The Connector Podcast - Clausematch

Join the conversation with Danny Gal, Chief Operation Officer and Chief Revenue Officer at Clausematch.   He talks about the Compliance and Risk challenges in the market. 

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Koen Vanderhoydonk
koen.vanderhoydonk@jointheconnector.com

#FinTech #RegTech #Scaleup #WealthTech

Transcript

Introduction  0:01  
Welcome to the connector podcast, an ongoing conversation connecting fintechs banks and regulators worldwide. Join CEO and founder Koen Vanderhoydonk as you learn more about the latest available trends and solutions in the markets.

Koen Vanderhoydonk  0:20  
Hello, Danny, thanks for joining me in the podcast of the connector. And it's a real pleasure and joy to have you here. All the way from the UK, representing Clausematch. Can you tell me a little bit more about yourself, where you come from and about Clausematch.

Danny Gal  0:35  
Great, thank you. Great to be on. appreciate the invite. So the myself, I am based in the UK and sorry, now, and I have been with claws Max five years, my background has mostly been in commercial leadership roles a lot in the compliance and regulatory space. spent a long time at complement, which was acquired by Thomson Reuters governance risk and compliance. We created a GRC business within Thomson Reuters, we acquired a lot of companies, and was a pretty exciting journey. And then yeah, got involved in Clausematch through someone I worked with. Compliment are now Global Head of Customer Success and Clausematch. Just very quickly, what do we do, we're the leading provider in the compliance management and policy management space. We work heavily with financial services in institutions, but and other regulated industry options. And my role is Chief Operating Officer and Chief Revenue Officer, which is leading the operations of the business overall, globally, and then leading the go to market strategy, our customer strategy and marketing strategy of the business.

Koen Vanderhoydonk  1:49  
That's literally a mouthful. But there's something that comes back also where you work now, but maybe also a little bit in the past. And that is RegTech. Can I claim that a close message 100% direct that company?

Danny Gal  2:05  
You can

Koen Vanderhoydonk  2:06  
I but I cannot.

Danny Gal  2:09  
You can I mean we are. Reg Tech was a term that came around a few years ago, and then everyone became a reg tech. So you're Yeah, like now there is 1000s of reg takes a few years ago, there was a few. So I don't get too caught up on the coining of the term. What I do know is make sense lines and regulation and technology to help this area is growing, and even in downturn in the economy as it's going to grow further. And there's more funding investment buying going on in this space because of you cannot you cannot take for granted compliance and regulation and meeting your obligations. And therefore this is a growing space and an exciting space, and one that I'm excited to be in.

Koen Vanderhoydonk  2:53  
So would that also still remain to be the biggest challenge for the years to come that it's still on? Well, we know after the crisis, a lot of changed in the industry towards compliance and risk. Would you say that going forward, this continues to be the biggest challenge or other and other challenges we have to take into account?

Danny Gal  3:13  
Yeah, sure. Really good question. I think the for me, the biggest challenge that I see is we work with a lot of companies that are working in multiple jurisdictions that are growing aggressively in lots of jurisdictions with different levels of regulatory scrutiny and pressure and reputational risk, and we sort of your reputation actually is the biggest area of risks of most businesses, suddenly you do something that could be deemed wrong. And your reputation as a whole company can completely go down your share price go down, your investment can go down in a click of a button. And what a lot of compliance and risk people are battling with is the hundreds of things they need to be on top of the multiple requests they're getting every day and trying to work out what is their priority? What is their focus? And where do they put their resources? That feels like the biggest area of challenge in the industry that I see from speaking to customers, I think from going forward, and what we see from the light industry reports like Reuters is there's going to be a big focus around operational resilience. And a big focus on how you manage your third party is a big focus on conduct compliance. These are all really big themes that we're seeing a bigger area on. And that also links into personal liability, where we're seeing no longer is it just a company that is at risk. It's actually the individuals and personal liability that are also under huge scrutiny and that we're seeing a change in culture. And that's really interesting as well.

Koen Vanderhoydonk  4:44  
And then could you go a little bit. Could you elaborate a little bit on that? Because it's very interesting what you just said.

