AI-powered regtech lands £2.1m to help banks dodge FCA fines
An AI-powered regulation tech firm has landed £2.1m in funding to help banks avoid getting fines from the City watchdog.
Adclear, which uses software to ensure lenders’ books are in order, has capped off a funding round which has included backing from Clearscore founder Dan Cobley and Coinbase’s UK managing director Keith Grose.
With Adclear’s services live and working with fintechs and banks across the UK, co-founder Joe Jordan told City PM the fresh injection will help expand across “other areas in the compliance workflow where we think AI can be used”.
The firm – which counts PensionBee, Yonder and InvestEngine among its customer base – uses pre-publication checks to accelerate the process for marketing teams to ensure they can meet compliance requirements.
Jordan said Adclear permits marketing to “move quicker, get through that process, send an approved asset from Adclear perspective to compliance and compliance can come in and double check that”.
He added it cuts out “all the manual feedback” and frees employees up to do “a million and one things”.
Regulators ‘show their teeth’
The regtech founder said there had been a rise in “regulators showing their teeth” and the “increasing amount of regulations that firms have to adhere to” had created a vacuum for regtech firms.
“I think naturally there’s a tension between innovation and regulation, but there’s also opportunity when they can work together in the right way,” he added.
Adclear was born out of Jordan’s in 2022 conversation with a family member who worked in regulation.
“We got speaking about how much of your work flow is repetitive and figured out that finance was one of the most regulated industries for marketing and product screens,” he said.
Smart money app Plum was the firm’s first customer, which Jordan said “helped really build a defining product”.
The company secured £510,000 in pre-seed funding, which was backed by Haatch, Force Over Mass and Founders Capita.
UK watchdogs have sharpened their swords over the last year with the Financial Conduct Authority and Bank of England handing out £74.9m worth of fines to a trio of UK financial services firms, across the span of ten days.
Leading the pack, and most recently, was Barclays after the bank was put on the hook for £42m after failings in its financial crime risk management.
Over in the US Robinhood was slapped with a $26m fine by the financial watchdog for failing to properly supervise and retain records of social media communications by paid influencers.