Delta Capita bolsters KYC services with JJCFinTech partnership

21 March 2019 Consultancy.uk

Business & technology consulting firm Delta Capita has agreed a partnership with London-based FinTech firm JJCFinTech. The deal sees the two players collaborate on a range of regulation and compliance topics in the financial services industry.

At a time when the regulatory burden on financial services is growing fast, long-term market incumbents are facing new tech-savvy competition eating into their market share, as new entrants are able to comply to new rules in a more agile way, while also using this as an opportunity to improve their services. Know Your Customer (KYC), for example, can take up to two days to comply with at a traditional bank, but at challenger banks it takes place in minutes. As a result, banks now need to combine compliance with customer service – something driving demand for consulting services in the sector.

Delta Capita is headquartered in London. The consulting firm, which was recently ranked as the fastest growing FS consultancy in Europe according to the 2018 Financial Times 1000 index, is dedicated to the financial services industry, and serves clients from offices across Europe, Asia and Africa. As it looks to improve its KYC services for its clients, the firm has joined forces with JJCFinTech to form a joint venture on the matter. Under the arrangement, JJCFinTech has become a JV partner to Delta Capita’s KYC services business – first established through its strategic alliance with Fenergo.

Delta Capita bolsters KYC services with JJCFinTech partnership

Commenting on the news, Joe Channer, CEO of Delta Capita, said, “The collaboration brings additional expertise and acceleration to our KYC services business. JJCFinTech’s experience in the KYC space is unrivalled, with their knowledge and contribution to the strategic direction and management of the business, we are positioning ourselves for success.”

The combined service created by the partnership represents a CLM, robotic data sourcing, Screening, Analytics and Transaction Monitoring solution in one coherent ecosystem. As a result, Delta Capita clients will be able to avoids huge investments and the long lead times involved in forging such a chain for themselves. Delta Capita’s pre-integrated platform and managed service operations will instead allow clients to quickly address the pain points in their KYC and AML processes to improve compliance, digitise the customer journey and optimise their operations and technology in a commercially attractive way.

Channer added, “Banks can no longer afford to act in a proprietary way when investing in non-differentiating common functions such as KYC. Delta Capita’s KYC service offering gives Clients access to an industry standard platform powered by leading technology on an outsourced operating model. Unlike other market offerings we are looking to provide a complete end-to-end solution that really takes the management burden and complexity away from the client. We achieve this by providing compliance as a service, with flexibility to scale and ability to reduce cost through platform mutualisation.”

New partnership

As part of the agreement, Jon May, JJCFinTech CEO has joined Delta Capita’s KYC business Board of Directors as COO. May is a regulatory compliance expert who previously held the role of CEO at KYC.com, MD Group Head, Regulatory & Compliance Services at IHS Markit, and prior to that, several senior roles at Goldman Sachs including MD Global Head of Client Onboarding and Client Data.

Commenting on the partnership, May said, “This partnership offers something different to firms that are looking to transform their KYC/AML operations and technology without the burden of bringing together the components themselves. Our managed service solution is a pragmatic approach aimed at banks and investment firms that want a standardised platform quickly. We are blending JJC’s practical experience of having run KYC/AML functions at the industry’s leading banks, with Delta Capita’s strong track record of delivering and operating managed services for tier 1 firms and the Plato consortium.”

Delta Capita have been significantly investing in expanding their managed service product offerings in the areas of KYC, Pricing & Risk Valuation and Securities Finance, since their successful lift out of Credit Suisse’s Structured Products EMEA platform in 2017, which now services several banks under a managed service model. It has also been leveraging acquisitions to boost its securities finance offering, recently purchasing consultancy The Field Effect.

Related: Tackling financial and economic crime through banking collaboration.

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Private equity firms ramp up sustainability focus

19 April 2019 Consultancy.uk

In line with business leaders across the industrial gamut, private equity firms are increasingly on board with sustainability projects. According to a new study, the investment arms for major funds are implementing a number of strategies aimed at supporting sustainable economic development in line with global goals.

While the business world has finally begun to acknowledge the danger of climate change, effective action plans remain difficult to achieve. The Paris Agreement has stipulated a clear target for the decades leading up to 2100, although massively reducing emissions while not crashing the economy could be a tall order.

Businesses that are able to acquire capital can use it to boost productivity and output, thereby creating a virtuous cycle of development. However, some businesses are better able to utilise resources than others, both in terms of their relative productivity, as well as the value of the respective outcomes relative to costs (including environmental harms). Financing can therefore provide an avenue to select businesses that are aligned with various global sustainability goals, while shunning those that drive little or unsustainable social value creation.

Top moves made by investment arms towards responsible investment

Profit has for the longest time been the central criterion for investment decisions. Yet profit at any cost is increasingly seen as creating considerable social harms, while often delivering only marginal value. As a result, the private equity sector, which was initially sluggish to change its ways with regards to sustainability, has started to see the topic as an opportunity as much as a challenge.

A new study from PwC has explored how far sustainability goals have become part of the wider investment strategy for private equity (PE) firms. The report is based on analysis of a survey of 162 firms and includes responses from 145 general partners and 38 limited partners.

Maturing sustainability

Top-line results show that responsible investment has become an issue for 91% of respondents. For 81% of respondents, ESG (environmental, social, and corporate governance) was a board matter at least once a year, while 60% said that they already have implemented measures to address human rights issues. Two-thirds have identified and prioritised Sustainable Development goals that are relevant to their investment segments.

Change in concern and action on climate-related topics over time

While there is increasing concern around key issues, from human rights protections to environmental and biodiversity protection, the study finds there are mismatches between concern and action. For instance, concern among investment vehicles around climate change has increased since 2016.

In terms of risks to the PE firm itself, concern has increased from 46% of respondents in 2016 to 58% in the latest survey. However, the number who have taken action remains far below those concerned, at 9% in 2016 and 20% in 2019. Given the relatively broader scope of investment opportunities, portfolio companies face higher risks – and more concern – from PE professionals, at 83% in the latest survey. However, action is less than half of those concerned, at 31%.

Changing climate

In terms of the climate footprint of the portfolio companies, 77% of respondents state concern in the latest survey. 28% of respondents are taking action through the implementation of measures to mitigate their concerns.

Concern and action taken on ESG issues

In terms of the more pressing issues for emerging responsible investment or ESG issues, governance concern of portfolio companies comes in at number one (92% of respondents), while 60% have taken action on it. Firms have focused on improving awareness – setting up policies and a range of training modules for their professionals around responsible investment decision making. Cybersecurity takes the number two spot, with 89% concerned and 41% implementing strategies to mitigate risks.

Climate risks take the number three spot in terms of concern for portfolio companies (83%), but falls behind in terms of action (31%). Health and safety track records are a key concern at 80% of businesses, with 49% implementing action. Gender imbalance within PE firms themselves ranks at 78%, which is being dealt with by 31%. A recent survey from Oliver Wyman showed that there is gender balance at 13% of GP teams in developed countries.

Biodiversity is also an increasingly pertinent topic, with risks from pollution and chemical use increasingly driving wider systematic risks around environmental outcomes. It featured at number eight on the ranking of most likely global risks for the coming decade, with its impact at number six. As it stands, biodiversity is noted as an issue at 57% of firms, with 15% implementing action.