Danny Gal  4:51  
Yeah, sure. So, regulations like SMCR, the senior management regime, we've got equivalents in pretty much every country in the world now is put In a much bigger scrutiny on the Chief Compliance Officer, the Chief Risk Officer and the C suite in general, which means no longer can I work for Clausematch and just Clausematch to get five, actually, Danny galleys is going to be potentially go to prison potentially be fined, potentially be struck off from being a director. And that's because of new regulations are coming harder on has the company been compliant, but also has the key senior management being compliant. And interesting, like what's gone on in the last few weeks around the crypto space as well. Right? Suddenly, within a matter of days, that company that was one of the one of the most growth growing companies on Forbes, the CEO was there and suddenly, just in a matter of days, the whole company is completely gone. And that is all linked into this area of has the company conducted themselves in the right way have they managed, what they should be doing their conduct, their policies, their procedures, that governance in the right way? And clearly not in that instance,

Koen Vanderhoydonk  6:01  
there's two reflections that come to my mind. First one, it sounds like a reconfirmation of the three lines of defense, because that also puts the first line as responsible. And the second reflection would be ESG, where governance also plays an important role. So Clausematch. It's it's all over the place nowadays. I can see it everywhere on online and what I've been reading about you guys, and very impressive is that you growing fast in the US. You're a UK based company. But what has been your experience by moving into the US?

Danny Gal  6:38  
Yeah, very good question. We moved really to and I would say North America, Canada has been a huge growth for us, as well, as a business and working in some of the largest companies in Canada as well as us. We were first introduced to that market, and we were pretty reactive, there was companies saying we need you, we need you. Please help us the best scenario, right. And that was great. Yeah. And so we were part of the FinTech Innovation Lab in New York. And we were working with some analysts in the industry. And we essentially got pulled into the market and started seeing that what we were able to do and solve, or there wasn't anything that could really do this before. One big example was we won one of the biggest companies globally. Because they analyzed our product within a couple of months and completely changed from going with an existing provider to work. And we've asked, because they saw the capabilities of what we could do versus what that existing provider was claiming they were able to do. And so we're now growing our team there, we're growing our business there. And it's, it grew also our it's a key strategic part of our business. No longer is it we're in a UK company with, actually the US and Canada is just as strategic and just as important as our Emir and other business.

Koen Vanderhoydonk  8:02  
Did you see any differences between the European market that I'm talking about still regulations versus the US markets? Because I can imagine this, it all looks the same from afar. But if you go closer, it's completely different. Is that sort of the right impression?

Danny Gal  8:20  
Yeah, I mean, the big, the big difference is in the US, they are very prescriptive, you must do this. And these are the 10 things you have to do. In in Europe, we say you have to be compliant, how you be compliant is completely up to you, we don't mind how you do it. So the US are very much leading with these are the things you have to do, and much more prescriptive around what that looks like. And more like a tick box type scenario. If you do these five things, you will be compliant, whereas in Europe, but the regulators are much more focused on you need to be compliant, but it's down to you as a business to work out how you be compliant. And we will assess you on the decisions you make. And with that, I would also say one of the big other areas is certainly in the US, they're much more much more experienced of buying software. So they understand how to buy software much better than companies in Europe, where we're, I think, and specifically in this space of Compliance and Risk. Companies have been buying this software for 1015 years, but a lot of people have never actually bought any software. And so the experience of how to buy software, how to analyze, I've definitely got some war stories of different companies where you might be working with them for three years, and they just can't get themselves together on what they need as a company, their priorities, their projects, how to manage it from a beginning to an end. So yeah, I would say that that's the main differences that I see.

Koen Vanderhoydonk  9:45  
Oh, interesting. So does it mean that in the US procurement has a bit of a similar role than it has in Europe, but it's more profound within the compliance areas that is that more or less what you're saying?

Danny Gal  9:57  
I was more talking actually about the business owners. So compliance and

Koen Vanderhoydonk  10:01  
risk happy to hear that, by the way.

