The security checkpoint

Imagine, that instead of working in compliance, you’re overseeing security protocols at a large international airport.

Your team cannot scrutinise everybody equally. It’s simply too busy. Some passengers will only go through a scanner, and others get a more thorough check. Your staff is trained to know what to watch for. They know who needs more of their attention:

• a nervous businessman with a one-way ticket to a high risk country
• a tourist with unusually heavy suitcase
• a frequent flyer, whose travel plans suddenly change

Any disruption to common patterns is potentially a red flag. The tiered screening system, where everyone goes through a basic screening, but more resources are allocated to those flagged by risk indicators, allows for thorough security - while maintaining operational efficiency.

There’s no chaos.

In any AML- regulated industry, you’re facing an almost identical challenge: how to vet customers without bogging down operations. Everybody gets baseline checks, and then you start looking deeper:

• a small business suddenly transferring large sums internationally?
• a politician from a country known for corruption?
• a small business suddenly transferring large sums outside of the country?
• a long time customer whose transaction patterns change for seemingly no reason?

This part isn’t just about ticking off boxes anymore. You’re building a detailed picture of each customer, adjusting the level of scrutiny based on the risk they can potentially pose.

This is a dynamic process, and a customer who started off as a low-risk can climb the risk ladder as their behaviour changes.

Striking the balance between the efficiency and thoroughness is at the heart of risk-based KYC. Maintaining strong security requires managing your resources well and this approach allows you to allocate them where the risk level demands it.

The future of KYC is automated

Of course, compliance officers must be extremely adept at identifying potential financial risks, just as airport security are trained to spot suspicious behaviour. Robust systems and well trained staff are the backbone of the implementation of risk-based KYC.

But there’s one more thing that can play a significant role and greatly improve the efficiency of the process, where the challenge lies in being both thorough and efficient.

Technology.

What if the security at the airport had a super-intelligent assistant, that could process information about every single passenger in a blink of an eye?

That's essentially what automated KYC systems are doing for AML-regulated entities.

They’re compliance experts working continuously around the clock. They're analysing large amounts of data, cross-referencing information, and identifying potential risks much faster than any manual process.

When a new customer begins the onboarding process, the automated KYC system starts working. It's not just verifying basic information, but it’s searching databases, examining documents, and in some cases, analysing biometric data. It's creating a comprehensive profile of the customer in a matter of moments. The system doesn't stop after the initial check. It's monitoring for any changes in your customer's behaviour or circumstances that might increase their risk level.

It can verify identities, check against sanctions lists, and analyse transaction patterns in a fraction of the time it would take a human operator.

This speed can significantly reduce onboarding times and improve the customer experience.

Efficiency however doesn’t come at the cost of thoroughness.

Automated KYC systems use advanced algorithms to comprehensively assess the risk. Human reviewers - being human - might miss some very subtle risk indicators, that a system that’s analysing a wide range of data points won’t. The system can continually monitor customer behaviour, flagging changes that could indicate increased risk. This ongoing assessment ensures thoroughness isn't sacrificed for speed.

Refining the balance

Can the automation replace the human oversight then? Despite the leverage it gives to the compliance teams, it’s unlikely this would happen anytime soon.

What it most definitely can do, is to help allocate human resources more effectively. Low-risk cases can be processed quickly, freeing up compliance officers to focus their expertise on complex, high-risk cases that require the level of judgement that only comes with professional experience.

This approach, of a tiered system of due diligence, it’s similar to our airport security analogy: most customers, like most passengers, can pass through the basic process. When the system flags a potential risk, it triggers a more through review.

What is the key to maintain the balance between efficiency and thoroughness then?

Refinement.

• Risk assessment criteria need regular updating to reflect new threats and regulatory changes. The financial world is not static, and neither should be the rules that govern it.
• System performance requires constant monitoring. False positives and false negatives should be carefully analysed to improve accuracy. This feedback loop helps the system learn and adapt over time.
• Data quality must be maintained- any system can only be as good as the information it processes. Ensuring data accuracy and completeness is important for both efficiency and thoroughness.
• Staff training is crucial. The compliance team needs to stay updated on how to interpret and act on the information it provides.
• Also audits and reviews of the entire process help identify areas for improvement. This includes assessing how well the automated system integrates with human decision-making processes.

