Kompany – Planet Compliance RegTech Interview (2021)

Interview with: Russell E. Perry, CEO and Co-founder at kompany

Let’s start with a brief introduction, what can you tell us about kompany and your RegTech offering?  

kompany provides its business verification services to financial institutions, payment service providers, insurers and other regulated companies around the world, for the purpose of anti-money laundering and regulatory compliance. Our RegTech platform combines technology and data to create a best-in-class experience that goes deeper than your standard entity verification to reveal the real people behind organisations, including those who hold key positions such as officers and shareholders.

Today kompany is proud to be recognised as the first organisation to build a global network of commercial and government registers and to be licensed as an official government clearing house.

Currently, our global network provides real-time access to original company information from commercial registers, financial authorities and tax offices, covering more than 200 countries and jurisdictions around the world.

What are some of the biggest challenges your solutions solve for your clients?

Ultimately, we design our solutions and services with the purpose of helping our clients resolve the complexity of compliance with anti-money laundering regulations. We accomplish this by introducing a three-step approach to their internal structure and processes.

We begin by introducing automation into their existing onboarding process, allowing them to verify and onboard clients more efficiently and effectively using our real-time network of global business information. Next, we ensure that their Know-Your-Business (KYB) processes rely exclusively on audit-proof data. As our network delivers data directly from its primary source, they can be sure that it is fully compliant with the applicable regulations of their jurisdiction and industry. Finally, we replace their internal periodic KYB checks with perpetual KYB.

The end result is an organisation whose processes are based on the most truthful and accurate business verification data available. For our clients, this means 50% costs saving and 90% reduction in the time spent on formally manual tasks such as client onboarding. Our clients benefit from a significantly reduced regulatory risk exposure which can account for 10% of global revenue, which allows them to prioritise competitiveness within their market.

Could you give us a use case of why a client came to you and how they are using your solution to solve their particular challenge?  

At the end of 2017, we had an organisation approach us who had investment funds managing a total of one trillion Euros in regulatory despair. They needed to make significant changes to their soon-to-be outdated manual approach to KYB in order to ensure their own clients could remain compliant with the upcoming regulatory changes. The stakes were high to say the least.

They had a backlog of 10,000 clients (funds) that needed to be reverified and without that reverification, funds would have had to suspend their operations and pause their fund activity indefinitely.  

Within six weeks we had held our first meeting, delivered a service description, held demos, conducting testing, and finalised the contract negotiation before eventually going live. Today they remain one of our largest and strongest partners in Europe.

How would you describe the differences between your offering from others in your RegTech category?

As a platform for business verification, the kompany difference is in the data. Many RegTechs focus on reporting and workflows while we focus on the data at the core of such services.

We are not a database of static business information. Instead, we operate a global register network that provides real-time access to commercial registers, financial authorities and tax offices in more than 200 countries and jurisdictions around the world.

Our platform is built on the foundation of live primary source data because modern compliance requires real-time service.

What advice would you give to decision makers when choosing a RegTech solution such as the ones you offer?

Ask yourself what type of problem you’re trying to solve. Is it AML compliance from a process perspective or from a data perspective? If you’re introducing RegTech to solve your AML compliance and AML data challenges, rethink your process to double your efficiency.  Be sure you’re not simply creating a digital twin of your manual processes. After all, you won’t become more efficient or achieve a higher level of compliance just because it’s zeros and ones.

And of course, the quality of the data you rely on is everything – it is your first line of defense against money laundering. You need to be absolutely certain that you select a RegTech partner whose solutions are supported exclusively with real-time and authoritative company information – otherwise you’ll find yourself relying on a cosmetic level of compliance rather than one that’s truly comprehensive. 

Due to the global pandemic a lot has changed in the world in the last year. How has your company changed in the last 12 months?

As we’re a digital company by design, the transition to work-from-home took place over a matter of hours rather than days or weeks. There were of course challenges to address when it came to engaging with our clients as they are spread across four continents.

Many of the ways we would normally interact with new and existing clients would involve an office visit and in-person conversation. Therefore, we had to quickly establish new rules of engagement and now we accomplish product demos, contract signings and participate in conferences entirely remotely.

