How RegTech startup muinmos is like “a self-driving car in a market that has just gotten the Ford T”

Onboarding clients can be a time-consuming and risky process. That’s what Remonda Kirketerp-Møller’s RegTech startup aims to change.

muinmos was born out of frustration. Before the RegTech startup even saw the light of day, Remonda Kirketerp-Møller had been working in the finance sector for almost two decades, specializing in how to automate highly complex legal and regulatory challenges. “Even in the early days onboarding clients, in particular in capital markets, [had] actually started [to become a bit of] a nightmare,” the company’s founder and CEO tells RegTech Analyst.

A successful onboarding process would require financial institutions to verify that clients were not just criminals, but also that signing them on would be compliant with regulations. This complex process could prove particularly perilous task if the client was located in another country. “It became even more complicated ten years ago,” Kirketerp-Møller says, stating that the financial crisis of 2008 resulted in regulators intervening more in the market.

That was when she decided to do something about it and founded muinmos in 2012. Kirketerp-Møller explains that the technology the startup developed “solves the problem and it ensures that the financial sector is actually complying with the prevailing legislation at all times.” By doing so, underlying investors and the financial institution are protected by securing its ongoing compliance. Moreover, it ensures financial institutions are both compliant and automated in a way that “they don’t have to worry about it every hour of the day.”

The first year of munimos was spent researching the market and building the backbone of the technology, mapping out the legislation as well as developing the regulatory engine. She also spent that initial period creating the first version of the company’s PASS platform. Today, this engine uses machine-learning and artificial intelligence to extract relevant information from relevant legislation, which help financial institutions comply with the relevant laws of the day. By using the technology, the financial institutions can verify whether or not they can do business with a client within seconds.

The key differentiator between muinmos and many other RegTech startups focusing on onboarding compliance is that it is, as Kirketerp-Møller puts it, not just about the “cooler journey.” She explains that most companies in this space would be focusing on doing anti-money laundering (AML) and criminal background checks of clients. While muinmos does this too, it solution starts one step earlier.

All the relevant information needed by the financial institution to onboard a client to trade with it is fed through the PASS engine. That includes everything from looking at the specific product, service and country. This information is then fed to the relevant AML and KYC provider based on coverage including jurisdiction. Importantly, muinmos is able to save financial institutions money by detecting non-compliance in the earlier stages, stopping them before they can begin the costly AML and KYC checks.

“We actually determine wherever the financial institution can even onboard the client,” states Søren Dalgaard, executive director of sales at muinmos. He explains that the PASS engine checks whether the client is retail or professional and secures whether it is appropriate and suitable of the financial institution to offer for example trading access or advice. The solution also conducts cross-border checks to ensure the client is in a country where the legislation would allow the type of financial service the company is offering. “Even though you might be allowed to sell a financial service in the UK, you may not be allowed to sell the same financial service to a client in Sweden,” Dalgaard continues.

He argues that there is a clear demand for this product, saying “you will be able to find 50 companies that can automate” AML and know-your-customer (KYC) checks, but that nobody else except muinmos can do those crucial initial steps. “This is a major bottleneck in any financial institution,” Dalgaard suggests. “It doesn’t matter if it’s a massive bank or small brokerage house, this is the most dangerous place for them. Because if you miscategorise a retail client wrong as a professional [one], that client can go to the authorities and demand reverse of trades. If you’ve done this wrongly, you have put your financial institution in jeopardy.”

muinmos’ solution is primarily targeting clients working in capital markets. The ideal customer of the services includes financial institutions, hedge funds, asset managers and banks.

And the team behind the technology says their clients are going wild about it. “Our solution is such a massive leap forward,” says Dalgaard. “It’s really a game changer for the institutions when they start utilizing this. It’s a little bit like using a driverless car, a self-driving car in a market that has just gotten the Ford T. And it’s really a massive step forward.” Although, he suggests that it might be so innovative that not everyone can initially understand its usefulness. “But it is not something we see as a massive problem, because the market is starting to get it,” Dalgaard adds.

The tech sector as a whole is struggling with a massive talent shortage. However, Kirketerp-Møller states that muinmos has been able to overcome this obstacle with relative ease as people are recognizing that FinTech and RegTech are growing areas ripe with opportunities. “For those that actually are talented, they see that this is really the future in terms of development and where a lot of AI is being implemented and a lot of sophisticated cool things [happen],” Kirketerp-Møller says.

Instead she argues that the biggest hurdle to overcome has been turning down investors. “We don’t want just to go out and take as much money as the market wants to throw at us in terms of investment,” she explains. “We are actually trying to grow the business in a sustainable manner to make sure that investors that come in are the right investors, which means that we’re often lacking enough resources for the growth we’re going through. And I would say our biggest challenges is actually trying to work out at which point the journey should move faster from where we are now.”

Up next, muinmos plans to expand its team and product line, double down on its marketing efforts and, in case the right investor comes knocking, to potentially raise a venture round.

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