Lab Group – Planet Compliance RegTech Interview (2021)

Let start with a brief introduction, what can you tell us about LAB Group and your RegTech offering?  

LAB Group provides streamlined digital customer acquisition, identity verification, and onboarding technology, including a complete suite of regulatory and compliance functions to the financial services industry globally. Our digital customer acquisition and onboarding Software-as-a-Service supports a seamless, secure, and compliant customer journey with continuous improvement through compliance monitoring, advanced analytics and implementations.

Our technology is agile and reliable with our standardisation allowing deployment to all types and tiers of financial services customers.

Our Key Features and benefits include:

Cost Effectiveness

* Quicker realisation of profits due to streamlined operational processes

* Improved return on marketing spend due to greater completion rate of applications

Operational Efficiency

* Straight through processing for digitally signed applications

* Reduced processing times due to built-in information capture and automated workflows specific to each Entity Type

* STP for establishing accounts facilitated via integration with in-house systems

Customer Focus

* Seamless customer experience due to business-specific branding and customisations

* Improved customer relationships via support for partially assisted and fully assisted channels for applications

* Manage customer expectations by keeping the customer informed of application progress via automated notifications

Compliance

* Satisfies compliance regulations mandated by AML, FATCA & CRS

LAB Group has experience processing over 1 million consumer accounts across our customer base with a track record in continuous improvement and we are regulatory focused with robust information security frameworks.

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

LAB Group’s  software assists the entire customer acquisition and onboarding journey for clients customers, from digital acquisition, to customer identity verification, to application management for back end staff and we either work with our customers to develop a customised AML/KYC solution for their application forms and identity verification requirements or offer our out of the box workflows.

The issue for our customers is costly and ineffective compliance with regulatory requirements. This becomes a cost burden and is ongoing due to the constant changes in compliance requirements and with no industry standaradisation each organisation must adopt their own solution and comply with KYC, AML/CTF.  This cost burden is ongoing due to the constant changes in compliance requirements and we help ease that burden.

Existing providers within the KYC/AML space operate on high cost consulting-style basis, meaning they are not addressing needs across the vast majority of financial market participants and reporting entities.

LAB form is a streamlined platform which is designed to provide the most effective possible medium for online customer onboarding with the following benefits:

* Multi-product, multi-channel, multi-lingual

* Distributable via multiple white labels

* Compliant, scalable, reliable, auditable

* Lowest cost and quickest solution to implement available on the market

* LABform provides constantly updated compliance with all onboarding regulatory requirements, including KYC and AML/CTF

* LABform can also be tailored to the specific needs of the client and product (for enterprise level customers)

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? 

SelfWealth Ltd is an Australian owned and operated company which offers a brand-new solution to an age-old investment problem – empowering investors to make informed decisions without paying exorbitant brokerage fees. 

SelfWealth utilises LAB’s online investor onboarding solutions and experienced a 350% surge in demand for their services during the coronavirus pandemic. This in turn led to an increase in the number of electronic identity verifications (EIDV) performed during this time.

Digital processes like EIDV provide a seamless investor onboarding experience and offer organisations great efficiency gains while maintaining adherence to regulatory requirements but where exceptions arise manual processes are inevitably still required. And with higher volumes, there are naturally more exceptions.

An investor will fail electronic identity verification if their personal details cannot be matched to the available electronic data sources. Typically, they will then be required to upload certified copies of their identification documents for manual review.

The need to get documents certified presented investors with an almost insurmountable challenge throughout coronavirus pandemic lockdowns. Even firms that pivoted to accept uploads of uncertified identity documents then faced the additional challenge of processing extremely high volumes of uploaded identification documentation with their own workforce decentralised and working from home.

LAB Group analysed recent customer data and discovered that investors in younger age groups were twice as likely to fail the electronic identity check.

To solve this, we enhanced LABform to dynamically adjust the broker’s EIDV process based on age:

  • those in the younger cohort were asked to provide two forms of government identification in addition to name, address and date of birth
  • the existing process was maintained in the older cohort requiring just one government data source in addition to name, address and date of birth

Younger people are less likely to be on primary electronic data sources such as the electoral role. So by dynamically adjusting the application form to capture two forms of government identification we were able to leverage the Document Verification Service to boost the pass rate in the younger cohort by 100% and significantly reduce the number of applications needing manual processing.

The threshold for SelfWealth was set to optimise electronic identity verification pass rates, abandonment rates and manual process backlog. As the business drivers may be different for other customers, we always aim to be data driven to configure the most appropriate settings for each scenario and desired outcome. We also proactively monitor over time for additional incremental improvements.

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

Existing providers within the KYC/AML space operate on high cost consulting-style basis, meaning they are not addressing needs across the vast majority of financial market participants and reporting entities.

LABform is a streamlined platform which is designed to provide the most effective possible medium for online customer onboarding with the following benefits:

* Multi-product, multi-channel, multi-lingual

* Distributable via multiple white labels

* Compliant, scalable, reliable, auditable

* Lowest cost and quickest solution to implement available on the market

* LABform provides constantly updated compliance with all onboarding regulatory requirements, including KYC and AML/CTF

* LABform can also be tailored to the specific needs of the client and product (for enterprise level customers)

Our pricing model and fee structures allows our customer to only pay for the features that they use and allow our customers to estimate usage therefore controlling their pricing structure with multiple payment frequency options  allowing us to service enterprise and smaller clients.

Our technology is agile and simplified at every level allowing the customer to have a large amount of control in the process if this is desired.

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

Every RegTech provider is different, but establish what it is exactly your end user needs and which solution will provide you with not only the best customer journey for your end user, but growth in application numbers whilst satisfying AML/KYC regulations.

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

We’ve had a 300% volume growth in application numbers through 2020 due to accelerating COVID-19 driven digitisation and the resurgence of online trading,

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

We have processed over 1 million applications and are recently implementing a solution across the APAC region allowing us to expand globally.

What is drives you as company & what is LAB Group long term vision?

Since 2010, our product LABform has continued to be refined as a constantly improving customer acquisition platform for financial services providers. Originally, LAB Group’s founders started by building custom solutions for customer acquisition which quickly transformed into a specialist business providing core Software as a Service products –

LABform and Application Manager and we continue with this philosophy with continuous improvement through compliance monitoring, advanced analytics
and implementations.  Our technology will continue to evolve to meet the constantly
changing Know Your Customer and Compliance demands of regulators.

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

Regulators such as AUSTRAC have strongly encouraged financial services companies to support a digital, seamless, secure, and compliant customer journey and this supports our growth plans.

What’s next for LAB Group?

We have just completed a $4m Capital Raise and will use the funds to further drive platform deployment, integrations, servicing and product roadmap in a constantly evolving regulatory landscape.

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

You can visit our website at www.labgroup.com.au and email enquiries@labgroup.com.au

Planet Compliance

Planet Compliance is a marketplace where institutions and corporates can discover RegTech and LegalTech solutions. Planet Compliance also operates a content platform that provides information and insights on technology, regulation, compliance, finance and innovation.
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