Interview with Cindy van Niekerk, CEO of Umazi
You have10 years of vast experience on the front lines of large-scale IT-regulatory projects with top global financial institutions, such as JP Morgan, HSBC, Barclays, and Deutsche Bank, to name a few. What was the inspiration to starty our own fintech Umazi?
Throughout my career, I have witnessed first-hand the huge amount of effort required by regulated entities to stay on top of ever-changing compliance requirements. Vast team sand sophisticated technology are deployed at great expense, but many processes remain slow, manual and repetitive, falling back to pieces of paper and emailed spreadsheets... and both financial crime and regulatory penalties are growing, not shrinking! This pain isn't just felt by financial institutions either - the customers they are trying to work with have to jump through an increasing number of hoops just to do business and frequently complain that they are answering variations of the same questions in every due diligence process they go through. I knew there had to be a better way, and after completing the very first Blockchain course at Oxford University, I saw that it was possible to apply the benefits of a secure decent ralised network to these problems. Just like that, Umazi was born!
Have you or your staff ever been the subject of a Due Diligence onboarding? If so, what was your experience?
Oh absolutely - starting a new business can feel like a constant stream of due diligence processes because you have to establish trust from zero with every new relationship you form. Need a lawyer to work on your incorporation paperwork? Fill in this KYC form. Need a bank account? Submit a load of details and wait an unpredictable amount of time for a response. Joining an accelerator? Raising money from investors? Get ready to prove your company is real and all the directors are legitimate. Hiring an accountant for your year-end bookkeeping? You get the idea... It is a lot of scanning passports and utility bills and filling in similar-but-different forms with reams of sensitive information. And the worst part is that many of these processes have to be repeated in some way a year or so down the line, so you find yourself responsible for keeping the records held by many of your partners up to date, which is a burden anyone trying to run a business could really do without.
Apparently, a networking approach sets you apart from other companies. Can you tell us more about the innovations you provide?
There are three major innovations in our platform. The first is that we bring together many of the data sources and tools which businesses use when performing due diligence and integrate them together in a single, consistent interface, which simplifies the compliance workflow considerably. The second is that the company itself gets to control the profile, which is created during due diligence, which means it can be effortlessly reused in future processes, avoiding all the repetition we discussed earlier. And the third is that because all the data from every diligence process a company is subject to is aggregated together in one place, we are able to offer real-time updates and unique risk insights which help our customers stay on top of their compliance obligations. In this way, you can think of Umazi as a Corporate Identity Network - a connected graph of verified legal entities with permissioned access under control of the data subjects themselves. There really isn't anything else like this in the market today.
Why are the Decentralized Identity and Self-sovereignty approaches significant for you?
Difficulties establishing trusted relationships hold businesses and individuals back from achieving their full potential. If we could harness the energy we put into proving who we are and that we are legitimate into more constructive pursuits, just think how much happier and more productive we would all be! Fundamentally, this is the promise of decentralised or self-sovereign identity: that a data subject can have at their disposal all of the relevant information about themselves according to the various trusted parties the interact with and can selectively share that information in a way that is instantly verifiable, in order to prove what is needed to establish new trusted relationships. No single tool or platform can gather all the many dimensions of an identity into a single database - individuals have hundreds of relationships, and businesses maintain thousands, so it just isn't practical to cover every imaginable scenario. Instead, we need to let the individual or business themselves aggregate what is ultimately their data, using open standards and interoperable protocols. This way we can connect the disparate ecosystems through which we move when conducting business or living our lives - it is the only truly scalable approach to solving identity.
You involved blockchain technology in your processes. Can you tell more about it?
While we provide a convenient, centralised interface for our customers to access and control their profile, under the hood our platform stores it for them in the form of verifiable credentials - cryptographically signed pieces of structured data based on open W3C standards. These credentials are attached to decentralised identifiers (DIDs), which enable the data subject to prove control of them using their own cryptographic keys. Specialised blockchain networks such as Cheqd, Sovrin, ION and Dock have emerged to enable the distributed storage of these DIDs, acting as a kind of cryptographic phonebook which isn't under the control of any one vendor (including Umazi!). This means that in future, customers can exchange data with entities outside the Umazi ecosystem and still have it be trusted, and should they wish, they can even take custody of their identity wallet and store it on their own infrastructure instead of ours.