At the gate

Airports aim to keep passengers safe without causing excessive delays, and in the same way, compliance officers aim to prevent financial crime while providing smooth service to legitimate customers.

Advanced scanning technology at airports quickly processes most travellers, flagging only potential risks for closer inspection - AML-regulated companies can now use comparable smart systems to simplify and enhance customer onboarding and monitoring.

Both systems require ongoing refinement to remain effective.

The airport security has to constantly adapt to new risks - financial threats and regulations change, so the KYC process must also be fine-tuned.

This ongoing improvement and refinement is a balancing act between speed and thoroughness.

You’re reaching your departure gate after passing through security.

If the process was smooth, you're relaxed and on time.

This is the goal of efficient KYC - customers clearing checks swiftly can access financial services without stress.

However, just as airport security must catch real threats, KYC must thoroughly identify high-risk cases.

Automated KYC systems help strike this balance.

When done right, this balanced approach creates a financial system that's secure yet accessible - much like an airport that's safe but still gets you to your gate on time.

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Anti-Money Laundering (AML) compliance presents ongoing challenges for regulated businesses: verifying clients, managing risk, and meeting regulatory requirements without overwhelming paperwork or operational slowdowns. Two key approaches are used to address these issues: Know Your Customer (KYC) and Know Your Business (KYB). Which of these two you employ depends on the nature of your business and your client base. Many organisations need to implement both KYC and KYB processes to fully meet their compliance obligations.

Common pain points in AML compliance

AML regulated businesses often face these key challenges:

1. Slow onboarding: Client due diligence can delay business operations.
2. Resource intensive: Compliance tasks often require significant staff time, diverting resources from core business activities.
3. Changing regulations: Keeping up with AML regulations across different jurisdictions requires constant attention.
4. Non-compliance risks: Failing to meet AML requirements can result in large fines and reputational damage.
5. Excessive flagging: Over-cautious screening can delay legitimate clients unnecessarily.
6. Information gaps: Traditional checks may miss key information, especially for complex business structures.
7. Human error: Manual processes can lead to mistakes that compromise compliance efforts.

Understanding KYC: Know Your Customer

KYC verifies the identity of individual customers. It's a key part of customer due diligence (CDD) used across many industries, especially in financial services.

Key aspects of KYC:

1. Individual focus: KYC deals with personal customers.
2. Identity verification: Confirms a person's identity using documents like passports or driver's licenses.
3. Personal background checks: May include credit history, employment verification, and sanctions list screening.
4. Ongoing monitoring: Requires continuous tracking of customer activities and transactions.

Common KYC users:

• Banks and financial institutions
• Insurance companies
• Cryptocurrency exchanges
• Online gambling platforms
• Some retail and e-commerce businesses

Understanding KYB: Know Your Business

KYB verifies and analyses the businesses you work with. It's crucial for B2B relationships and AML regulated entities dealing with corporate clients.

Key aspects of KYB:

1. Business entity focus: KYB examines companies, partnerships, and other business structures.
2. Company verification: Confirms a business's legal existence, registration details, and operational status.
3. Ownership structure analysis: Investigates who owns and controls the business, including ultimate beneficial owners (UBOs).
4. Business activity assessment: Examines the business's operations, industry, and typical transaction patterns.
5. Risk profiling: Evaluates potential risks associated with the business, including jurisdictional and industry-specific factors.
6. Ongoing monitoring: Tracks changes in ownership, business activities, or risk profiles over time.

Common KYB users:

• Law firms
• Accounting firms
• Corporate banking
• Business lending institutions
• Payment service providers
• Professional services firms
• Commercial real estate agencies

How automated KYB addresses AML compliance pain points

Streamlined onboarding for complex clients: Business clients often have intricate structures that can slow down the onboarding process. KYB employs streamlined verification processes specifically designed for business entities. This can significantly reduce onboarding times, sometimes from weeks to days, without compromising on thoroughness.

