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Regtech MAs and investments under the microscope – Part 2 - Americas and Asia

Afteraddressing the key factors influencing the growth of the regtech market (accelerated digital transformation, regulation, compliance, cutting costs) and presenting some European major investments and acquisitions in this space, let’s continue our regtech M&A with Americas and Asia.

An increasingly complex regulatory environment, the rising number of fraudulent activities, the increasing need for risk and compliance management, the need for faster transactions have created the need to find more efficient ways to comply, thus driving the rise of the regtech industry.

Due to digitalisation, use of smartphones, internet availability, financial services have become a rapidly changing environment, with tons of data constantly being created, generating new business models that address the demands of consumers.

Innovative solutions happening via the cloud - data sharing, near real-time checks, or dedicated tools for various touch points of compliance like customer onboarding and new business relationships –

Americas At the end of 2020, Nasdaq decided to buy Verafin, a fraud detection technology, and anti-money laundering software company based in Canada, in a cash deal worth USD 2.75 billion.

Furthermore, benefiting from FIs investing in fincrime technology to comply with regulations, Verafin has delivered a compound annual revenue growth rate of approximately 30% over the last three years and expects to deliver more than USD 140 million in revenue in 2021.

Passcon offers managed services, advisory, and technology solutions across the anti-financial crime spectrum, worldwide, with a team of 300 members and more than 10 offices across EMEA, APAC, and North America.

With more than 100 employees and growing, six-year-old Ottawa fintech firm, MindBridge continues to build its customer network, due to its artificial intelligence platform that can quickly scan financial documents to detect anomalies, helping auditors do their jobs more efficiently.

Furthermore, in 2021, the company has increased its transaction monitoring capabilities, to help financial institutions build a complete identity profile that encompasses the entire customer lifecycle, and has rebranded to focus on helping clients ‘know the unknown’.

Not necessarily a pure regtech company, Feedzai develops AI and machine learning technology that helps banks and other financial firms to spot and prevent payments fraud, money laundering, and other types of illicit activities.

In Latin America, in March 2021, tax software providerSovos acquired Fit Sistemas, a Brazilian provider of cloud-based regulatory reporting and electronic invoicing solutions to leverage its reporting capabilities and cloud building blocks across the region.

That is why no wonder identity verification startup, Trulioo, Canada-based, raised USD 394 million in a funding round led by venture capital firm TCV and was also backed by existing investors Blumberg Capital, Mouro Capital, and the venture-capital arms of Citigroup and American Express.

In Singapore, MAS noted an upward trend of suspicious virtual asset transaction reports lodged with law enforcement, including transactions relating to scams, fraud, cybersecurity-related offences, and darknet marketplaces.

Silent Eight, a Singapore-based technology company leveraging AI to create custom compliance models, completed a new round of early-stage fundingled by OTB Ventures, the largest dedicated VC firm investing in technology businesses originating from Central and Eastern Europe, bringing the company’s total capital raised to USD 15 million.

WeChat AMA Recap - 15th July 2021

Last Thursday, July 15,  we held an AMA on our WeChat channel with Jonathan Camilleri Bowman – Project Visionary of Sekuritance for our Chinese community to ask questions regarding Sekuritance’s product suite and plans.  We would like to thank everyone who joined us and for sending out some questions.

Putting it simply – if any piece of software or service solves a regulatory issue (like a compliance check or a politically exposed person check, etc., they form part of a RegTech solution – which is a very vast term and has loads of uses) Anything offering a solution to understand, minimize, and report on a risk factor in the business is encapsulated in a risk tech suite – and similar for transactions – an online bank app would be part of a fintech suite.

If we compare with a lot of tokens on the top 10-50 on CMC and other listings, the reality is that most have little or no use as a token at all – and some don’t even have a product launched in the space at all – they have an idea – a vision – a maybe-prototype – and that is the sad reality – they are selling dreams/speculation.

Ironically in the market, one of our most used products in this space is our KYC and onboarding module but that represents 15% of our product offering, with several others being more intense and technically consuming – we have PCI data vaults for storing secure data, Business onboarding automation – transaction monitoring and new products analyzing various blockchains being able to determine high risk or fraudulent addresses – and so much more.

That is only a snapshot – over and above – our new User Interface, which will also be Wallet-integrated has balance and utilization of our tokens on the network, allowing partners to integrate their solutions and, most importantly – allowing small to medium businesses to utilize our services on a need basis at their own will without complicated setups, etc.

We are focusing on our UI functionality and have a solid roadmap to bring to our users – mainly around not having to go through the same laborious KYC each and every time – sometimes 2-4 times a week and give more control back to the users in terms of where their data is going and how it is checked and by whom.

The market is an unpredictable beast and in our, opinion many factors influence its direction – some depending on sentiment, analytical and charting, and we also have the added phenomena of an influential character in the world who seems to have a lot of weight in moving that sentiment in different directions – not to mention all the regulatory challenges and conflicting information coming out of varying countries – so on pricing, etc.

So in addition to answer your question on how can we beat the bear – we see past market pricing and only look at our solutions, mass audience adoption, and more – we have been very fortunate to hit the ground running and are one of the few crypto projects that from Day 1 (actually earlier) of launching our token – we are in revenue earning state – we keep onboarding new launchpads, new tokens, new clients and new strategic partners – and we are confident that with the roadmap we have and what we are delivering to the market we have what it takes to weather this sentiment storm and everyone that backs us now will be reaping the benefits in the months and years to come – over and above.

We are not a one-hit-wonder company – our roadmap is solid – we are delivering new solutions to the market as we go along – have a lot of interested parties – and one thing we are looking at is how to onboard mass adoption quicker as opposed to single clients every week to gain more and more traction – we have several go-to-market avenues to explore, and that is exactly what we are doing – we believe heavily in community support and new leads introduction and compensate such activities heavily.

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