The Covid-19 crisis has also increased the demand for kompany’s business verification services as digital compliance solutions are being called on now more than ever, as a result of stay-at-home orders and mandated office closures. As publicly funded business stimulus programs are being leveraged in light of the economic challenges of the pandemic, governments continue to demand that the highest standard of AML due diligence be upheld and enforced.

In the United Kingdom, it’s estimated that of the £43.5 billion lent to struggling companies as part of their Bounce Back Loans Scheme, more than half could be lost to fraudsters. That’s a significant amount of taxpayer money that could potentially be gone forever.

Despite this, there has already been a significant increase in business fraud and supplier/vendor failures due to the increased demand on responsible parties to identify and approve transactions, whether those be emergency funds or Personal Protective Equipment. With such risks in mind, kompany has designed its solutions to resolve these problems by providing direct, real-time access to the primary source where the relevant company information is filed with the government agency.

Can you tell us about some of your most recent achievements or milestones you’ve reached?

Over the past year we’ve been privileged to celebrate many significant achievements at kompany, despite the unique challenges that have arisen in the wake of Covid-19.  Throughout 2020, we grew our team by more than 50% and also welcomed two new investors on board to support our continued growth: Global Brain, one of the largest venture capital firms in Japan and Fairway Asset Management, an independent Swiss Asset Manager based in Zurich, Switzerland.

At the beginning of this year, we also celebrated the commercial launch of UBO discovery, our latest cross-border shareholder identification tool.

What is drives you as a company? What is kompany long term vision?

Our long-term vision is to ensure that as regulations evolve, we continue to expand our products and services to ensure our clients are always achieving the highest standard of anti-money laundering compliance. After all, we believe that effective and efficient access to reliable company data is the cornerstone of a functioning global economy.

Through the combination of technology and data we proud to serve as the first line of defence for anti-money laundering and regulatory compliance while simultaneously empowering our clients to achieve a higher level of competitiveness.

What are some of the important developments you are seeing in the RegTech industry?

At kompany, we’ve observed several key changes over the past several years. To start, RegTech is now recognised as its own industry and is officially out from underneath the umbrella of FinTech. Regulatory technology is now acknowledged as a must-have. The case for integrating regulatory technology now goes beyond serving the needs of the financial industry and has expanded into other critical sectors include healthcare, supply chain, logistics and more.

We also see regulators embracing technology at an increasing pace. Independent regulatory bodies like the Financial Conduct Authority in the United Kingdom have been pushing more and more for financial institutions to introduce RegTech into their compliance programs as a means to remain compliant and combat financial crime more effectively. The Monetary Authority of Singapore has called on the country’s banking industry to utilise RegTech to elevate the culture and standard of regulatory compliance. The momentum that grows the industry will only continue to build as more regulators embrace the optimisations and security RegTech has to offer.  

And at a more granular level, we are witnessing the transition from manual compliance checks to perpetual KYB. As, we’ve seen throughout 2020 the current market and regulatory climate warrants a far more automated, audit-proof business verification process, specifically one with an exponentially lower margin of error.  

More organisations are understanding that periodic, or momentary snapshots of a corporate client leads to data gaps and ever-growing compliance backlogs – vulnerabilities that are avoidable with the right RegTech partner. This is where kompany employs real-time monitoring and alerting of company information. With perpetual KYB services, our clients are capable of detecting compliance risks as they occur, allowing them to stay constantly aware of vulnerabilities rather than waiting for the next pre-scheduled review. We expect more organisations across regulated industries to adopt this approach over time.

What’s next for kompany?

With the most recent additions including the Malaysia and Japan registers, we plan to continue expanding our global register network beyond the 200 countries and jurisdictions we are connected to.

The next natural step will include bringing our real-time capability of entity verification and identity to global payment networks.

What’s the best way for potential clients or investors to get in touch with you?

If you’d like to learn more about our solutions and services you can contact our team of compliance professionals at sales@kompany.com or follow us on LinkedIn to stay up-to-date on the latest kompany news.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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