Enhanced risk assessment: Traditional checks might miss crucial information about business clients. KYB provides a more complete picture by analysing business structures, activities, and associations in detail. This thorough approach leads to more accurate risk assessments, helping businesses make informed decisions.

Reduction in false positives: Overzealous screening often flags legitimate clients, causing unnecessary delays. KYB's nuanced understanding of business clients enables more accurate risk scoring. This precision helps reduce false alarms, allowing businesses to focus on genuine risks while processing legitimate clients more efficiently.

Alignment with evolving regulations: AML regulations are constantly changing, and recent trends emphasise understanding business clients and their ownership structures. KYB naturally aligns with these regulatory directions, helping businesses stay compliant with current and emerging requirements.

Optimised resource allocation: Compliance tasks can drain significant staff time from core business activities. KYB leverages automated processes for business verification and monitoring. This automation frees up staff to focus on higher-value work, improving overall operational efficiency.

Effective ongoing monitoring: Tracking changes in client status over time can be challenging. KYB systems typically include automated alerts for changes in business status, ownership, or risk profile. This ongoing monitoring helps businesses stay on top of changes without constant manual checks.

Clarity on complex ownership structures: Identifying ultimate beneficial owners (UBOs) in complex business structures is often difficult. KYB provides tools for mapping and analysing these structures, making UBO identification more straightforward and accurate.

Core needs of AML regulated businesses

AML regulated businesses aim to:

1. Verify clients efficiently and thoroughly
2. Assess and manage risks accurately
3. Maintain compliance without excessive resource use
4. Quickly adapt to regulatory changes
5. Minimise compliance-related business disruptions
6. Build trust with regulators and clients

KYB helps regulated entities meet these needs by providing a thorough and efficient approach to business client due diligence. This enables AML regulated businesses to fulfill compliance obligations without sacrificing efficiency or growth opportunities.

The value of knowing your business

Understanding clients deeply is essential in today's business environment. KYC remains valuable for individual customer relationships, but KYB provides a more thorough solution for AML regulated businesses primarily dealing with corporate clients.

By tackling key pain points and helping businesses meet their core compliance needs, KYB allows regulated entities to:

• Onboard clients faster and more confidently
• Make decisions based on thorough risk assessments
• Use resources more efficiently
• Anticipate and meet regulatory requirements
• Develop stronger, more trusted business client relationships

As AML regulations and business structures become more complex, the ability to truly "know your business" grows increasingly important. KYB approaches and technologies can help AML regulated businesses turn compliance into a competitive advantage, supporting growth while upholding high standards of integrity and risk management.

Exploring automated KYB solutions could help you tackle your key pain points and meet your compliance goals more effectively.

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Organisations in AML-regulated industries need to gauge how well they're building a culture of compliance. This matters for meeting regulations, managing risks, and keeping clients' trust.

To assess the effectiveness of a compliance culture, a combination of quantitative and qualitative metrics can be used:

Quantitative metrics

• Mean time to issue discovery (MTTD):
  this measures how quickly compliance issues are identified within the organisation.
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• Mean time to issue resolution (MTTR):
  this tracks how long it takes to resolve compliance issues once discovered.
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• Compliance expense per issue:
  calculated by dividing the total fines received for compliance violations by the number of issues handled by the compliance department.
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• Average cost of compliance-related lawsuits:
  this metric helps assess the financial impact of compliance failures.
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• Regulatory compliance rate
  measures the adherence to applicable laws and regulations.
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• Training completion rates:
  tracks employee participation in compliance training programs.
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• Number of whistleblower reports:
  monitors the frequency of internal reporting of potential compliance issues.
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• Cost of compliance:
  assesses the financial resources allocated to compliance activities.
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• KYC accuracy rate:
  measure the percentage of KYC checks completed without errors or omissions.
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• Time to complete KYC processes:
  track the average time taken to complete KYC checks and how it changes with the automated system.
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• System adoption rate:
  monitor how quickly and thoroughly employees adopt new automated KYC systems.
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• Client onboarding time:
  measure changes in client onboarding time as compliance processes improve.

