Startup spotlight: Acin is the regtech to watch
Hi Paul. Can you t...
As we continue our series of flash interviews on startups to watch in 2020, we catch up with CEO Paul Ford of regtech company, Acin.
Hi Paul. Can you tell us a little bit about what Acin does?
Acin is a global regtech data company that is digitising non-financial risk (NFR) for financial institutions. Our ground-breaking solution combines technology, data standards and content to consistently measure, manage and mitigate NFR. Acin connects users within and across banks, allowing them to clearly visualise their data and see how they compare to their peers.
Since 2008, banks have increasingly struggled to manage their NFR effectively amidst the influx of regulation and new controls, incurring spending inefficiencies and billions in non-compliance fines.
Acin uses defined metadata to digitise and map risks and controls, so that gaps and overlaps can be identified for each individual firm, and benchmarked against their peer firms. The Acin network connects these firms together to share data and knowledge, thus keeping all participants up-to-date and able to demonstrate to regulators that they are in control.
What makes Acin's digitisation process unique?
Acin’s solution is completely unique, offering unprecedented clarity and collaboration around NFR – on the intrafirm and interfirm level.
A key component in our digitisation process is our unique, barcode-like Advanced Control Identification Numbers – “ACINs”. These are assigned to individual risks and controls so that they can be mapped; facilitating evaluation both from within companies and across the network. Controls are also assigned standardised KPIs so that performance can be measured.
In parallel, Acin’s unique Networked Defence Model provides continually curated Risk & Control data from across the network, leveraging collective insights to ensure members’ inventories are complete and up-to-date, and learnings and best practice are shared.
This means that Acin not only provides a level of protection and certainty that no firm could achieve in isolation, but it also creates a foundation for excellent business – by connecting the owners of risk (its managers) with the indicators of risk (clear data).
What was Acin's most recent award?
Last month Acin was named to the RegTech100 list, an exclusive directory of the world’s leading RegTech companies, for the second year running. The panel of analysts and industry experts who compiled the list recognised the value of the ground-breaking work we have been doing, and its implications for NFR management, compliance and the financial sector as a whole.
Our inclusion for a second consecutive year is testament to our continued growth and to the value of our innovative solution that is enabling financial institutions to take control of their NFR – ultimately driving positive change through industry collaboration.
As 2019 draws to a close, how is Acin positioned in the industry?
After a pivotal year, the Acin platform has recently expanded to include 15 tier-one banks, in the US, Europe and Asia. This continues our record of rapid growth and adoption amongst largescale multinational banks, which includes the likes of Société General, Standard Chartered Bank and Credit Suisse. From the start, our focus has been on working with the biggest and best banks, as we are confident that our solution is needed.
We are also soon to expand our offering further across the financial sector – we are now extending our network to include Asset Management.
The continued growth of the Acin network is good news for both existing and prospective clients, as each additional member means more shared knowledge and another boost to the network’s inherent defensibility.
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What's on the cards for Acin in 2020?
As regulatory and industry scrutiny of NFR continue to increase, the need for Acin’s solution has never been more pronounced. Against the backdrop of this month’s joint consultation paper from the PRA and BoE proposing a redoubled emphasis on operational resilience, 2020 is set to be a key year for Acin. Our focus will be on growing our technological capabilities, enriching our data outputs and developing our products, as well as enhancing client functionality through a portal giving network members access to exclusive insights.
Large and valuable organisations have already been built to support financial risk management (take the rise of Bloomberg as market risk came to the fore, and ratings agencies as credit risk increased in salience), and the same phenomenon is set to touch NFR as the need to quantify it grows.
Ultimately, Acin will continue to transform the NFR discipline into a similarly data-led science to its financial risk counterparts. We are already in ongoing conversations with several ratings agencies and these are set to continue.
About Paul Ford
Paul Ford is the Founder and CEO of Acin and has over 25 years’ operational and financial services experience. Ford founded Anchura Partners, an operational risk consultancy, in 2010 and grew it to be a highly successful business, before exiting in 2018 to found Acin. Previously, he held COO roles at Barclays Wealth’s Ultra High Net Worth business and in the EMEA division at Credit Suisse – he used this experience to gain an on-the-ground insight into the non-financial risk practices of financial services firms. Prior to this, Ford was a management consultant at Accenture and a Captain in the British Army’s Royal Engineers.
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Robinhood faces $35mn fine from New York DFS
The company’s crypto division was issued with a wrist slap in 2020, following the red flagging of several “matters requiring attention”. Robinhood revealed it had reached a settlement with the New York State Department of Financial Services regarding the issues, which related to “alleged violations” of cybersecurity and anti-money laundering rules.
The news follows on from the announcement earlier this week that the trading platform favoured by armchair investors, which almost broke Wall Street earlier this year, has an expected valuation of $35bn following its IPO.
Critics of the platform say Robinhood encourages “risky behaviour” among inexperienced (armchair) investors. The app has also been criticised for not informing customers that much of its profits are generated by routing their trades to Wall Street firms taking the other side, or so-called "payment for order flow."
Robinhood said last month they expected the DFS fine to be at the $15mn mark, adding it would be “the bottom of the range for our probable loss in this matter”. The $35mn penalty is on top of the record $70mn Robinhood incurred from US financial regulator FINRA in June, for “lax vetting and outages.”
However, the settlement indicates the company’s IPO will go ahead as planned, despite initial concerns the investigation could see the float delayed until later this year.
Robinhood floats imminent
Despite the regulatory hiccups, Robinhood priced its IPO between US$38-US$42 per share, giving the platform the US$35bn valuation and analysts predict the firm’s debut on the Nasdaq could occur as early as next week.
Robinhood democratising investment
Launched in 2013 by Tenev and Bhatt, who were Stanford University roommates, Robinhood’s founders will retain most of the voting rights after the IPO. Bhatt reportedly holds 39% of the voting power of outstanding stock, while Tenev holds 26.2%.
The online brokerage, which came under fire for its handling of the GameStop trading debacle, which saw the platform limit stocks to investors, states its mission is to “democratise” investing and is one of the most highly anticipated IPOs of the year.
Robinhood was valued at $11.7bn in autumn 2020 following a private equity funding drive. The new valuation will mean represent a three-fold increase in the company’s market value in less than 12 months.