Merlon – Planet Compliance RegTech Interview (2021)

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

Merlon has revolutionized adverse media investigations for AML, KYC, and due diligence, automating the tedious, repetitive process of finding, organizing, and reading negative news to identify customer and 3rd party risk. 

Through its advanced AI and Natural Language Processing engines, Merlon separates relevant and irrelevant articles, understands article context, and determines the subject’s involvement, allowing analysts to review consolidated findings instead of long lists of articles. This results in a huge reduction in the tedious, manual effort normally required.

Merlon’s SaaS adverse media screening solution is designed for single users all the way to enterprise clients.  The solution enables AML analysts to focus attention on risk rather than reading dozens or hundreds of articles, saving upwards of 80% of analyst time per investigation.

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

AML analysts spend countless hours going through near-endless lists of articles to identify potential risk.  Many institutions still define their adverse media policies based on how many pages of Google News results are processed. This process is slow and error-prone, resulting in high personnel costs while missing a significant amount of risk.

Merlon has changed this approach.  Rather than reviewing articles, Merlon users review Findings:  risk details and evidence extracted from news articles.  The AI and natural language processing goes far beyond traditional keyword-based systems, using context to deliver risk-relevant results.  Additionally, Merlon identifies the perpetrator of risks, thereby significantly reducing the number of results to be remediated. 

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? 

A global bank with a long history of using a leading data provider for their adverse media screening came to Merlon to increase the efficiency of their adverse media operations.  Their analysts used to spend huge amounts of time processing article after article to find risk associated with their clients and prospects.  Merlon was installed on top of their existing data provider (Merlon offers both integrated data and 3rd party data ingest).  Through use of Merlon’s technology, AML analysts are now able to identify risk from unstructured adverse media more efficiently.

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

Traditional adverse media tools rely on either human-curated databases or a keyword-based article search. 

Human-curated databases are limited by the number of researchers employed by the data vendor.  When using human-curated databases, the list of profiles cannot cover all potential high-risk individuals and entities globally as the size and scope of the database is limited by the number of researchers employed by the data vendor.

Keyword-based systems take the searched name and append it with a static list of terms to search against in articles.  These terms will include keywords like money laundering, organized crime, war crimes, etc.

Merlon solves the issues with both approaches.  Through our expansive data library, we ensure we do not miss key risk events.  The proprietary AI/NLP engines identify risk based on article context rather than keywords and ensure the subject of the investigation is the perpetrator of the risk rather than a victim, bystander, lawyer, witness, or other 3rd parties.

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

AI and NLP have become popular buzzwords in the AML and RegTech industry.  Many companies use these words to attract attention without the technology behind the scenes to support it.  Look beyond these terms to see how the AI (Artificial Intelligence) and NLP (Natural Language Processing) are used to solve real compliance problems.  How does the product reduce risk or cost?  Go beyond the buzzwords.

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?

While the COVID-19 pandemic has challenged us by limiting travel and employee interaction, it has enabled the team to stay laser focused on delivering the best-in-class solution for the market.  2020-2021 have been transformative for Merlon, bringing our technology to the market as an instant-on SaaS offering.

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

2020 Wealth & Finance International – Best Use of AI to fight financial crime

2020 Wealth & Finance International – Innovation in automated adverse media screening

2020 – Themis Anti-Financial Crime Innovation Award Nominee

2020 – Banking CIO Outlook’s Top KYC Solution Providers

2021 – SOC2 Certification

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

Merlon has brought together experts in AML/KYC with experts in AI/NLP.  This mix of dedicated individuals across industries has created a culture of passion for both innovation as well as fighting financial crime. 

Our corporate vision and philosophy is to build WOW!  We are focused on delivering a user experience that helps compliance analysts focus and enjoy their work, removing tedious roadblocks and mundane tasks to truly uncover risk.

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

Automation is the name of the game.  This means removing manual, tedious tasks from analysts.  With more requirements around UBO, cryptocurrency, and the AMLA (AML Act of 2020), compliance teams are more stretched than ever.  Too many FIs are still using technology from 20+ years ago and armies of analysts performing manual tasks.  As compliance teams are being asked to do more with the same resources, they must innovate to keep up with the workload.

What’s next for Merlon?

Over the next year, Merlon will continue to grow our solution, incorporating more and more data globally while focusing the results where risk lies.

AI is a buzzword across RegTech. How does AI benefit compliance teams?

AI is simply another technology in the toolbelt of solution vendors.  Simply using or advertising the use of AI is not enough to make a difference for the end user.  It is rather that AI enables new ways to solve problems that have existed for decades. 

As an example, Merlon has built a context-aware AI engine that greatly reduces the number of false positives.  Our AI can differentiate between poaching (cooking), poaching (employment news), and poaching (wildlife crime).

Additionally, our AI extracts key data points, such as name, date of birth, and occupation, consolidates risk topics across articles into unique Findings, and only returns those Findings where the subject of the investigation is the perpetrator of the associated risk. 

Combined, these tools, driven by cutting-edge AI and NLP, significantly reduce the remediation time and effort.

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

Visit our website at https://merlon.ai or email us at sales@merlon.ai.

Planet Compliance

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