Qualitative metrics

• Ethics and integrity index:
  measures employee perceptions of the organisation's ethical culture and leadership behaviour.
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• Compliance risk assessment results:
  evaluates the firm's ability to identify and mitigate compliance risks.
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• Employee knowledge and understanding:
  surveys that measure employees' comprehension of compliance policies and procedures.
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• Cultural beliefs and values:
  surveys focusing on the overall compliance culture and employee attitudes.
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• Leadership assessments:
  evaluate how well leaders model and communicate compliance expectations.
  ‍
• Client feedback:
  gather client opinions on the organisation's compliance practices and how they perceive the firm's commitment to integrity.
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• Case studies:
  analyse specific instances where strong compliance culture prevented issues or led to positive outcomes.

Survey-based metrics

Many organisations use compliance culture surveys to gather data on:

• Employee attitudes and perceptions regarding compliance
• Workforce understanding of compliance policies
• Effectiveness of compliance communication and training
• Leadership commitment to compliance as perceived by employees

These metrics provide a comprehensive view of a firm's compliance culture, allowing for benchmarking against internal historical data, industry peers, and national averages. Regular measurement and analysis of these indicators can help organisations identify areas for improvement and demonstrate the effectiveness of their compliance programs.

Better compliance with automated KYC systems

By combining automated KYC systems with these metrics, AML-regulated businesses can:

1. Track improvements in compliance processes over time
2. Identify areas where additional training or resources may be needed
3. Demonstrate the value of compliance initiatives to leadership and stakeholders
4. Create a data-driven approach to enhancing compliance culture

Regular review and analysis of these metrics can guide the organisation's efforts to strengthen its compliance culture and ensure that automated KYC systems are delivering the intended benefits.

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Both the legal and financial industries are experiencing a significant shift in how Know Your Customer (KYC) processes are managed.

Manual methods, once a standard, are being replaced by automated systems. This change comes from increased global business, more regulations, and complex financial crime.

Clients want faster service.

Regulators impose large fines for mistakes.

Automated KYC systems offer a way to address these issues.

Considering the shift from manual to automated KYC processes? This guide helps you evaluate your current methods against the potential of automation.

Estimate how much time you spend:

When you get a new client

How long does it take for one of you to:

• Write an email/ ring and ask for information?
• Follow up (if the client doesn't reply)?
• Check ID?
• Check PEP status?
• Check for sanctions/adverse media?
• Make the matter and client risk assessment?
• Store the information in the correct location?

What is the salary of the person that executes these tasks?

If it's a corporate client:

• Do everything mentioned above to verify the beneficial owners?
• Make sure that you know all the beneficial owners?
• Verify the company information in official registers?
• Check the company for sanctions/adverse media?

And what does it require from your clients?

Consider the client's perspective:

• Multiple requests for information, often redundant
• Lengthy wait times during the onboarding process
• Frustration with repeated follow-ups
• Potential loss of business opportunities due to delays
• Confusion about the extent of information required
• Concerns about data privacy and security

To ensure that these steps are being followed:

• Ongoing monitoring of your clients?
• That the manual procedures are updated on a regular basis?
• Ongoing control of the manual procedures?
• Correct documentation of risk assessments when the relationship is initiated and if it changes?
• That verification of data can be documented?
• An overview of all your clients' risk profiles
• An overview of the number of clients that are PEP
• That all client relations have been approved
• That you know and remember when you need to re-verify your clients' data
• That there isn't any personal information on clients saved in emails?
• That all client data is archived and timely deleted
• That you know exactly who has access to what information and can document who has or has had access.
• That you can tell your clients which data you handle and why.

How likely is it that you'll make a mistake or forget a step when you are busy?

