GRC and Regtech Innovators Expand Their Executive Suites

Fueled by global demand and rising revenue, fast-growing providers of risk and compliance services and technology are building up their senior executive ranks.

As announced in January, Vatsa Narasimha, former president and CEO of OANDA Global Corp., is chief operating officer and chief financial officer of ComplyAdvantage; and Shvetank Shah, formerly of Gartner, is CEO of ACA Compliance Group.

Venture-capital-backed ComplyAdvantage, which was founded in London in 2014, deploys innovative machine learning technology and has more than 500 enterprise clients worldwide, brought on SAI Global and Thomson Reuters veteran Michael Orrick as president, Americas last year. He and Narasimha are both based in New York.

Also in 2019, New York-headquartered ACA Compliance Group named as chief services officer Carlo di Florio, a former director of the Securities and Exchange Commission's Office of Client Inspections and Examinations (OCIE) and chief risk and strategy officer of the Financial Industry Regulatory Authority (FINRA). Other staff additions included nine principal and senior principal consultants with chief compliance officer and legal/regulatory backgrounds. And in October the company launched ComplianceAlpha 2.0, its “next-generation compliance and risk management platform [that] helps financial services firms stay one step ahead of regulators' increasingly advanced technological capabilities to detect insider trading, market abuse, and other potential misconduct.”

The moves by ACA and ComplyAdvantage reflect ongoing trends in governance, risk and compliance (GRC) as firms seek help in keeping pace with fast-changing regulations along with the daunting operational challenges of anti-money-laundering and other complicated, high-volume scanning and screening processes.

They are part of the rapidly expanding regtech subsector of financial technology investing. ComplyAdvantage, which won a Finovate Group Best Regtech Solution award, raised $30 million in a Series B round last year, led by Index Ventures. At a different level, FeedStock, which describes itself as an “AI-driven SaaS [software as a service] business that leverages the latest natural language processing technologies to enable financial services companies to meet both their compliance requirements and commercial goals,” announced a £2.5 million financing on January 20.

There has also been a spate of mergers and acquisitions, including ACA's purchase of GRC specialist Cordium in September 2018 and exits such as RegTek.Solutions' sale to Bloomberg in August 2019. (See Hot Properties: Risk and Compliance Software)

Global Risk Database

ComplyAdvantage, which has more than 200 employees, says that its vision “is to take on and neutralize the risk of money laundering, terrorist financing, corruption and all other global financial crimes by providing the world's only dynamic global risk database of people and companies.” The founder and CEO, Charles Delingpole, influenced by his experience as money laundering reporting officer at JPMorgan Chase & Co., set out to apply artificial intelligence and cloud technologies to automate traditionally manual processes and minimize the false positives that overload compliance departments and cause illicit transactions to fall through the cracks.

Financial institutions globally have paid $36 billion in fines for anti-money-laundering, Know Your Customer and sanctions non-compliance since the financial crisis, and 12 of the world's top 50 banks were hit with such penalties in 2019, according to client lifecycle management software company Fenergo.

“ComplyAdvantage has a strong customer-centric vision and has demonstrated its impact across financial institutions and fintech clients,” said COO and CFO Narasimha, who led OANDA, a foreign exchange trading platform, through its 2018 acquisition by CVC Capital Partners. “The team at ComplyAdvantage have done a fantastic job broadening their global footprint by offering a range of innovative compliance solutions. I'm excited to join the company at this pivotal time of growth as we work to become the industry standard for accurate, real-time AML data and technology that all financial institutions and corporates need.”

Delingpole in the press release described Narasimha as “a well-respected fintech executive who was instrumental in OANDA's success story. I look forward to what we will accomplish together as we grow our next-generation anti-money-laundering technology platform across new markets.”

Prior to OANDA, Narasimha was a Boston Consulting Group principal, working with leading financial institutions on growth strategy, corporate development and operational issues. He holds an MS degree in electrical engineering from Cornell University and an MBA from the Wharton School of the University of Pennsylvania.

“Financial crime detection tools are critical to neutralize the risk of money laundering, terrorist financing, corruption and all other global financial crimes, but the industry is not innovating enough to make a real difference,” stated Jan Hammer, an Index Ventures partner and ComplyAdvantage board member who is also an investor in Adyen, Alan and Robinhood.

“ComplyAdvantage is building the first global, connected database to allow companies to identify their risks faster and in a more sophisticated manner,” Hammer added. “The success they have had shows the increasing demand for such a solution. Vatsa's hiring is exciting as his expertise will be crucial as the business continues to scale in its next phase of growth. Having known Vatsa for a good part of a decade, I can unreservedly say he is one of the best operators I have encountered.”

“Next Phase of Growth”

Shvetank Shah, who is based in ACA's Silver Spring, Maryland, office, “will oversee all global operations and the corporate growth strategy,” according to the January 14 announcement. “His responsibilities will include executive leadership, management, strategic vision and accelerating the growth of the business.”

He had spent 17 years at research and advisory firm Gartner and CEB, which the former acquired in 2017. He most recently led Gartner's Technology and Service Provider practice, and previously led CEB's IT, Finance, Legal, Operations, Risk, and Strategy practices. Before joining CEB, Shah was the founding CEO of CNet Networks' Indian operations, and was a management consultant with PwC and PA Consulting Group.

“ACA has grown significantly over the last 17 years to employ over 700 employees and offer a broad range of GRC offerings,” said ACA chairman Alex Goor. “Shvetank's proven track record, strategy-based approach, investment in people, and deep expertise in operations will ensure that ACA continues to employ the best people and offer best-in-breed products and services.”

“The regulators and investment practices have advanced significantly since our founding [in 2002], and as a firm we continue to evolve and deliver innovative solutions to address the challenges our clients are facing,” said co-founder, partner and chief revenue officer Jeffrey C. Morton. “Shvetank's experience parallels the core of ACA's values and vision. His vision, passion, and experience will be critical in maintaining the core of what makes ACA great while we embark on our next phase of growth.”

Said Shah: “The people at ACA are what makes this company so unique and exciting to be a part of. I look forward to working closely with our team to expand our GRC offerings, develop our employees, further enhance our technology platforms, and continue to provide exceptional service to our clients.”