CEO INTERVIEW THE FINTECH TIMES
COLLABORATION INCOMPLIANCE The Fintech Times meets Evgeny Likhoded, founder and CEO of regtech Clausematch, to hear how technology is playing a transformative role in the compliance sector
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he regtech industry has experienced rapid growth over the last two years with the pandemic driving demand for innovative solutions to improve collaboration and boost efficiency. Outdated processes and legacy technology previously enjoyed by financial institutions are proving to be unsuitable to meet the heavy demands of today’s regulatory landscape. Clausematch is a global compliance technology company helping both startups and leading financial institutions standardise and automate their processes and workflows in order to manage governance and compliance risks. Its AI-powered software as a service (SaaS) platform is live with top-tier banks, including Barclays, enabling teams to collaborate on documents faster and more efficiently. The company was founded in 2012 by Evgeny Likhoded. After studying law at the University of Exeter and Université de Rennes, Likhoded worked in the European legal and compliance departments of an energy utility and investment bank Morgan Stanley before spotting the need to improve ways that companies can understand and meet their compliance obligations and ensure that compliance is embedded into their business. The Fintech Times recently caught up with Likhoded shortly after he’d participated in a panel discussion on how regulators can encourage regtech adoption at the Innovate Finance Global Summit in London in April. TFT: Tell me a little about
Clausematch and how it helps financial institutions. EL: I started Clausematch about nine years ago, and at the time my idea came from working in large financial institutions or generally large companies creating a lot of documents and a lot of data, which would be very important for regulators and for compliance 10
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departments. But the way we managed that data or that content hadn’t changed in 20 years. If writing an anti-money laundering policy, I would be opening a Word document and creating a policy and sending it to review to 20 or 30 people. They came back with comments and then I would have to do that every year. Ultimately, it results in a PDF document which is then distributed to employees by email or via a document storage system but there would be no track record of why this document exists in this form, who has read it, who has attested to it, or whether it is compliant with regulation or not – all of that valuable data is lost. My idea was that we need to rethink how we create that content, and we need to rethink how we collaborate in a way that is favourable to regulators. At the core of Clausematch is real time content collaboration. So, instead of working on a Word document and sending it via emails, it kind of looks like Google Docs, but it’s specifically adapted for compliance workflow, compliance departments and with an audit trail. It is also a way to communicate to employees via a centralised portal, and to track engagement with your compliance content. TFT: In December 2021, Clausematch
was voted one of the world’s most innovative regtech companies. What do you think you do that stands apart from others? EL: We have managed to become quite a unique company with a unique solution because of the way we help people collaborate in real time, in a compliant way. At the time, when we started working on this cloud-based content collaboration editor working in real time, only Google really had that approach, so it was a daunting task and there still aren’t many companies doing this, because it takes years to actually build it. We have invested time and we have invested into technology, so we’re actually quite far apart from competitors. Because
we believe that regulations will become digital, then it will be much easier to track regulatory change and we are already providing this solution to implement that change internally within an organisation. That’s why we’re often partnering rather than competing with a lot of solutions on the market. We’ve seen that where there is a project and the need for a financial institution or even fintech they haven’t really been competing because we’re quite set apart. There’s been a shift from using one big incumbent solution for everything in compliance and regulatory change, to an approach of trying to pick the best solutions and then integrate them. So, there’s a great demand from our clients for us to integrate with other solutions.
“THERE’S BEEN A SHIFT FROM USING ONE BIG INCUMBENT SOLUTION FOR EVERYTHING IN COMPLIANCE AND REGULATORY CHANGE, TO AN APPROACH OF TRYING TO PICK THE BEST SOLUTIONS AND THEN INTEGRATE THEM” TFT: The last few years has seen
a big upheaval that has led to the introduction of more regulation and changes. What would you say are the current hot talking points? EL: There are a lot of topics that banks and financial institutions and other industries are trying to address. Environment, social and governance (ESG) this year is obviously massive and is only going to become bigger. Then we also have the current financial sanctions regime and what’s happening now in the political arena is changing what’s required to be compliant. It’s changing not just from the compliance point of view, but from a reputational point of
view as well because reputationally companies are now looking at their supply chain, they’re looking at how they’re viewed by their employees, by their customers or by their suppliers and it’s become very important because generally employees want to work for the companies that are driving ESG adoption even without the regulatory push. Supply chains have to adopt ESG regulations and ESG standards, because their customers and big banks are forcing them to do so. Then, there is a whole other part of financial services that is emerging, crypto regulation where there is a lot to talk about but, ultimately, we’re going to see a lot of change. Where there is regulation, there is also the ability for big players in the market to participate. TFT: How would you describe your
leadership style and the culture you have implemented at Clausematch? EL: My leadership style is to lead by consensus. In the last few months, I’ve built out a leadership team, where we work together collaboratively and made decisions as a unit. In general, our culture within the company has always been gratitude, empathy and working together towards a common goal and putting clients first. We have some long-standing team members at Clausematch, who joined the company right in the beginning and they’re still here, which is great to see. When you’ve got people who stay in the company, especially in tech positions which typically has a much higher turnaround, it says something. TFT: Tell us something about you and
what you enjoy doing out of work? EL: While I became a lawyer, my true passion has always been technology and that’s the reason why the idea of Clausematch came about – because I understood what the problems were and also how that conservative technology worked. But, in my free time, I’ve got a little pet project, which is that my entire home is automated. When automating
