UK-based risk tech company Acin is well on its way to creating a complete front-to-back-office solution to assess and manage operational and non-financial risks after securing $12 million in series A funding, says founder and chief executive officer Paul Ford
Last year was an important one for UK-based risktech company Acin, a data and knowledge-sharing network focused on quantifying, standardising and digitising operational risk, as it embarked on its next stage of growth.
When FinTech Intel last spoke to founder and chief executive officer Paul Ford, Acin had 15 investment banks on its network, including Credit Suisse, Standard Chartered and Société Générale. Set up in 2017 and launched a year later, the regtech company was well placed to “connect financial services firms around operational risk and make the whole business safer”.
Then, of course, Covid-19 happened. Amid a global pandemic, no-one really knew what was coming next. Lockdowns, social distancing, working from home—every day of 2020 brought something new.
Ford predicted that financial organisations around the world would look “for creative ways to cope with their own challenges of managing decentralised teams as social distancing kicks in”. He said: “For many, this will stress the application of their risks and controls definitions in the face of new and un-envisaged scenarios—or ‘unknown unknowns’.”
Acin’s network and the data and peer-sourced insights that the company curates and publishes could prove “key to helping these firms—and the authorities that they answer to”, he continued. It was just a question of making some of those ‘unknowns’ known.
Fast forward to October 2020 and Ford’s predictions were proving correct. Despite the pandemic, Acin was able to raise $12 million in series A funding to spearhead efforts to create a complete front-to-back-office solution to assess and manage operational and non-financial risks. The company has also grown its team from 20 to over 50 colleagues and associates since September 2020.
‘Covid-19 was one big operational risk event’
Ford tells FinTech Intel today: “Covid-19 was one big operational risk event, so there was no longer any need to explain Acin’s role. Everyone we spoke to was experiencing it for themselves.”
Operational risk, unlike credit or market risk, lacks standardisation and digitisation, so it’s weighed and measured on an individual basis, to the best of the ability of each financial services institution in question.
Increasingly, institutions are recognising the importance of their operational risk data, its provenance and integrity—the days of using Microsoft Excel-based solutions are numbered as the value of the data is more fully appreciated.
The pandemic brought home the need for a better way of handling operational risk, through both digitisation and sharing the burden through collaboration.
Acin reacted quickly to the outbreak of Covid-19 in February and March across much of the world. The company was inundated with requests from network members to find out how other firms were coping, so proceeded to publish as much relevant data as possible and deliver intelligence to its network.
Acin also went ahead as planned with a front-end launch in April 2020, given the need for platforms such as its own to be accessed remotely as network members around the world moved staff members off site.
Ford comments: “We have had lots of opportunities to help organisations move along their digital journey and help make everything more secure. For example, a hybrid office and home working model is emerging, requiring technology that can be used and integrated in a number of different ways.”
He adds that the online community that Acin manages has become essential during the pandemic, proving the importance of a network of financial institutions such as its own.
Acin’s series A investors, European software-as-a-service investor Notion Capital and Fitch Ventures, the investment arm of US-based ratings agency Fitch, recognised this importance and were quick to connect with the company once the initial shock of the pandemic wore off.
Conducting such a large fundraise amid a pandemic and restrictions on travel was unusual, Ford says, but not impossible. He found it easier to build rapport with investors than he’d expected.
The whole process, conducted via video conferencing, lacked the personal touch of face-to-face meetings, but it was certainly more efficient, he says.
Investors are bringing more to Acin than just capital investment
Both Notion and Fitch are bringing more to Acin than just capital investment, which will be used to enhance Acin’s cloud-based Terminal solution with additional inventories of risks and controls, extended functionality, software extensions, and integrated benchmarking.
Notion Capital is helping to build Acin as a company and holds a seat on its board. Fitch Ventures, meanwhile, brings significant credit risk expertise, and can offer insights into working with credit risk analysts and experience of turning data into intelligence for the wider market.
Investor interest was reflected in several awards last year. Acin won the RegTech Initiative Award at the UK FinTech Awards in November 2020. The company was also highly commended at the Regulation Asia Awards for Excellence and won Most Innovative Third-Party Technology Vendor—Trading, Risk and Compliance at the American Financial Technology Awards.
Acin plans to “improve and enhance” its investment bank offering in 2021, with a view to adopting a regional approach in the expansion of its network. Ford intends to enter the asset management market in the next 12 months and retail banking after that.
Acin has also explored healthcare as a possible market for its solution, with a proof of concept identifying several similarities with financial services.
Ford says a consultancy firm was commissioned to further explore healthcare as a potential market, “because we now have the backing to take advantage of our momentum”.