working remotely and working through COVID-19-related sick leave. All of that created more demand for anti-money laundering technology — especially, technology that can adapt with changing environments.
What are the ways where we can see financial crimes evolve in today’s digital marketplace and as the threats are increasingly becoming so common and varied- how do you predict the marketplace for providers focused on wiping out financial crime will shape up?
Criminals are on a continuous hunt for new ways to bypass AML and KYC checks. They will utilize cybercrime, exploit COVID-19-related government relief, recruit money mules, and attack unregulated sectors. That is the reason we can see increasing demands for AML technology that will be able to easily adapt with changing environments. Legacy providers cannot innovate fast enough using their existing tech stack. I would like to think of this as a wakeup-call for both the market and the industry. Two things are likely to happen:
- Financial institutions and fintechs will prioritize innovative vendors over legacy name brands.
- Legacy providers will look towards mergers and acquisitions to compete in the future market.
How do you think has the COVID-19 pandemic impacted the global fintech segment? According to you how will fintech as an industry experience a shift caused by the evolving user trends in this pandemic?
The pandemic has made us focus more and more on the need for a digital-first financial sector. From digital end-to-end onboarding to faster digital transactions, the fintech sector is going to continue pushing the boundaries of technology and customer experience.
COVID-19 has also developed an increased awareness of the risk of doing business. Executives will try their best to make their business model recession-proof, but they are also going to need to look at all of the ways they can minimize risk while growing at impressive rates. For many of them, this means investing in innovative technology to streamline operations, including compliance operations.
What do you consider as the top challenges for fintechs / financial institutions today – also mention your top tips for overcoming them.
- Compliance: While regulators have released COVID-19-related guidance for financial institutions and fintechs, they still want protocols to be followed and proper measures to be taken. Investing in innovative technology along with continual training for evolving risk management is a must.
- Partnerships: Wirecard rocked fintechs around the world when they decided to file for insolvency. While the scandal is quite unique, having caused billions of dollars go missing, it is not a new lesson. Financial institutions and fintechs need to continue assessing their existing partnerships to determine if the vendors are a potential risk to their growth, operations, and regulatory compliance.
- Innovation: With COVID-19 putting a strain on resources for many companies, sandboxes and stealth projects may be put on hold while resources are allocated to money-making activities. Yes, it is important to keep a business growing but it is also very important to look beyond 2020. Keeping innovation alive is a priority even if it is on a smaller scale than before.
What are the top 3 things that come to your mind when it comes to fraud prevention?
Fraud is a predicate offense to money laundering. Where money laundering questions where the money came from, fraud looks at the reality of the money. What works for one financial institution or fintech may not necessarily work for another. In general, three things come to mind:
- A data-agnostic transaction monitoring system that helps institutions to apply rules against suspicious behaviour.
- Cross-training for AML- and fraud-related issues is extremely important.
- When onboarding, and throughout the relationship, screening for fraud-related adverse media at a local and international level.
What are your last-minute thoughts on leading through a crisis…?
COVID-19 has caused such an impact that it has made the world change for forever. It has forced legacy companies to modernize at speed. This naturally resulted in many of them making mistakes Employees have been backed into corners and used forbidden IT solutions to do their jobs. But these issues will be ironed out. Executives and investors are not looking at tomorrow, they are focusing on the long-term future. The world will emerge from COVID-19 with key lessons in communication, adaptability, and resilience.
Thank you, Charles, it was great having you, hope we see you soon at V3 Media again.