Automated regulatory compliance specialist muinmos has earlier this year been selected to participate in the fifth cohort of the FCA’s Regulatory Sandbox. The Danish RegTech organisation uses Artificial Intelligence (AI) techniques to help financial institutions to categorise and validate regulatory compatibility for a range of financial products and services on a national and cross border basis.
Back in July 2019, Remonda Kirketerp-Moller, Founder and CEO, muinmos, joined LeapRate to let us know more details about the company and latest product PASS. She is back now to tell us all about the annual RegTech 100 list and where muinmos is as a company right now.
LR: Hi Remonda, good to have you as LeapRate’s guest again. Last time we talked, you had just launched your latest product PASS, as well as expanded muinmos’ team. What has changed in the company since then and what’s new?
Remonda: We’ve had a very strong six months not just because of changes at muinmos but also because the RegTech sector is becoming increasingly energetic. Financial institutions worldwide are increasingly recognising the value and benefits of solutions which combat the costs and complexities of meeting regulatory requirements and reduce corporate and client risk.
As a result of the market appetite, we’ve evolved our product in areas such as risk profiling of clients and product suitability for the wealth management sector, and we have continued to grow our team, most recently with the appointment of Conor Ringland as our Chief Commercial Officer. Conor’s previous roles include Chief Operating Officer at Concordium Foundation and CEO of Walbrook Capital Market so he brings a wealth of experience which is proving to be invaluable as he helps us to build our sales channel.
At the regulatory level, we have been engaged in sandbox discussions with the UK FCA, and were guests of Copenhagen Fintech at the Singapore Fintech Festival last month where we also presented alongside the Danish regulator in workshops and panels. It is clear that our engine which maps client classification, suitability and appropriateness across the MiFID regions and beyond is attracting attention from the regulators and we will continue to work closely with them.
LR: I saw your name in RegTech 100 list this year. Congratulations! Can you tell us what the RegTech 100 list is and why does it matter to be included in it?
Remonda: RegTech 100 is collated by a team of independent analysts and industry experts and it features the most innovative companies from around the world which are transforming compliance, risk management and cybersecurity.
Over 1000 companies were considered for inclusion and the 100 selected, from across 25 different countries, were all recognised for their ground-breaking technology which solves a significant industry problem, or generates cost savings or efficiency improvements across the compliance function. We were delighted to be included on the list for the third consecutive year – especially as the sector has become increasingly competitive.
Being included in the RegTech 100 is really important to us – it is a strong stamp of independent endorsement and is also valuable for driving sales as it is used to help senior management and compliance professionals evaluate which solutions have the strongest market potential.
LR: Over the last year there has been a lot of pressure for financial institutions, triggered by increased regulation. Employing RegTech solutions to modernise the compliance function must now be a mission-critical for financial institutions globally. Has the search for RegTech solutions increased during this last year?
Remonda: Modernising the compliance function is mission-critical for financial institutions globally and consequently, interest in muinmos has and is diversifying almost weekly. Where we were pretty much talking to heritage players from retail platforms a year ago, we are now having conversations with regulators, agencies, commercial remediation services, large European banks, digital asset platforms from the blockchain world, and also the large enterprise services. Having a unique product has driven a lot of interest from some chunky players for whom we can help to reduce cost, enhance efficiency and customer experience, stay in focus with regulation and govern mis-selling risk.
LR: Last time we discussed the hesitation in regard to trusting Artificial Intelligence. Is there any difference now, do people trust AI techniques more these days?
Remonda: Change takes a bit of time to bed in and prove itself and it’s fairly typical of a certain era, age of company, or heavily laden institution to mistrust new processes that they have always performed manually. The regulatory obligations though MiFID, for example, have created such a burden for financial institutions that this has resulted in forward-looking organisations considering new technologies to help them to address the challenges they face.
People are beginning to understand the benefits of AI technologies – in terms of muinmos’ AI technology the benefits include cost reduction, client experience and risk mitigation – but there is still a long way to go in AI becoming more widely adopted.
When clients see our PASS engine they are amazed at what muinmos has consolidated into a single workflow and are really keen to know how it works, which regulators we cover etc. We feel it’s only a short few years before the regulators also deploy some AI solutions themselves. This is inevitable and will be a very positive step forward for the industry as a whole.
LR: What are your plans for 2020?
Remonda: 2020 will be a massive year for muinmos. We have a very interesting pipeline in the retail space which we will hone, but we are now seeing interest from wealth management, large bank innovations hubs, and some major financial institutions requiring remediation services – we also expect to add more regulators to our discussion.
We are also keen to investigate private banking as that sector probably needs a dust off with some new tech. The first six months will be all about scaling our own onboarding processes and the second half of the year will be about some big names. We look forward to telling you all about that in Q4.