Gabrielle Orum Hernández, Legaltech News
This investment in the risk
assessment automation start-up may show growth in using technology to deal with
growing compliance needs.
Photo: Sergey Tryapitsyn/Fotolia
UK-based ComplyAdvantage, a company that uses machine learning to identify
compliance risks, received $8.2 million in funding in a Series A funding round
led by Balderton Capital.
ComplyAdvantage plans to use this investment towards building upon its
distribution of services, with expanded sales, marketing and professional
services across the U.S. and Europe.
The company focuses on managing risk around anti-money laundering policy, customer
on-boarding, and ongoing customer behavior. According to Bloomberg, the company crawls its propriety databases to check potentially risky
clients and behavior against information drawn from regulatory agencies in
various countries, along with individuals sanctioned by the U.S. and the United
Nations.
Stephen Ball, VP of sales and marketing for ComplyAdvantage, explained that
the company uses a combination of AI, big data analytics and machine learning
to identify potential risks, a solution he said is “far more efficient and
effective, and can supercharge the humans involved.”
Tim Bunting, general partner at Balderton Capital, said that the investment
reflects a growing need for technology in regulatory efforts. Bunting added
that the company’s strategy of developing its own proprietary data set to
monitor risk stands apart from others in the field.
"In compliance, we see lots of entrants with a new workflow, or
user-interface tool that is just repackaging the same data. ComplyAdvantage is
doing something different, by developing its own proprietary global data set of
individuals and companies that pose a threat,” he said.
A July report from CB Insights found that legal technology venture capital
investments are down this year, but summer Series A investments in both Notarize and Logikcull may show growth in investments to the industry as the third quarter opens.
Ball noted that lawyers have increasingly expressed interest in finding
ways to use automation and machine learning technology to assist them in
producing a clear audit trail, especially given the increasing complexity of
both regulatory requirements and fraudulent actors.
“I speak to lawyers all the time who are really worried about dealing with
dirty money and complying with AML [anti-money laundering] regulations — some
are so worried about the risks that they are even considering leaving the profession”
Ball said.
He added that “companies struggle to understand where the risk is highest,
e.g. is my customer a politically-exposed person? If so, what is the risk
associated with them? Is my customer in some way engaged with a sanctioned
entity? We help provide better answers to these types of questions and make
decisions faster.”
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