In a world where almost every financial process has been automated to some extent, the process of onboarding a new client or customer and checking them against anti-money laundering legislation is still largely done manually, taking up to 26 days to finalise. Founded in Hong Kong two and a half years ago, Know Your Customer has developed a high-tech solution, which verifies the original source documentation provided by new customers and reduces onboarding time to as little as one day.
“We work as the technology partner for firms in banking, law, insurance, accountancy, and other fields in need of efficient customer ID verification,” explains CEO and co-founder of Know Your Customer, Claus Christensen. “We first encountered the problem in a different context and thought that we should be able to solve it with technology. We spent the next 18 months crystallising that into a product, which we launched last year.”
Speaking the language of financial institutions
Market response to the product was very positive but firm orders were slow in coming initially.
“We very quickly found that the market wanted the product and was willing to pay for it, but we also found that selling to financial institutions is not as simple or as easy as selling to firms in other sectors,” Christensen adds.
“You need enterprise-level salespeople, who can speak the same language as the financial institutions. We put that team in place but the sales cycle is still six to nine months long. That’s quite a challenge for a young start-up company like Know Your Customer was. Nevertheless, just a year on, we have 19 paying customers. We are now way past the initial product stage and have paying customers.”
Much of the company’s future growth will come from international expansion.
“Enterprise Ireland [the national export agency] has been very helpful in supporting us to make connections outside of Ireland,” says Christensen. “It is an amazing organisation for start-ups. First, the €250,000 investment from Enterprise Ireland sent a powerful signal to the wider market that we are company to be reckoned with. It also sent a message to other potential investors. Enterprise Ireland has also brought us to the right trade shows, introduced us to potential customers, and most of all when we went to Asia.”
Building fintech partnerships in Asia
Asia is very interesting for regtech companies like Know Your Customer, according to Christensen.
“It is very strongly regulated and the regulation is compatible with ours,” he points out. “English is also the language commonly used in Hong Kong and Singapore. When you put these things together, Asia is very interesting. We went to a trade show in Singapore last year, and then went to Hong Kong. Enterprise Ireland’s people are embedded in the fintech industry in Hong Kong, and they helped us with contacts, and came to customer meetings with us.”
Christensen spent three months in the first half of 2018 on the Fintech Supercharger accelerator programme in Hong Kong.
“It was sponsored by Liberty Investments and Standard Chartered and was very successful for us. We had our first Hong Kong customer within three months, despite the sales cycle normally taking much longer than that. This is Hong Kong’s provider of digital banking solutions, Neat.hk.”
Asia presents significant opportunities for the company.
“Being in Asia opens up a range of countries with fast-growing economies, while Hong Kong offers a gateway to China, the second largest and fastest-growing economy in the world. Hong Kong is the perfect place to be in our space because China’s main financial institutions are all expanding outside China. That means they are confronted by very a different set of rules. Regulations are very difficult in mainland China and Hong Kong is the place they come to first in order to get exposure to the global regulatory environment. We are perfectly placed to grow there. It will play a big role for us going forward.
“We are also planning to expand into Europe”, he concludes. “We are looking at the German and French-speaking markets. Enterprise Ireland is being very helpful in connecting us with potential partners there.”