PwC spins-off its fintech arm eBAM as LikeZero

20 November 2020 2 min. read
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PwC has sold its in-house data capture software to its management team, as changes to auditor independent rules mean the firm cannot effectively grow the business. The deal for eBAM was backed by private equity houses Souter Investments and Manfield Partners.

The UK’s audit industry is undergoing a regulatory overhaul in 2020. Following the Financial Reporting Council’s (FRC) announcement of a number of changes to see the professional services sector’s Big Four – Deloitte, PwC, EY and KPMG – separate their accounting and advisory wings more distinctly, the quartet have been weighing up the future of any assets which they worry could be seen as a conflict of interest under rule changes.

The latest example of this is that PwC’s UK wing has divested itself from eBAM, a FinTech business it had previously owned. Developed in January 2018 by a team of PwC consultants, the technology enables financial institutions to automatically search thousands of pages of complex legal contracts for risks arising from significant regulatory events such as Brexit or the phasing out of the London Inter-bank Offered Rate benchmark.

PwC spins-off its fintech arm eBAM as LikeZeroIt already automates regulatory risk analysis for around ten of the City’s largest finance firms, who are also potential clients of the Big Four’s auditing service lines. Now, eBAM is to be acquired by its management, and rebrand to LikeZero. The deal, which will conclude for an undisclosed fee, was backed by Stagecoach founder Brian Souter’s UK family investment office Souter Investments and London-based Manfield Partners.

Michael Lines, PwC’s former Head of Contract Solutions, will become LikeZero’s Chief Executive Officer. Speaking to London based news platform Financial News, he explained that the buyout was prompted by the coming regulatory limitations imposed by the FRC, which will mean PwC is not allowed to sell its own technology to its audit clients.

“In the current environment, PwC [is]... not really the right home to turn LikeZero into a proper global business,” he added.

The news follows several other members of the Big Four similarly exploring the sale of practices which might clash with new regulations. For example, the UK arm of KPMG is reportedly mooting the sale of its restructuring arm, just months after the global leadership of Big Four rival Deloitte vetoed similar efforts in its own British wing. The news comes two years after KPMG last waved away rumours that the professional services giant was set to offload its corporate turnaround operations.