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10 RegTech Companies Making Waves in the Industry

  • 22 February 2018
  • Guarav Sharma

The World Bank estimates that almost 8% of the Gross National Product of advanced economies is spent on regulatory compliance. For less developed countries, this percentage is even higher. Given the size of the global economy, we can assume that over $10 trillion is spent annually on regulatory compliance!

To be fair, some of these costs just cannot be avoided. For example, banks are required to keep a certain amount of capital stored in “liquid” and low-return assets. Similarly, manufacturers have to spend some money on environmental compliance and other safeguards. However, there is still an enormous potential for greater efficiency in compliance which can save billions of dollars.

This is where RegTech comes in. RegTech is a catch-all phrase which covers innovators and pioneers in the regulatory technology space – especially in the financial services sector. The financial sector has always been an early adopter of technologies, something which is necessitated by its need for transactional accuracy, speed and large volume. The last financial crisis put an even greater emphasis on financial sector regulation and it is against this backdrop of soaring regulatory costs and FinTech innovation that RegTech has started to gain popularity. Here, we look at some of the most innovative and promising RegTech companies in the wrold.


Ayasdi

Founded in the US in 2008, Ayasdi uses machine intelligence to solve a variety of regulatory and compliance-related problems. Their solutions include an intelligent platform for Anti-Money Laundering compliance, countering fraud by automatically creating rules based on evolving data, as well as a Model Accelerator uses unsupervised learning to assist in the creation of financial models to measure risk.

Ayasdi

What makes them special?

The engine that is used by Ayasdi is called Topological Data Analysis (TDA) and its development was funded by DARPA. The engine essentially studies the topology or shape of the data to uncover patterns or relationships between variables.


REGIS-TR

This Luxemburg-based company offers a one-stop shop for reporting all sorts of trade transactions across various asset classes in the European Union. Their platform currently allows for the reporting of derivative trades under EMIR and FinfraG and will also be compatible with upcoming regulations like SFTR (Securities Financing Transactions Regulation) in the EU. REGIS-TR also provides transactional and positional level data access to both the public and relevant regulators.

REGIS-TR

What makes them special?

REGIS-TR wants to create a future where clients would have report their data to only a single entity in order to comply with the regulatory requirements of various agencies across jurisdictions. This will save companies significant resources both in terms of time and money.


encompass

Founded in Australia in 2012, and launched in the UK in 2015, encompass robotically automates information and news discovery for Know Your Customer (KYC) requirements for onboarding, event-driven refresh and remediation. Earlier in 2018, encompass launched operations in Hong Kong.

encompass

What makes them special?

KYC failures lead to billions of dollars’ worth of fines being imposed on banking institutions as well as numerous delays in new account opening and processing. Anything that speeds up this process, while still allowing for complete compliance with regulatory guidelines, would be vastly beneficial to the financial services sector.

Video: An Overview of Encompass KYC Software – encompasscorporation.com


Signzy

This three-year-old Indian start-up provides cloud-based real-time authentication for transactions using Artificial Intelligence. The platform allows for digital identification and authentication while also providing additional background information to clients.

Mission – Signzy

What makes them special?

Signzy allows for faster KYC (Know Your Customer), AML (Anti-Money Laundering) and CTF (Counter Terrorist Financing) checks along with real-time document verification which means faster delivery of all kinds of banking products to the end customer.


CUBE

This UK based start-up provides an automated approach to regulatory compliance.  CUBE is a pioneer in automated compliance technology and offers clients a cost reduction in terms of labor and data storage while minimizing the risk of fines and penalties.

CUBE

What makes them special?

The CUBE solution taps into the global regulatory space and uses machine learning technology to update this information. It can greatly automate the process of producing and managing compliance policies and procedures.


IdentityMind Global

IdentityMind Global, the leader in Digital Identities You Can Trust, provides a SaaS platform that builds, maintains and analyzes digital identities worldwide, allowing companies to perform identity proofing, risk-based authentication, regulatory identification, and to detect and prevent identity fraud. Built-in transaction monitoring enables e-commerce fraud prevention, anti-money laundering (AML), and counter-terrorism financing (CTF).

IdentityMind Global

What makes them special?

The company claims that their platform can reduce fraud during live transactions and client on-boarding by as much as 60% and 90%, respectively.


Feedzai

Feedzai is an “AI platform to fight financial crime”. It offers banks, merchant acquirers and payment processors protection against transactional fraud. Feedzai offers a customizable risk engine that can work in more complex environments as opposed to other cookie-cutter solutions.

Protecting customers – Feedzai

What makes them special? 

Feedzai is using all the power of AI to fight financial crime and fraud. It uses data science, machine learning, and a flexible architecture to achieve this.


Provenir

Provenir provides risk analytics solutions to banks like HSBC, Wells Fargo and other financial institutions. Their tools can integrate with any data source and allow for optimized risk analysis and decision making. The risk engine can be configured to work with various specialized banking products.

Provenir

What makes them special?

The company’s solution can be implemented across a variety of different products like consumer/ auto loans, credit cards, e-commerce and so on.


Forcepoint

Forcepoint is the cybersecurity division of defense contractor Raytheon. The company has a truly vast array of products covering almost all aspects of digital security, from cloud access, network security, app security, data transfer, web, email, and so on.

Human-centric security – Forcepoint

What makes them special?

The company provides services to various governments, militaries and even certain financial regulators themselves. This essentially places them at the front of the cyber security battle.


Continuity

Continuity is a US-based service provider specializing in providing regulatory compliance services. Their system can automatically monitor the Federal Register and interpret/ deliver any relevant changes as actionable tasks. The company claims that their platform reduces errors and can save as much as 90% of the regulatory staff’s time.

Fresh approach – Continuity

What makes them special?

Continuity provides a Unified Compliance Management System Model which allows for automation and, more importantly, predictability,  which is critical for effective compliance and control.

RegAdvisor Pro – Continuity
About Guarav Sharma

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