Founded in 2018, RegTech firm Aveni claims it is leading a new era of risk assurance by enabling 100% digitisation and automation of the quality assurance process. The firm analyses every customer interaction to drive enhanced data insights, comprehensive risk oversight and process automation.
The inspiration behind the creation of Aveni came from its founder’s past career. Joseph Twigg spent 15 years working in the investment industry, and during that time was introduced to a senior research fellow in natural language processing (NLP), who was running a €10m project with the BBC.
Twigg continued, “We got talking and I instantly thought – why is this not being used across financial services? Having spent 15 years at the coalface of financial services, you see how inefficient processes are, but especially in the areas around customer interaction. We designed a proposition to capture the data from customer interactions and then use that to automate downstream processes, whether that’s risk, identification, opportunity or automated admin.”
Aveni offers an NLP solution that focuses primarily on voice but is also omni-channel. The company’s technology captures speech from video conferences, telephone calls and face to face meetings.
Twigg remarked, “We have a pipeline of NLP models that convert speech to text and then derive context and understanding from the conversation to automate specific processes.
“For example, we can listen to this conversation, if we had 15 questions and we wanted to check how your interview skills are – the machine will assess that interaction. From this, we consolidate information and could provide coaching opportunities.”
Twigg noted that the technology is a ‘paradigm shift in the way that companies assure themselves over their customer operations’. He remarked that the incumbent process typically involves large human teams listening to calls and writing a combination of objective and subjective assessments.
He continued, “We take that completely out of the equation. We assess every single interaction, then triage anything interesting to human assessors. We also have models that we’ve built with large national banks that identify vulnerable customers. For every single call we have a vulnerability assessment that is scored and presented back in line with FCA guidance. That’s really the essence of our technology and how it’s used.”
Aveni has a range of bespoke models that are trained on millions of data points and operate through its quality assurance product, enabling the platform to learn continuously. Twigg explains, “If you think about those 15 questions you’re assessing, our machine will analyse them – a human assessor may look at a small number of them – and determine whether the machine was right or wrong. Having that human in the loop and feeding back enables our models to learn from every single interaction within the platform.
According to the Aveni CEO, the company’s ethos from a technology perspective is human plus, “It’s going to be a long time before the regulator is either willing or capable to regulate automated provision of financial services and AI, so there needs to be a human decisioning process, we design our propositions around that. Our intention is to make humans materially more scalable and capable, rather than removing them from the process.”
Pain points
What is the primary pain point Aveni is looking to solve? In the view of Twigg, the company’s intention is to convert processes such as quality assurance from being a box-ticking, relatively low-value exercise into a central nervous system for a business that drives decisions across products, client, service sales and compliance.
He said, “The primary problem is the three lines of defence model, which currently is not scalable in a Consumer Duty world. What you’re going to find is companies will be required to demonstrate significantly more information and data points on how customers are achieving good outcomes.
“In order for them to scale up in their existing framework using humans to manually assess customer interactions, it makes the cost of compliance eye-watering. So ensuring that businesses can scale operationally and meet the requirements of Consumer Duty are the key pain points.”
RegTech trends
With RegTech seeing significant market growth during the pandemic, the key trends seen in the industry are evolving with consumer needs. What trends stand out at the moment for Aveni?
Twigg highlighted key macro trends including the adoption of new technologies such as blockchain for smart contracts, AML, NLP being adopted to cover larger quantities of interactions as well as open banking in the RegTech space.
However, one of the biggest trends for Twigg in the UK specifically, is how businesses go about demonstrating to the regulator that customers are achieving the outcomes that products or services are intended to provide, and monitor that over time as customer circumstances change? That is a huge difference in the way businesses need to operate, and is a key driving force for the next year.
Regulation and inflation challenges
What challenges do companies face in a high inflationary and regulatory environment? According to Twigg, if big banks or financial services firms consider what is happening at the moment, what should they be expecting as we go into a cost-of-living crisis and into a recession that is expected to last 18 months?
Twigg detailed, “What you’re expecting is a significant increase in non-revenue generating activity for the institution – collections and recoveries for a large bank is a cost centre.
“We spent 18 months building models with a national bank within their collections and recoveries and used thousands of their calls to train models to identify vulnerabilities. So, we have very clear insight into the type of interactions that happen very regularly and they’re harrowing.
“The intensity of that is going to increase significantly and probably have a bigger impact than the pandemic, and you don’t know which dominoes are going to fall. So, companies are going to have the challenging combination of decreased revenues through decreased activity with less money to spend, and an increase in cost-base due to the macro-economic environment, which leaves them in a difficult position of deciding where to invest.”
In the opinion of the Aveni CEO, a key area to invest in is technology. “Number one, it improves efficiency across communications, which is critical. Secondly, it is focused on delivering good outcomes for clients, which is a sweet spot for businesses in the next 18 months.
Twigg remarked, “Companies will have to significantly upsize monitoring functions to satisfy consumers. And if you consider moving, let’s say 1% assurance coverage of your whole customer interactions to 5%, it looks unachievable and really daunting.
“A firm that listens to a thousand calls a month will now have to listen to five thousand. Does my team of 30 need to become a team of 150? Unless you consider the adoption of technology to deliver and enable that scale, I can’t see how companies will be able to manage their cost of compliance at an appropriate level.
“How else do you automate the monitoring of customer interaction without replicating human processes through training machines that do the same thing? It has almost become a necessity.”
Twigg remarked that the company often finds executive teams don’t have the adequate knowledge and understanding of the risks and benefits of machine learning to make an effective decision at board level, and claims the firm often has to provide education sessions with senior executives.
He said, “Our positioning as a business is that we’ll help companies take their 1% coverage and turn it into 100% enabling access to every single interaction. The total cost of that, alongside a slightly reduced team, will be less than what companies currently have. That’s a value for risk teams considering how to scale up.
“If companies do the minimum possible to survive these challenges, they’re going to get the minimal possible benefits from the changes they make. Our view is that in the not-too-distant future, there will be a group of companies that successfully adopted data-driven technology, and the competitive advantage will clearly live with the companies that have insight into their data and technology.”
Future plans
What is next for Aveni? The key focus for the company is distribution.
Twigg said, “Our product has now reached a point of maturity where it can be adopted out of the box, and then easily customised to meet specific company requirements. So, for us, it is all about distribution.
“We aim to be one of the preeminent suppliers into the solutions consumed by financial services firms in the UK, and that’s really our focus going forward. Our priority is new client acquisition, and it’s about getting out there, improving brand recognition and creating demand before implementing our full-on assault distribution plan for next year”.
Copyright © 2022 RegTech Analyst
Copyright © 2018 RegTech Analyst