Danny Gal  10:03  
Yeah. And actually, that's something that we're seeing change generally in the industry is no longer is a compliance and risk professional, just a background by law, like just looking at regulation from a legal perspective, they're very much looking at technology at the forefront and operations at the forefront of how they run the business, you're starting to see roles like COO for compliance, or CRO for risk or head of technology for risk or compliance. And these are really good roles because they're supporting the business with what they need to do and the operational gains that they can make.

Koen Vanderhoydonk  10:36  
And I can only agree with you that in Europe, I think this is the next step within compliance because so far, it feels talking to a lot of banks that they have been surviving since the avalanche of 2008 2008. And and now you feel that there's some structure coming into compliance departments, which I think it's what you're describing here. But talking about the avalanche. Would you think that we on top of it, we still steep hill? Are we going downwards? In terms of regulations? What can we expect going forward?

Danny Gal  11:09  
It's interesting, different countries are taking different routes to this. So some countries are saying, hey, we need to stop so much regulation, because we want to attract businesses to come in and launch it right Lithuania. Guess what I saw something this week about, um, the companies and now fintechs are now in Lithuania as a result of the regulations that made it more appealing to be to be there as an example.

Koen Vanderhoydonk  11:35  
As I heard, right.

Danny Gal  11:37  
Yeah, exactly. So the, like, the number of regulations and regulatory scrutiny is not going away. And that's, that's going to be increasing. But I do expect regulators to be more focused on the things that truly matter versus a volume play. So I do expect that regulators are going to be saying, hey, there's 10 things we need companies that are super important that they do going forward. It doesn't need to be 50 things, it can be 10. But we're going to really investigate that they do these properly, and well, and if not, we're gonna find them and and you're seeing more and more fines and outs of public domain. Fines happening in this space right now. Like there's been more fines genuinely like before you only hear about a Wells Fargo got fined and ABN AMRO got fined. And then the big companies getting them now you're seeing it coming into much, much smaller companies, companies being fined and individuals being personally liable. And you're only gonna see more and more of that, as we see. The regulator's with the regulations are pulling over the last five years, start to now take effect in terms of the fines. And there is always this piece of regulation comes in, they analyze the market, and then you'll start to see some fines related to that. And other people have said, Oh, we haven't seen many fines for GDPR. As an example, you will start to see some more. But and you will start seeing more in other areas as well. So I don't expect regulatory scrutiny to go down the regulators had also ways of that they need to make money for the government. And they do that through managing the system. And so it's a key part of the environment that you'll see going forward.

Koen Vanderhoydonk  13:18  
Interesting. We're almost at the end of our podcast for today. So I was wondering, because thanks a lot for sharing a lot of the information about the market and the industry. But where does clause match comes in? I think that's also important for the listeners to know, where does clause match come in? Where can you guys help?

Danny Gal  13:39  
Yeah, sure. So we work with compliance and risk. We're sort of at the core of Compliance and Risk, where any company needs to understand what regulations are affecting them, understand their obligations, do a self assessment, manage their policies, procedures, controls and risks. Clausematch doesn't do end to end all of that, just to be clear. But we work with partners that capture the pieces that we don't like horizon scanning vendors, like GRC vendors. And but we are at the core of that. And we're helping lots of companies Small, Medium big around managing policies, procedures, and the linkages and mapping across that. And that's something that's super important and unique to what Clausematch does is we do it at a very granular level. And we're working with lots of players in the financial services industry, and we're here and open if you're interested.

Koen Vanderhoydonk  14:34  
Because that would be my last question is how do they contact you? Where can they contact you or can they find you?

Danny Gal  14:42  
Yeah, it's a Clausematch.com We are on you can put a request through there. My email address is Danny doped out at Clausematch.com And I'm sure we can post that in the after notes. But if you contact any of our team myself, or currently, I'm sure you will get a hold of us

Koen Vanderhoydonk  14:59  
Yeah, Indeed, indeed. Thank you very much, Danny for providing all these useful insights about the wonderful world of compliance. Thank you also to our listeners, and I hope to hear your back soon. You in person Danny and obviously the listeners on the podcast. So thank you very much. Thank you.

Introduction  15:20  
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