When there is an audit

• How much time do you need to prepare for an audit when you have to document what you do and the evidence is lying in emails and folders of various colleagues?
• Can you pull a list with the client overview that the authorities require at an audit? List of high, medium and low risk, different jurisdictions etc.
• Can you provide that data on the clients that are selected for control?

Now that we are at it, have you remembered to make your Firm-wide risk assessment and document your policies and procedures? - if it isn't written down and reviewed annually, then it doesn't count.

What tasks could you spend your time on instead?

Consider the consequences

If your clients aren't satisfied

• How many will choose another firm where the client onboarding is easier?

If you don't pass an audit

• What will it mean for your reputation, if you get a sanction, a fine and that it is publicly known?
• A sanction can also result in your company being put on public risk lists and then your business partners will require an enhanced AML control of your company before they can work with you.

If it goes all wrong

• What will it mean if the criminals get hold of you and you unknowingly participate in money laundering and/or terrorist financing?
• How big a fine will you get?
• What will it mean to your reputation?
• Who of you will in the worst case risk going to jail, if your policies, procedures and controls aren't good enough?

The benefits of an automated KYC system

✓ Increase onboarding conversion rates by 60%
✓ Reduce the costs of running AML compliance operations by 75%
✓ Improve your compliance team productivity 3-4 times on average
✓ Give your clients a good first impression with a professional onboarding
✓ Stop the criminals, avoid fines and stay GDPR and AML compliant

Automated systems cut time spent on repetitive tasks. This frees your team to focus on complex risk assessments and strategic compliance planning. KYC policies are applied consistently, with real-time updates and comprehensive audit trails.

These systems boost your defence against financial crime. They generate audit trails for regulatory inspections and detect suspicious activities faster through real-time monitoring. This limits criminal exploitation, protects your reputation, and helps avoid regulatory penalties.

Your team can concentrate on high-risk cases and compliance planning. KYC policies are applied uniformly across all clients, reducing human error—a common audit issue. As regulatory scrutiny and fines increase, automated KYC strengthens risk management and maintains smooth operations.

Consider how automation could enhance your workflows, improve accuracy, and boost your team's ability to meet growing regulatory demands.

Not sure if an automated KYC system is right for you? Contact us. We're here to advise based on your specific needs.

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For law firms, a strong compliance culture means ethical behaviour becomes standard practice in all operations. Automated know your customer (KYC) systems play a key role in developing this culture, helping to ensure integrity across the firm's activities.

The compliance culture challenge

Many law firms find it difficult to create a widespread compliance mindset. This frequently stems from several common obstacles:

• Perceiving compliance as a burden rather than a core value
• Inconsistent application of KYC procedures across departments
• Limited understanding about the importance of thorough client due diligence
• Resistance to change from traditional manual processes (“but we’ve always done it this way”)

How automated KYC enhances compliance culture

1. Standardisation across the firm
   Automated KYC systems enforce consistent procedures for all clients, regardless of which solicitor or department handles the case. This uniformity reinforces the idea that compliance is a firm-wide responsibility, not just the job of a dedicated compliance team.
2. Increased transparency
   With centralised data and clear audit trails, automated KYC makes compliance efforts visible throughout the organisation. This transparency helps emphasise the importance of these processes to all staff.
3. Empowering employees
   User-friendly automated systems give employees the tools to perform KYC tasks efficiently and accurately. This empowerment can increase engagement with compliance processes and reduce the perception of KYC as a difficult task.
4. Facilitating ongoing education
   Many automated KYC systems include built-in guidance and updates on regulatory requirements. This feature supports continuous learning about compliance, keeping it at the forefront of employees' minds.
5. Demonstrating firm commitment
   Investment in advanced KYC technology communicates the firm's dedication to compliance. This visible commitment can help change attitudes throughout the organisation.

