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risk management solutions, compliance solution, kyc verification - KYC Portal CLM
How much can you get done in seven minutes? It is about the time it takes for the average person to fall asleep and the time it takes to empty the dishwasher.
 
But for Kristoff Zammit Ciantar seven minutes could change his life – and that of his team at KYC Portal.
In a few weeks’ time he will be standing up in front of 1,500 delegates from banks and financial service providers at Finovate Europe in London, hoping to entice them to find out more about KYC Portal.
 
Until a few years ago, the term “KYC” – know your customer – was hardly ever heard, but with anti-money laundering laws tightening up, it has become one of the biggest headaches for anyone dealing with transactions, from banks and e-gaming companies to insurance companies and real estate agents.
 
Mr Zammit Ciantar estimates that compliance efforts are going up by 18 per cent every year, but most companies have been throwing people at the problem as it evolves, resulting in a disjointed, hodge podge of systems which do not correlate their data – and which do little to help either the customer faced with long delays in opening accounts and making transactions, or the staff trying to detect red flags.
 
“We started working on KYCP last year, after clients told us about the problems they were having,” he said.
 
“When clients ask for a solution it is either because what there is on the market is very expensive or because there is nothing available. And we found that it was the latter. So we started focusing on the product we were already working on and clients’ reaction was fantastic.”
 
Aqubix set up a separate team to work on it, drawing on expertise from their offices in Spain and Poland, and KYCP started to take shape.
 
It was not long before clients outside Malta started to take notice, and a client in Gibraltar suggested that KYC Portal should try to get into Finovate, something which is notoriously difficult to do.
 
“At that time, KYCP was under 90 per cent done, although we already had quite a few orders from banks, insurance firms, legal firms and audit firms. But the reaction of this client in Gibraltar encouraged us to contact clients abroad and we found it was as unique overseas as it was here. It was described to us as the ‘Rolls Royce’ of compliance.”
 
Finovate is the largest showcase of innovative technology for the fintech industry. Mr Zammit Ciantar thought there was nothing to lose – seeing it as the opportunity to gauge interest.
 
“What can I say?” he grinned. “We got chosen!”
 
KYCP has three unique features which contributed to the decision, which makes its approach much more holistic and automates the risk-assessment process.The first is its ability to create organigrams – showing the complex relationships across entities –of, say, 200 links in just 10 seconds.
 
“This is something that banks have teams of people to design,” he said.
 
The second feature – which is unique not only in fintech but also across the technological world – is the ability to interview your subjects through the system, recording the interview in real time within the system, and with facial recognition.
 
“At present, most of these interviews have to be conducted in person – which is not always easy and could be quite costly. However, the anti-money laundering directive for 2017 onwards considered the technology as equivalent to meeting the person face-to-face, he said, which was a huge benefit for organisations.
 
“Now, as you are actually conducting the interview, the system – which we built from scratch – verifies the identity of the person. We are only the fourth company worldwide to create this technology. Facebook was the first but it has not released the system for commercial use. Two others have a system but they do not offer the recording.
 
“It is raising a lot of hype; in fact, we are thinking of releasing it as a separate product in the coming year.”The third innovation is that compliance is usually done at jurisdiction level, but companies that operate across borders can use KYCP’s ‘global dashboard’, which enables the head office to monitor activity across these different jurisdictions – in real time.
 
“The dashboard links up the different KYCPs and detects fraudulent activities by identifying patterns or trends across the different users in the organigram that would otherwise have been missed. Say, it would notice that an amount was deducted from one company and the same amount was deposited in another by someone else.
 
“It also applies facial recognition across jurisdictions, which means that if someone is using a false passport or has a record of some sort, it would flag this,” he said, admitting that all this has tremendous potential for law-enforcement agencies, passport and immigration departments and even i-gaming companies.
 
“We have been caught off guard since November as the reaction was much quicker and wider than we thought. Now it is interesting to see where it could lead…”
 
Holistic automation has all sorts of benefits. Take, for example, a jurisdiction which goes sour due to a political change. Not only can the system be easily customised for the new risk parameters but it will also flag all the clients or transactions which were previously compliant but no longer are.
 
“Until now, this would have to be done manually by compliance officers. Imagine what peace of mind this would give – as long as you feed in the information.”
 
Since the news of its presence at Finovate broke, interest has accelerated. Kristoff is already having talks with Gartner, which heard about the product and think that KYCP could find a place on its risk advisory aspect, and other companies.
The product was designed to be configurable for all jurisdictions and industries – and can be updated if and when regulations change.
 
“This was key to the success of the product. If we created a product for the Maltese jurisdiction, we would have really limited our market. We wanted to create something that was incredibly flexible which gives the client the full remit of what they need to do.“It has been planned in a way that we can increase customer support to cope with whatever customer base we have. The biggest challenge was technical; we wanted to have a product that we could scale up to 1,000 clients, from a law firm with a few clients, to a bank which handles thousands a day.”
 
The company is already marketing KYCP in Spain and will start in Poland in August, once the product has been translated.
One important aspect was to get the business model right and Aqubix has opted for a reasonable price – Mr Zammit Ciantar is convinced that they could charge much more had they wanted to – which will give them sufficient profit margins but allowing a hefty share for marketing and for research and development. And for smaller companies, they are offering a pay-per-use more basic model which will be much more cost-effective.
 
“I prefer to have clients who are happy and who then keep coming back to us for additional services,” he said, shaking his head.
But right now, business models are the furthest thing from his mind. Mr Zammit Ciantar is thoroughly focused on those seven minutes at the moment.
 
Link to Business Observer
 
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