Regtech Corlytics has acquired Clausematch, which provides proof and tracking of compliance, allowing the expanded Corlytics Group to offer a “one-stop-shop” regtech solution.
Corlytics’ intelligent regulations and regulatory data, alongside its proprietary technologies and intellectual property, combined with the Clausematch capability of creating, maintaining and mapping intelligent regulatory documents and policies, will give customers the ability to manage the entire regulatory risk value chain.
Corlytics’ CEO John Byrne said: “Clausematch will continue its ongoing work with existing clients and extend our reach to 14 of the top 50 global banks.”
The acquisition will combine both teams’ years of development and proprietary AI models enabling classifying, tagging and mapping regulatory content to help with making sense of the regulatory and compliance content.
Talking to BEST EXECUTION, Byrne said that previously in the market there has been a lack of fully joined up thinking. “We are now able to go beyond automated regulatory monitoring, auto-routing and auto tagging, to holding a full global regulatory and law library that stores global content as a fully digital set of obligations in a single location, to policy management enabling compliance policies and procedures to be developed, approved, published and distributed and now full attestation. A wholly auditable trail.
“Banks can now provide attestation reports, which proves they have correctly complied with all obligations. This enables firms to avoid significant fines which include regulatory management as a root cause – not having and sticking to process. We are now able to offer peace of mind through data, process, documentation and attestation,” Byrne added.
Thanks to the combined offering, clients will be able to show to regulators how a regulatory change is assessed, implemented and communicated internally and also be able to provide compliance attestations in a single platform.
Talking to BEST EXECUTION, Clausematch founder and CEO Evgeny Likhoded explained that every time a regulation is changed, a large number of people and procedures are required to put the new regulation into effect.
“Typically, it comes down to creating new rules and procedures or changing existing ones, then informing the staff of those changes. Ultimately, it is important to be able to demonstrate to the regulator that a policy, process, or internal risk control relating to a certain rule or duty has been correctly implemented, shared with the workforce, and then evaluated for efficacy.”
Likhoded said Clausematch provides a workflow solution that is essentially AI-powered smart connected documents for risk and compliance. “Where we’re coming from is how banks and other regulated industries such as insurance, energy, healthcare pharma, and many others, address regulation from the point of view of internal documentation. Clausematch enables the complete digital transformation of all of these processes.”
Thanks to this acquisition, and the acquisition of ING SparQ in January, the firm is plotting “ambitious growth” over the next two years as the global regtech market is estimated to grow at a CAGR of 53%.
On why the regtech market is growing at such a clip, Byrne told BEST EXECUTION: “Regulators are walking a tightrope between regulation and innovation. As they race to keep up with technological advancements, businesses are under increasing pressure to quickly adapt to the latest regulations intended to achieve that balance.
“This creates huge demand for regtech solutions that empower regulated businesses to stay ahead of the curve, and seamlessly incorporate the latest regulatory changes.
“We are also facing regulation inflation. There are generally more regulations in all areas of financial services, but also new regulations in areas like ESG, security and consumer duty. What could have been managed at a stretch manually three years ago is impossible today.”
The group, which works with global Tier 1 organisations including 14 of the world’s top 50 banks, said the acquisition brings the combined number of clients to 80.
Likhoded will take up the newly created position of President of Corlytics, tasked with partnering with banks, insurers and payment companies, while Byrne will be CEO of the enlarged group.
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