A recent roundtable discussion hosted by Encompass Corporation, brimming with insights on KYC automation, has offered valuable perspectives on the evolving KYC landscape.
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European AML & FinCrime funding declined only 16% supported by large late stage deals
Key European AML & FinCrime investment stats in 2023:
- European AML & FinCrime companies raised a combined $252m in 2023, a 16% drop YoY
- European AML & FinCrime deal activity reached 63 deals in 2023, a 44% reduction from 2022
- The UK was the most active AML & FinCrime country with a 30% share of all dealsEurope’s AML & FinCrime sector has seen a significant drop in deal activity in 2023, almost halving compared to the previous year. The fourth quarter signalled the bottom has not been reached with only four deals announced. European AML & FinCrime firms collectively secured $252m in funding in 2023, marking a 16% year-over-year decrease. The number of European AML & FinCrime deals in 2023 amounted to 63, representing a substantial 44% decline compared to 2022.Fourthline, an end-to-end KYC and AML compliance solution, had the largest European AML & FinCrime deal in 2023, raising $54.5m in their latest Series B funding round, led by Finch Capital. The company intends to use the funds to accelerate growth and expand operations. Fourthline now “employs over 270 people across The Netherlands, France, Spain and the UK; and works with European FinTech leaders including N26, Trade Republic, Qonto and Scalable Capital; and other regulated financial institutions such as NN, Solaris and Western Union.” Krik Gunning, co-founder and CEO, says: “We are on a mission to help regulated entities fight ever more complex financial crime. The huge leaps forward in technology over the last decade have been a double-edged sword: while consumers benefit from easier and quicker access to banking products, the nefarious actors have leveraged technologies such as deepfakes and social engineering such as money mules to increase the sophistication of their fraudulence. At present, approximately €1.8trillion dollars are laundered every year.”The UK was the most active AML & FinCrime country with 19 deals, a 30% share of deals. This was followed by The Netherlands with six deals, a 9.5% share of all funding rounds and Switzerland was the third with five deals, a 7.9% share.In December 2023, the EU Council and Parliament reached a provisional agreement to establish a new European authority, known as AMLA, dedicated to combatting money laundering and terrorist financing within the EU. AMLA will possess both direct and indirect supervisory powers over high-risk financial entities and will enhance the overall effectiveness of anti-money laundering and counter-financing of terrorism (AML/CFT) efforts by collaborating with national supervisors. The authority will also have a supporting role in non-financial sectors and coordinate financial intelligence units across member states. AMLA can impose pecuniary sanctions for serious and repeated breaches, and it will directly supervise certain high-risk institutions, including crypto asset service providers, operating across borders. Governance will involve a general board and an executive board, with an emphasis on whistleblowing mechanisms, dispute resolution, and ongoing negotiations regarding the agency's location. The agreement is pending finalization and approval by member states and the European Parliament, while negotiations on related regulations and directives continue.
Founder & CEO, Group 8 Security Solutions Inc. DBA Machine Learning Intelligence
10moThanks a bunch for posting!
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