Charlie is one of London’s greatest serial entrepreneurs – with ground-breaking the Student Room and Market Invoice under his belt, as an MLRO he saw the huge gap in the market for using AI/ML to solve both the Financial Crime problem and businesses problems in risking prison if they get it wrong. Thus he formed ComplyAdvantage in 2014 which now has offices in four countries around the world.
This whole area has many dimensions. First it’s a regulatory necessity – Fintechs, FS and increasingly others (Apple had to pay a big fine recently) need to Do The Right Thing. Second its a huge resource drain, traditionally very manually done. But third the MLRO is the poor bod that will be picked on to go to jail.
How does Fintech/FS handle these challenges?
What can computers and a smart bunch of folks do to solve this in a 21stC way?
All this and more are covered in this episode. Topics discussed include:
- Covent Garden in need of street cleaning
- ComplyAdvantage is launching their own podcast in 2020
- Charles brother’s podcast – the widely-known Delingpod (by James Delingpole). A recent episode being on Monnery’s book on Cowperthwaite who, post-WW2 as Treasury Secretary, made Hong Kong minarchistic and prosperous
- A comparison of minarchism in HK and maxarchism in EU regulation – this as the driver of perennially sub-trend-growth in Europe
- Other factors affecting regulation
- At a strategic level the need for the UK post-Brexit to go back to simpler, clearer regulation to encourage business
- A case study of the evolution of banking regulation
- The UK tax code has increased six-fold in the past twenty years :-O
- Tech’s role in both creating but also potentially rescuing us (slightly) from complex regulation of minutiae
- the greater threat of financial crime as Fintechs have increasingly global lists of clients
- strategic vs tactical perspective on regulation; tactically we have to deal with the world as it is today
- how to be a super-successful serial entrepreneur – Charlie’s background creating the Student Room and (jointly with Anil Stocker) Market Invoice (with JPM in between – which rarely he hadn’t founded)
- the dawn of Fintech ~2010 when all the famous names were merely a handful of people in a room
- the drivers behind Fintech’s “Cambrian explosion” 2010 onwards
- what led Charlie to found ComplyAdvantage
- how come people become MLROs and take on infinitely more risk of prison than all their colleagues?
- the largest departments in Fintech are customer support (if a B2C) or compliance
- Financial Crime spectrum from “stealing from old ladies” to the US economic warfare against countries it doesn’t like
- how to cope with a world when the police can’t even catch all criminals. How on earth are Fintechs supposed to be perfect?
- regulators perspectives
- “false positives” and “false negatives”
- the different lists/checks etc for Financial Crime
- Apple’s fine and how fine magnitudes are arrived at
- the genesis of databases of potential financial criminals
- moving on to automating this approach
- why doesn’t GCHQ provide Fintechs with an API that enables Fintechs/FS to ask whether someone is kosher or not?
- the scale of investment to “do your own GCHQ” and track everyone – CA have raised $40m and spent $20m last year alone
- this scale of investment means that you need to buy-in an automated service, not DIY
- “Every Fintech should be using us for three things” – onboarding. monitoring existing clients, understanding clients transaction patterns
- the types of monitoring you need to apply to various types of client
- “We do it for most Fintechs in London”
- relevance not just to Fintechs but Banks, Insurance Companies and corporations
- CA have 500 clients and far more via resellers
- Why CA is better than the alternatives 🙂
- The vast majority of inaccurate predictions are false positives – ie identifying clients who are not guilty of crime but will need to be checked manually
And much much more 🙂
Share and enjoy!