When Oxana Turtureanu was carrying out know your customer and anti-money laundering checks while working at a bank in Moldova, there was “a lot of manual work”. It’s not only financial institutions that do KYC and AML checks. Accountants, lawyers, fiduciaries and others need to verify that their clients are not engaged in wrongdoing, or face hefty fines--that sometimes can amount to “millions of dollars and even billions of dollars”--levied by regulators.

“The key challenge for these companies is first to find broad and reliable data on their KYC subject, and second, not burn a hole in their P&L [ledger] while doing so,” says Turtureanu. “These companies hire armies of KYC officers, who often spend more than 60% of their time on collecting data from multiple sources to support case investigations,” she says.

“An average compliance officer needs to go through corporate data, politically exposed persons lists, information about beneficial owners, social media, sanctions lists, adverse media, and this results in hours spent on collecting data with limited information [confirming] that this data is relevant. I know this first-hand, because I did that as a senior economist in Moldova, and I had to do this every day.” However, “the hardest part for the KYC officer is actually to take the decision. So instead of thinking about a decision, about analysing the data of the subject, they need to spend hours on gathering the data.”

That’s why Turtureanu jumped at the chance to co-found Digitalus after completing her master’s at the University of Luxembourg. Digitalus got started in 2020 as a university spinout and did beta testing for roughly a year before formally launching in September 2021. The startup automates the time-consuming data search, creating what it calls a “unified digital profile”, which gives compliance officers more time to analyse and interpret results. The company’s solution “utilises natural language processing and analytics to clean and process large volumes of data, helping our customers separate the signal from the noise. We don’t give you all the data we find, we check it.”

Privacy concerns

Existing providers maintain archives of “cold data” from a limited number of sources, according to Turtureanu. In contrast, Digitalus does a “scan only when it is needed by the KYC officer, we don’t store any data on the subjects.” That means the sources checked can vary based on specific client needs, changing regulatory requirements and the latest information available. For example, the system collects the social media accounts of the person being checked but does not scan any of their social media posts. That could change, if EU money-laundering rules require it in the future, a proposal being mooted.

The approach also means privacy protections are built in. While financial regulations are strict, “we also have GDPR”, the EU data protection rulebook, which needs to be observed. More philosophically, “we care about privacy a lot, so we don’t do more than necessary,” she states. “We invested time and effort to develop a technology that will do these searches on demand” instead of storing reams of data.

For the moment, the company is focussed on a funding round and on signing up small- and medium-sized clients in the EU. Does the outfit plan to expand outside the bloc? “We hope to [someday], but first let’s tackle this market.”

This article first appeared in the