Regtech, which refers to the use of technology to help financial services firms deal with regulation, is one of the fastest-growing fintech segments. KPMG forecasts that regtech spending by 2022 will reach US$76 billion from only US$10.6 billion in 2017.
According to XAnge, a Franco-German venture capital firm, Europe is home to about 140 regtech startups. 30% of those startups specialize in compliance management, 27% focus on know your customer (KYC) and anti-money laundering (AML) automation, and 26% leverage technology and data to provide risk management tools.
To keep up with this rapidly growing community, we look today at ten of Europe’s most successful regtech startups. These serve some of the world’s largest financial institutions and fintechs, and have attracted the interest of notable investors.
Onfido (London, UK)
Founded in 2012 by three former students at Oxford University, Onfido is an award-winning software company that helps businesses verify people’s identities using a photo-based identity document, a selfie and artificial intelligence (AI) algorithms.
Onfido provides identity verification through its online platform. The company uses manual and automated machine learning (ML) technologies, including optical character recognition and face detection, to compare and cross-reference a person’s facial biometrics with their identity document to prevent fraud.
Onfido powers over 1,500 fintech, banking and marketplace clients globally, including Revolut, Remitly, and Bitstamp.
The company has raised £180 million in funding. It is headquartered in London and has more than 400 employees in offices across San Francisco, New York, Lisbon, Paris, New Delhi and Singapore.
ComplyAdvantage (London, UK)
Founded in 2014 and headquartered in London, ComplyAdvantage is an award-winning regtech company that uses AI and ML to help firms manage compliance obligations. The company provides data intelligence to help firms understand the risk of who they’re doing business with, while automating compliance and risk processes.
ComplyAdvantage works with over 500 enterprise clients across 75 countries, including Earthport, a publicly-listed payments company, Azimo, an international money transfer services provider, and Lemon Way, a pan-European payments institution.
The company is backed by notable investors including Index Ventures and Balderton Capital, and has four global hubs in London, New York, Cluj-Napoca and Singapore.
Quantexa (London, UK)
Founded in 2016 and headquartered in London, Quantexa is an enterprise intelligence company which enables organizations to make better decisions from their data. Using the latest advancements in big data and AI, Quantexa uncovers hidden customer connections and behaviors to solve major challenges in financial crime, customer insight and data analytics.
Quantexa is led by a team of experts in advanced analytics and data focused solutions, and operates globally with offices in London, New York, Boston, Canada, Belgium and Sydney.
Quantexa boasts a range of high profile clients including HSBC and Standard Chartered.
NorthRow (Abingdon, UK)
Launched in 2011, NorthRow (formerly Contego) is a regtech company helping regulated firms remove manual processes to improve operational efficiency and customer experience, whilst reducing compliance risk.
NorthRow delivers a unique combination of automated and managed identity verification (IDV) and know your customer (KYC) checks via a single API, helping to make onboarding as frictionless as possible and helping to meet anti-money laundering (AML) and other compliance requirements, including client suitability and appropriateness under MiFID II. NorthRow also offers a fully managed service when enhanced due diligence is required.
Encompass (Glasgow, UK)
Founded in 2012, Encompass has created an innovative KYC automation software that enables better, faster commercial decisions.
The software robotically searches structured and unstructured information sources to automate KYC, AML and EDD policies. Key elements including UBOs, PEPs, sanctions and adverse media are all identified, visualized and verified in seconds.
Encompass has raised £6.2 million in funding and serves major financial and professional service firms globally, including Santander, IHS Markit and Murgitroyd.
Fenergo (Dublin, Ireland)
Founded in 2009 and headquartered in Dublin, Ireland, Fenergo is a provider of client onboarding lifecycle management software for corporate, investment and private banks.
Fenergo’s onboarding technologies span front and middle office operations to provide banking clients with an end-to-end client lifecycle management solution that includes compliance and banking process management such as onboarding compliance, legal entity data management, product onboarding, collateral management, client servicing, and credit mitigants and collateral management.
The company has raised more than US$120 million in funding, the latest round being a US$80 million venture round in February 2020 at a US$800 million valuation. Fenergo serves clients that include BNP Paribas, Bank of China, Scotiabank, BNY Mellon, BBVA and UBS.
Corlytics (Dublin, Ireland)
Founded in 2013 and headquartered in Dublin, Corlytics is a regulatory risk intelligence company that works with global regulators, financial institutions and their advisors to provide data and analytics to inform future risk management.
Corlytics uses analytics to assess the impact of each piece of regulation. It breaks each enforcement action into 160 different data points to allow machine readable insights and comparisons across regulators. Its services include regulatory monitoring, taxonomy mapping and regulatory advisory services.
Corlytics has raised EUR 24 million in funding and has received numerous awards and accolades.
DataGuard (Munich, Germany)
Founded in 2017 and headquartered in Munich, DataGuard is a privacy and compliance software-as-a-service company.
DataGuard’s “privacy-as-a-service” solution enables more than 1,000 customers ranging from small and medium-sized businesses (SMBs) to multinational enterprises, to become and remain compliant with national and international privacy regulation.
Via its proprietary software platform, DataGuard audits customers’ personal data flows, creates process documentation, processes and documents data breaches, third party audits and data subject requests, and trains customers’ workforces.
DataGuard operates across a broad range of industry verticals such as industrials, technology, professional services, healthcare, finance, and government.
Apiax (Zurich, Switzerland)
Founded in 2017, Apiax is an award-winning Swiss regtech startup that builds and offers tools transforming complex written financial regulations into binary, machine-readable digital compliance rules. The rules, which are constantly up-to-date and verified, are consumable via an app or can be integrated directly into banking processes through an easy-to-use API.
Apiax has raised US$8.1 million in funding, the latest round being its US$6.6 million Series A in October 2019. The company’s team is comprised of legal, technology, and product experts. It has offices in Zurich, Lisbon, and London.
NetGuardians (Yverdon-les-Bains, Switzerland)
Established in 2007, NetGuardians is an award-winning Swiss regtech startup that has developed an AI solution for banks to proactively prevent fraud.
NetGuardians’ fraud-mitigation software uses the latest technology, including ML, big data, and user-behavior analytics to prevent fraud in real time across a number of banking areas. The software monitors all activities and transactions and raise an alert for any suspicious activity.
NetGuardians serves over 50 Tier 1 to Tier 3 banks worldwide, including Aargauische Kantonalbank, HFC Bank Ghana, and Acleda Bank.
Besides Switzerland, the company has offices in Poland, Kenya and Singapore.