Dive into the multifaceted landscape of the finance sector beyond AI-driven solutions. Explore prevailing trends and challenges shaping the industry’s trajectory today.
Greetings Vatsa! We’re delighted to have you here. Could you please share with us your professional journey and how you came to be the CEO of ComplyAdvantage?
Thank you for your interest in ComplyAdvantage. I’ve been with the company for a little over four years, beginning as chief operating officer and financial officer, before taking on the CEO role in 2022. Before that, I was president and CEO of OANDA, a foreign exchange firm, so I have a deep, personal history with the payments industry, in general, and the use of data to drive business insights, in particular.
I joined ComplyAdvantage because I’m so passionate about our mission. Today, we help more than 1,000 companies worldwide manage their risk exposure by empowering them with the intelligence they need to decide who to do business with. Financial crime is a multi-trillion-dollar problem that affects entities and individuals across the globe, so knowing whether an entity is sanctioned or does business with someone who is, for example, is incredibly important, as this increases the risk of being fined for compliance violations.
What factors led to ComplyAdvantage’s decision to acquire Golden, and what made Golden such an attractive prospect?
Golden has been automating the construction of one of the world’s largest knowledge graphs, which shows interconnected data points and their relationships to analyze complex information. Financial crime is fundamentally a network problem requiring firms to identify connected risk signals. So, the ability to glean additional intelligence from various sources is crucial in developing the most robust product in the market.
Sophisticated AI is also critical to the success of this work, and the Golden team’s extensive experience using large language models to extract insights from large datasets will augment our current capabilities. Their data and engineering teams aligned well with our current organizational structure, making the merger seamless.
Finally, with Golden being a leading innovator headquartered in San Francisco, the acquisition will also help us accelerate our organic growth, particularly in the United States.
Following the recent acquisition, what implications does this have for ComplyAdvantage’s existing customers?
By acquiring Golden, we are accelerating our AI capabilities in large language modeling. This will help us provide our clients with even greater insights and help them more effectively manage their risk. The Golden team’s world-class experience building a knowledge graph to help regulated entities manage risk exposure will also advance our engineering and product teams’ graph work.
As a CEO, what strategies do you employ to effectively integrate teams and foster collaboration following an acquisition like the one with Golden?
Times of transition following events like an acquisition are exciting, but they can also cause team anxiety. It’s essential that leadership is open and honest with employees and provides opportunities to answer questions and address concerns. At ComplyAdvantage, we host town halls every two weeks for all employees to hear about company news, spotlight product developments and highlight wins. Our town halls include an “ask me anything” segment to allow everyone to ask questions in an open forum. It has helped me just as much as it hopefully helped the ComplyAdvantage team.
How is artificial intelligence currently being utilized to combat money laundering and other financial crimes in today’s landscape?
As artificial intelligence capabilities expand, we can find new use cases to solve entrenched problems in the compliance industry. AI is increasingly deployed in customer onboarding, adverse media and sanctions screening, transaction monitoring, and automated reporting to regulators. AI-based solutions can offer massive efficiencies and make the fight against financial crime more effective by reducing false positives, enriching customer data and identifying new risks.
Besides AI-driven solutions, what are some other prevailing trends and challenges that you observe within the finance sector today?
Just as new technologies are being used to revolutionize how people interact with their banks and make payments, bad actors also exploit them to commit financial crimes. Companies like ours aren’t the only ones innovating with AI — criminals are, too. Criminals are deploying AI to perpetrate fraud, launch attacks against individuals and corporations, and gain access to the international financial system. They can perpetrate further crimes using AI-enabled data poisoning, snake oil, burglar bots, online eviction, market bombing, tricking fake recognition and forgery. Once criminals have found an application for AI, it can be shared, repeated and sold, creating a new model for “Crime as a Service.”
However, overall, I remain optimistic. The positive benefits of AI-driven innovation far outweigh the negatives. It’s our job as leaders in this industry to innovate and deliver new products to our customers faster than the criminals our customers work to stop every day.
Given these challenges, what impact do you believe they have on the role of risk and compliance officers within financial institutions?
Risk and compliance teams are responsible for their organization’s compliance with an array of evolving, complex regulations that differ across jurisdictions. Regulations also typically focus on outcomes rather than prescriptive guidance on what compliance activities should look like. Core compliance obligations must also be considered in light of a company’s wider business and customer experience objectives.
In short, they are trying to balance goals that sometimes conflict. That is why, in addition to accelerating our tech innovation through the Golden acquisition, we take our implementation, customer support and regulatory affairs functions so seriously. Alongside market-leading technology, we also aim to provide best-in-class guidance and consultancy to help our customers meet their objectives.
Can you share any specific examples of how ComplyAdvantage’s technology has helped financial institutions navigate and address regulatory challenges in recent times?
In the last year, we’ve onboarded more than 300 new customers, covering a variety of verticals from banks, payment providers, real estate and law firms, and many more. We help them all manage one of the biggest regulatory challenges: ensuring that the person or entity is safe to do business with. We help them do this by providing a flexible Know Your Customer (KYC) solution that continuously monitors global sanctions and watchlists, helping our clients remain compliant even when they operate across multiple jurisdictions.
One specific challenge we’ve helped clients navigate over the last two years has been the vast, rapidly changing sanctions imposed on Russia following the invasion of Ukraine. We update our proprietary sanctions data in near real time, which has been critical to ensuring our clients are not unintentionally enabling sanctioned entities to send or receive money.
What advice would you offer to professionals in the finance industry who are seeking to enhance their organization’s risk and compliance practices?
Improving compliance practices isn’t a question of people or technology — both are critical. Companies of every size need to ensure that their analysts operate efficiently and spend their time on the greatest risks to the business. So, the technology they use needs to meet three key criteria:
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- It must be continuously updated and flexible enough to meet their risk appetite.
- It should be transparent and auditable so that regulator and auditor questions can be answered quickly.
- The alerts raised need to provide insight to help maximize analyst efficiency while minimizing the time needed to resolve the issue.
Finally, looking ahead, what are your thoughts on the future of regulatory technology (RegTech) and its role in shaping the future of compliance and risk management in financial institutions?
Going forward, the key role of RegTech — and the focus of our work at ComplyAdvantage — is in connecting risk signals that may, in isolation, appear weak or unrelated. Our competitors often provide fragmented risk data with static rule libraries. This generates large volumes of vague alerts, resulting in significant manual work. It also misses potential networks of activity that can be uncovered with a more holistic approach that leverages the latest AI-based technologies. I am optimistic that we can rise to this challenge: successfully connecting risk signals and detecting suspicious and illegal activity with today’s tools, talent and technology.
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