Xapien awarded financial crime investigation support by Chartis RiskTech 50 AI

For the second time this year, Chartis has recognised us as a leader in risk and compliance technology by awarding us the Financial Crime Investigation Support and Copilot Award and ranking us #32 in the RiskTech AI 50 2024 report. 

The RiskTech AI 50 report provides organisations with valuable insights and practical advice to make better decisions about risk technology. Produced by a team of risk management and financial services experts, this competitive report looks beyond the AI hype to pinpoint which areas are maturing.

Read on to learn why Xapien stood out from the competition to win this coveted award.

Xapien’s best performance areas

Innovation 

A key focus for Chartis analysts was how we’re disrupting the traditional billion-dollar compliance market, which is burdened with manual and fragmented processes. The analysts recognised that we’re setting a new standard for financial crime investigation support as the only AI tool that uses structured data and unstructured data from the entire indexed internet. 

Traditional compliance checks often depend on screening databases to see if a third party is on a sanctions list or watchlist. But this approach only tells part of the story. There are thousands, if not millions, of entries in compliance databases. Yet, with billions of people worldwide, many might not be listed yet. There’s plenty of information online to anticipate when they might be added or are connected to someone who is. The sheer volume of information just makes it hard for a human researcher to access it all.

Xapien integrates real-time data on PEPs, sanctions, and watchlists from top providers and official registries, including corporate data. It then scans the entire indexed internet in any language. This data gives a clear view of any individual or entity worldwide, highlighting both AML risks and overall reputation.

Another significant pain point we solve is differentiating between individuals and entities with similar names during the due diligence process. It’s something that can waste critical business hours and resources. The analyst praised our Resolve™ disambiguation engine, which uses custom data sets and transfer learning to create unique models that can distinguish between people and entities. This is backed by a powerful neural network that processes the information gathered to make these distinctions. 

Strategy 

Our roadmap is shaped by our customers because we listen to their challenges. For example, The last step in any research process is writing a summary report after combining data from multiple sources. But manually writing a due diligence report can take hours, even a day. The analysts were impressed by how we listened to this and relieved the time pressure. By leveraging Large Language Models (LLMs), our tool creates concise summaries from information gathered by other AI models.

We embedded generative AI due to the rising popularity of GPT technologies, delivering the feature in just 9 months. But a major challenge with LLMs is the risk of generating false information. So, we designed a proprietary anti-hallucination technology to counter this. The analysts recognised that this innovation truly sets us apart from our competitors.

What impressed the analysts even more was that every detail in our summaries (down to each sentence level) is referenced. These summaries underpin a concept we’ve pioneered called Initial Due Diligence. Providing crucial insights early in the process saves the business significant time from investing in the wrong business relationship. Particularly those managing numerous third parties daily. 

Impact 

Another criterion the analysts examined was how our AI positively impacts the use cases it serves. The analysts recognised four major benefits of using Xapien as the initial step in any third-party risk management or financial crime compliance process.

Lower thresholds: Whether it’s suppliers, investors, or clients—most organisations screen everyone. But only a select few undergo deep due diligence, often based on a risk threshold. For example, companies might scrutinise suppliers delivering over $10 million in goods. But what about those just below that threshold? Take a $9 million supplier, for instance. If there’s an issue like modern slavery somewhere in their supply chain, your customers won’t see the difference. They’ll see your company as responsible. Clients who use Xapien often reduce their thresholds significantly. For example, a $10 million threshold might drop to $1 million, or a $1 million threshold might fall to $100,000.  

Early due diligence: Typically, due diligence happens at the end of the decision-making process, but this approach carries risks. By adopting Xapien, compliance teams can screen potential clients, deals, suppliers and other third parties from the start. Instead of the business team starting business relationships and facing compliance issues later, they now get early feedback on whether a third party is worth pursuing. This shift fundamentally changes the dynamic between compliance and the business. Now, compliance can advise from the beginning by recommending where business teams should invest their efforts.

Truly know your customer: At the end of a KYC process, compliance teams are often none the wiser about the client. While they’ve completed the necessary steps, what if they could know their customer on a deeper level? For financial services, an AI tool can be transformative by managing risk more effectively and providing a clearer understanding of customers. But that’s not all. It also empowers relationship managers to serve clients better, fostering stronger relationships and creating new business opportunities. This technology turns due diligence from a compliance task into a chance for growth. 

Reputational management: There’s a growing need for compliance teams to look at third parties not just through AML or ABC risk lens, but also through a reputational lens. Terminology is beginning to shift from “can we” do business with this third party to “should we?” No database can answer that question on its own. It demands thorough due diligence and extensive research—time that most businesses don’t have. This is where AI can make a difference. With Xapien, any business can conduct comprehensive due diligence in minutes, not days, transforming how they assess their counterparts.

Deployment 

A key point from this year’s Chartis Financial Crime and Compliance report was making risk technology more accessible to every organisation. The same principle applies to AI. Not every organisation can afford to overhaul its tech stack or spend hours training staff. That’s why the analyst praised how easy it is to deploy Xapien. As an “out of the box” solution with minimal training needed, Xapien can be up and running in minutes through a simple web portal. No software downloads or changes to current systems needed. 

What’s next?

Innovation drives us to disrupt the traditional compliance market and equip analysts with advanced risk technology to truly know who the firm is doing business with. We’re currently co-developing the world’s first Large Language Model AI tool specifically for AML compliance, supported by a global law firm. Soon, we’ll introduce continuous adverse media monitoring that filters out irrelevant news and highlights what truly matters to your firm.

Why we’re a leading risk technology vendor

The Chartis RiskTech AI 50 isn’t the only award we’ve won this year. We also ranked 33rd in Chartis’s Financial Crime and Compliance 50 for 2024 and won the Entity Management award. This follows our inclusion in the Chartis RiskTech100 2024, which lists the top 100 players in risk and compliance technology worldwide.

Interested in learning more about how Xapien could transform your risk and compliance process? Fill out the form below to speak with our expert team.