Reported by: Laura Noonan

Clouds are gathering over swaths of fintech companies, as falling economic growth, rising interest rates and a cost of living crisis put their business models under strain, forcing job cuts and valuation-crushing funding rounds.

ComplyAdvantage founder Charlie Delingpole knows his company is not immune to those forces, as fintechs are among the biggest buyers of his financial crime prevention products. In fact, some clients, including crypto lender Celsius Network, have already gone bust.

But the business — which uses natural language processing and artificial intelligence (AI) to run compliance checks on transactions — is proving more resilient than most, as Russia-related sanctions and a global clampdown on financial crime underpin healthy demand.

“We’re the last thing they turn off before their server,” says Delingpole, a one-time JPMorgan Chase technology banker, of the enduring demand for his company’s services from financial groups — even when times are tight.

Delingpole, who transitioned from chief executive to executive chair in October, founded ComplyAdvantage eight years ago. Back then, demand for compliance checks was already ramping up in the aftermath of the 2008 financial crisis, as financial institutions were hit with hefty fines for mistakes and misconduct.

Delingpole thought financial services companies, and the third-party data providers they relied on, such as LexisNexis and World-Check, were missing a trick in the race to keep up with ever-changing rules and more aggressive regulators.

“They were employing thousands of researchers to manually compile information,” he says. “What we’ve done is use machine learning to collate thousands of data sources and then merge them together.”

ComplyAdvantage automates the scanning of hundreds of thousands of documents to draw connections between people, companies and illicit activities. “We’re not flying to Saudi Arabia to look at the corporate registry,” explains Delingpole. “We’re just doing the super high-volume AI-type work.”

ComplyAdvantage’s growth to become a $50mn revenue company with 500 staff and a roster of more than 1,000 clients has been fuelled by several international trends.

Read full report: https://www.ft.com/content/aae4f11a-aa7b-47ce-b9a7-eb39f345dab3