Implementing a compliance-focused culture

1. Leadership buy-in
   Managing partners must champion the importance of compliance and the role of automated KYC in achieving it. Regular communications from leadership about compliance successes and challenges can reinforce its priority.
2. Comprehensive training
   Beyond teaching the mechanics of the KYC system, training should emphasise why compliance matters. Include real-world scenarios and consequences of non-compliance to emphasise its importance.
3. Performance metrics
   ‍Include compliance-related goals in employee performance reviews. This could involve metrics on KYC accuracy, timeliness, or participation in training sessions.
4. Open dialogue
   ‍Create channels for staff to discuss compliance challenges and suggest improvements. This collaborative approach can increase buy-in and identify practical ways to enhance processes.
5. Celebrating successes
   Recognise and reward employees who excel in compliance-related tasks or who suggest valuable improvements to KYC processes.

The wider impact of strong compliance culture

A robust compliance culture, supported by automated KYC, extends beyond regulatory adherence:

• Client trust: clients appreciate firms that take their compliance obligations seriously, viewing it as a sign of overall professionalism and reliability.
• Risk reduction: a compliance-focused culture helps identify and address potential issues before they become serious problems.
• Mitigating financial crime risks: strong compliance practices minimise the risk of the firm unwittingly participating in money laundering and terror financing, or failing an audit.
• Competitive edge: firms known for strong compliance cultures may attract clients who prioritise ethical business practices.
• Employee satisfaction: clear processes and the right tools can reduce stress associated with compliance tasks, improving job satisfaction.

Automated KYC. Driving cultural change

Implementing an automated KYC system can serve as a catalyst for broader cultural change within a law firm. By improving processes, ensuring consistency, and providing data-driven insights, these systems make compliance more tangible and manageable for all staff.

The move to automated KYC isn't just a technological upgrade—it's a step towards a more integrity-driven organisational culture.

In today's regulatory environment, this cultural shift is becoming essential for law firms aiming to succeed and maintain their reputation in the long term.

Creating a culture of compliance requires time and effort, but with the support of automated KYC systems, law firms can build an environment where integrity and regulatory adherence guide every action and decision.

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Meo accelerates European expansion with launch in Austria

Today, we're thrilled to announce that Meo is expanding into the Austrian market through a partnership with Compass-Gruppe. This move marks a significant milestone as we continue our mission to help our customers set new standards in compliance operations globally.

We're also excited to welcome Steffen Bilde, our former Chief Product & Technical Officer, as Meo’s new CEO. Steffen’s leadership will usher in a new phase of growth as we prepare to introduce even more advanced digital compliance solutions across markets.

Partnership with Compass-Gruppe

Our partnership with Compass-Gruppe is a key highlight of this expansion. Compass-Gruppe is the leading provider of business information in Austria and has been supplying companies and institutions with reliable and up-to-date data for 157 years.

"This partnership allows us to offer unique Austrian company and ownership data, streamlining operations for compliance teams and enhancing their efficiency," says Steffen Bilde, CEO at Meo.

Why Austria?

Austria is a natural fit for our growth ambitions due to its strong adherence to EU AML regulations and proactive adoption of digital compliance solutions. This market presents a robust opportunity for Meo to demonstrate our capabilities and expand our footprint.

With our entry into Austria, Meo now operates in five EU countries, reinforcing our dedication to providing tailored compliance solutions internationally.

Welcoming Steffen Bilde as our new CEO

Steffen Bilde brings a wealth of expertise from his previous roles at Dixa and Coinify, where he led product and customer-driven growth. We are excited to embark on this next chapter of our journey under his leadership.

"Steffen’s extensive experience is invaluable as we continue to innovate and enhance our platform for compliance teams," says Lars Jensen, Chairperson of the Board at Meo. "His ability to balance perfecting products with timely delivery, along with his deep customer focus and leadership across all organizational levels, will drive our next phase of growth."

About us

Meo is a modern operating system for compliance teams in AML-regulated businesses. Our end-to-end platform for KYC and KYB enhances compliance capabilities for B2B clients in the legal and financial services sectors. Founded in 2017, our mission is to simplify complex regulatory landscapes into manageable, user-friendly solutions, fostering safer business operations.

Stay tuned for more updates as we continue to grow and innovate!

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