How can Artificial Intelligence revolutionize KYC Remediation and Due Diligence processes, and what implications does it hold for your business?
Oh absolutely, and I think this will come about in a few phases. First, AI assistants will automate much of the drudgery and remove potential inaccuracy from the manual tasks which trained compliance experts perform when doing their jobs. Extracting structured data from PDFs, summarising and cross-checking information across sources, and catching errors and omissions are all areas where an AI-enabled tool can help humans running KYC or due diligence processes become more productive. Second, I think we will see AI systems generating new and unique insights based on the ever-increasing data they will have access to as we move to a world of continuous compliance. They will be able to spot counter intuitive anomalies and, in some cases, respond faster to real-time fraud patterns than a human would be able to. We are already seeing lots of "AI powered" risk scoring in the market, but this will be turbo-charged in the coming months and years. Third and perhaps most excitingly, I envisage a world where every business has a "due diligence bot" in their back office just like they have a "customer service bot" on their website, and using a network like Umazi the AI agents representing all kinds of legal entities will be able to converse and exchange appropriate data in order to negotiate trust between them in real-time, without the need for human intervention. That is when we can truly realise our vision of freeing people of the burden of due diligence so they can focus on a more productive business and life.
What KPIs do you establish for your services? How do you measure quality?
Everything we do is focused on alleviating the burden of due diligence, so we look closely at the experience users are having as they use the product. We track sign-ups and repeated use of course - these are key metrics for most SaaS companies - but we're even more interested in how much time and how many attempts it takes a user to accomplish a task, be that requesting data from a partner, creating a company profile, or reviewing and verifying a due diligence report. Traditionally these are complex processes that can take days or even weeks to complete, and we are striving to make them almost instantaneous.
Regulatory compliance can be surprising, resulting in imminent deadlines. Do you face such situations?
Definitely. It is always important to complete these processes as efficiently as possible but never is that truer than when an urgent investigation or remediation must be performed. This is why we have placed such a strong emphasis on a robust but streamlined user interface and enabling continuous compliance with real-time data updates propagating from company profiles. Our intention is that businesses will always be prepared to meet their compliance obligations with a minimum of disruption to their day-to-day operations.
Can you walk us through a recent successful due diligence project your company completed and its impact on the client?
The agency had to rapidly identify, assess, and onboard startups and scaleups to their platform to be analysed. This required thorough background checks and due diligence on the individual entities to ensure any ratings they subsequently gave validated and backed by creditable screening processes. This needed to be done in an automated, streamlined, and cost-effective way to ensure no delay or errors. Once the member organisations had received a rating, their requirements to raise funds, work with suppliers, and engage with accountants and legal firms were critical to their business success. Through Umazi they could use their already created and validated profiles to quickly engage with 3rd party entities, share information, and ultimately help grow their business.
How was your cooperation with FINGO going? How did it start, and what was FINGO's input?
FINGO has been a fantastic partner to work with on this journey. Not only are their staff incredibly hard-working and technically literate, but they really understand the startup mindset and have gelled incredibly well with our team.
Looking back, what is one lesson you wish you had known when you first started the company?
That you can only tackle so many opportunities at once time! The scope of impact we can have with Umazi is so large and touches so many industries. It has been tempting in the past to cast a very wide net with our messaging and client engagements, which has lead to spreading ourselves a bit too thin at times. Today, while our platform can meet the needs of a wide range of businesses that we are very happy to work with, we have really focused our proactive engagements and product development roadmap on the areas where we're seeing the most traction, to enable us to really delight those customers and expand our business further from there.
Looking ahead, what are your plans for the company's future, and how do you see the industry evolving?
Due diligence is a massive problem and represents a truly huge market opportunity across a number of verticals, but going back to our overarching mission, we're here to help businesses grow by fostering more trusted relationships, so I'm sure you will see us tackling a range of pain-points related to this in years to come.