June 22, 2022
by Blessing Oyetunde
Co-author and postgraduate student
Did you know there are 213.65 million companies worldwide? So how can one be sure that all businesses and organisations being onboarded to one’s company are legitimate ventures? And not financial crime fronts or linked with fraudulent activities, intentionally or not? It was hard and almost impossible until Vespia and other revolutionising RegTech startups sprung up.
Established in 2020 by former Veriff founding member and RegTech evangelist Julia Ront, Vespia is an innovative AI-powered tool for verifying and onboarding businesses. Upon initiation, the platform quickly scans through over 4000 AML databases and the commercial registers of 300 jurisdictions, providing real-time information on the searched company as well as further recommendations. With the tool, businesses can check various information and data such as AML, beneficial owners (UBOs), ownership structures, and adverse media.
According to Mike Tiffin, Vespia’s business development manager, “identity verification is now straightforward. You take a picture, complete one or two other processes, and you’re done. But it wasn’t always like that. So, what Vespia is doing is similar; making business verification smooth and helping businesses onboard quicker, faster, and easier.” “We’re in the process of becoming the standard for Knowing Your Business (KYB),” Julia added.
Business verification in 30 seconds
Business verification has always been challenging, whether conducting business locally or internationally. Varying jurisdictions with differing regulations and data formats, unclear compliance guidelines, missing, unreliable databases, and lengthy business verification durations were some of the challenges Vespia noticed when they decided to revolutionise the terrain. “The traditional way of doing business verification is that you spend anything from a week to maybe four months to six months researching the companies you intend to onboard. There are some tools you can use here and there to check sanctions and to do identity verification. But there are also limitations; you need to combine different tools and access different databases,” Julia pointed out.
“Aside from that, you actually need to communicate with the businesses, back and forth emailing, ‘send us this document. Oh, not this document, a new one’ even before the verification. But with Vespia, you can do all that fully automated, and we cover all aspects of the business verification process in one place,” she continued. According to her, the traditional way of doing business verification takes a lot of time, but Vespia does it in 30 seconds. The average cost is anything from 150 to 20,000 euros; 20,000 euros! if you hire an auditing team to do it. Meanwhile, Vespia is 37 times cheaper.
A nimble frame for convenience
Realising that modular platforms offer the best access to flexibility and adaptability in this era so characterised by disruption and unpredictability, most businesses won’t settle for less. Aware of this, Vespia was designed as agile as possible to meet the needs of users. Companies can verify their customers using Vespia’s one-click business verification dashboard or by integrating it with their existing systems.
“We built Vespia in a modular way so you can switch certain modules off as you want and build your own flow. Another thing is that many companies are already using something for AML, maybe for their sanctions lists or identity verification. We saw that it’s a huge pain for many companies to switch because they have already committed to some programme and need to wait for that contract to end before switching. But with us, you don’t need to switch. We can integrate it with your existing system; we can turn certain things off, and we can rearrange it,” Julia stated.
The global business register
She highlighted that one of the biggest challenges they faced while setting up Vespia was the many existing gaps regarding company profiles and data. These gaps ended up spurring the Vespia global business register, which is to be a digital house for verified profiles of companies all around the world. “We saw that the existing registers and databases are lacking data. Meanwhile, companies are not motivated to provide ample information there either. So we are building this new system, where we want to include the companies in the verification process and let them earn rewards for providing more data on their profiles.”
She also explained that aside from the companies wanting to do the onboarding, the current system is just as unfavourable and inconvenient for the companies wishing to be onboarded. To this end, they want to issue digital identity passports to companies, something they can readily show wherever and whenever there’s a need for verification. Furthermore, Julia pointed out that currently, businesses never know who is viewing their profile. But with the digital identity, they would be able to monitor and control the visibility and accessibility of their data. The financing from their seed round closing in August will be towards developing these solutions. “The seed is between 3-5 million, and we already have some committed investors, but there is still room for more angels,” she disclosed.
Always on the improvement and collaboration watch
Like any forward-looking business, Vespia is keen on constant improvement and innovation, whether through in-house product development or partnerships. Julia disclosed that they have numerous requests from clients wanting them to introduce some specific features and solutions, and they are open to them. Likewise, she expressed their interest in collaborating with KYC solution providers. “We’re already working with a few solutions partners but always open to expanding that. We actually would like to cooperate with KYC solutions providers because it takes a lot of resources to build a business verification solution,” she said.
Mike also noted that he hopes more Estonian companies collaborate. “Everyone has a slightly different speciality. Salv is very much into transactions and a lot of intelligence and big data, mainly dealing with bigger financial institutions. Veriff is into identity verification and does that really well. But actually, if we collaborate, and this is something I wish Estonian companies would do more of because together we are stronger, we’ll achieve much more.”
Where’s RegTech headed?
Vespia is disrupting RegTech, an industry still trying to come out of the shadow of its older and more famous sibling, FinTech. Probably now, RegTech might start receiving the attention it truly deserves. Julia does see great potential here. According to her, “At Vespia, we see RegTech becoming more than just about anti-money laundering and more about trust in numerous sectors. We see it expanding to other sectors and coming out of the shadow of FinTech and finance in general.” That carries weight because, according to ReportLinker, the global RegTech market size is expected to reach $22.3 billion by 2027.
Julia noted that although there has yet to be anything incredibly revolutionary in RegTech, they plan to change that. “We at Vespia are preparing to become that big thing here,” she stated. Meanwhile, their heart is in the right place too. “Small businesses and startups are usually of small teams and often don’t have a compliance department or people who fully understand compliance. We are striving to make compliance smooth and uncomplicated for them,” she stated.
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Resource: e-estonia
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