How We Built A $298K/Month Platform To Mitigate Financial Crime Risks
Hello! Who are you and what business did you start?
Hello, I'm Farnoush Mirmoeini, the co-founder of KYC Hub. With over 15 years of experience in STEM and a deep passion for efficiency, I've dedicated my career to the practical technological adoption of artificial intelligence and computing in the fight against financial crime.
At KYC Hub, I lead product management, data science, and the company’s growth strategy, focusing on creating solutions that empower companies to make better and more efficient decisions.
We started KYC Hub in 2018 with the mission to enable organizations to mitigate the risk of financial crime and reduce costs through an automated and configurable risk ops infrastructure and better data insights. We believe in making compliance with global and dynamic anti-money laundering directives an easy process.
Since our inception, we've been recognized with several major industry awards, including the “Best PEP and Sanctions Solution” by Regtech Insights USA and Regtech 100. These accolades are a testament to our commitment to excellence and innovation in the field of financial technology. Our products are designed to not only make this process accurate and seamless but also to create new opportunities by truly knowing your customers and serving them in the best way possible.
Our flagship product is a comprehensive customer onboarding, monitoring, and compliance platform. This platform offers a suite of automated and modular tools, along with advanced data and insights, that empower compliance teams to protect against fraud and financial crime.
We've built a global knowledge graph of high-risk individuals and entities, and we use deep learning and computer vision in data acquisition and transformation, as well as network detection. Our customers are organizations that require robust, efficient, and technologically advanced solutions for customer due diligence and financial crime risk management.
We are a truly global company, serving clients across diverse regions around the world. With operations spanning the United Kingdom, India, and Singapore in Asia, as well as a significant presence in North America, specifically in the United States and Canada, we are well-equipped to handle the needs of our clients. Additionally, our reach extends to the EMEA region. Our diverse and global client base is a point of pride for us, and we are committed to providing them with the best solutions to combat financial crime.
KYC Hub’s journey has been marked by innovation and determination. We've faced many challenges, including the struggle of securing funding for a female-led venture in a heavily male-dominated fintech industry.
However, our commitment to our mission and our ability to adapt and overcome have led us to where we are today. We've seen the initial traction from the market and have received positive feedback from our customers, which is a testament to our success and progress.
What's your backstory and how did you come up with the idea?
AML (Anti Money Laundering) is important for combating financial crimes, protecting the financial system. AML measures help to detect and prevent illegal activities, ensure the financial system remains stable, and demonstrate a commitment to ethical business practices. Failure to comply with AML regulations can result in significant fines and reputational damage.
AML is an essential component of the financial system and will only grow in importance as financial crimes become more complex. Having worked in the banking industry for several years, I have seen how AML fines cause reputational damages and at the same time, I have seen how inefficiencies and manual processes cause high costs, customer frustration, and missed risks.
We started KYC Hub because I believe intelligent automation and a risk-driven approach can overhaul compliance and save the industry from skyrocketing costs and AML fines.
Since its inception about four years ago, KYC Hub has been growing rapidly. We have faced many challenges including the uncertainties in the pandemic, building an international team in different time zones working from home while creating a collaborative culture, servicing global clients, and competing with known names in the industry.
Despite these challenges, however, KYC Hub has gone from strength to strength, gaining large global clients, multiple prestigious awards, as well as exciting partnerships. In four years, we have succeeded in growing KYC Hub into a trusted software brand for money laundering and fraud risk detection, and risk mitigation.
With a diverse academic background, spanning from Engineering School at The University of British Columbia to the Ross School of Business at the University of Michigan, and even further to the London Business School, my journey has been an exciting one. After completing my master's degree in a highly mathematical branch of telecommunication engineering in Canada, I was eager to apply my knowledge to the world of financial markets. That's when I joined a late-stage fintech startup as a quant in Canada, before eventually moving to London.
Working with tier-one banks at the intersection of technology, finance, and mathematics, I began to see the incredible potential that advances in computing and artificial intelligence could have on the banking and finance industry. As my career progressed, I realized that there was a pressing need for better solutions to mitigate financial crime risk.
My experience in the fintech sector exposed me to the challenges and inefficiencies in the fight against financial crime, prompting me to seek solutions. Despite the advancements in AI, ML, and automation, I discovered that many compliance and back-office systems still used outdated tools. This realization was an "aha" moment for me. As such, I co-founded KYC Hub with the mission to empower organizations to use AI and automation tools to build better financial crime risk management systems.
I knew that KYC Hub was the right idea to work on due to my extensive background in fintech and my persistent frustration with the under-utilization of practical technology in combating financial crimes. This concept stood out from other business ideas I had because it directly tackled a prevalent problem I had observed in the industry I was already deeply engaged.
It wasn't just about developing a profitable venture, it was about providing an effective solution to an existing issue that would yield significant value for many companies.
We validated the idea for KYC Hub by identifying a clear need in the market for an improved approach to customer due diligence and financial crime risk mitigation. The enthusiastic response from potential clients confirmed our beliefs, and the first signs of traction we saw in the market were highly encouraging.
At the time, my financial situation was stable, which allowed me to take the risk of starting a new venture. Despite the difficulties associated with raising funds, particularly as a female-led startup in a male-dominated industry, I was determined to overcome these challenges and bring my idea to fruition.
Take us through the process of building the first version of your product.
Building the first version of our product was a journey filled with learning, challenges, and incremental successes. Given the complexity and importance of the financial crime risk mitigation sector, we were fully aware that our product had to be of superior quality, efficient, and reliable.
Our initial step was to define the platform's features, which revolved around addressing core issues like reducing false positives in financial crime alerts, streamlining onboarding and account opening processes, and minimizing non-compliance risks. We knew that by tackling these challenges head-on, we could create a truly valuable solution for our users.
Throughout the development process, we constantly kept the end-user in mind. We placed great emphasis on ensuring that our platform was easy to use and offered significant efficiency gains. We understood that our success hinged on delivering a seamless experience that would ultimately simplify and enhance our users' operations.
We developed our platform using Spring Boot and Java for the back end, and Angular for the front end, and utilized OCR (Optical Character Recognition) technology for text extraction. We integrated Elastic Search for efficient data indexing and retrieval, and PostgreSQL for our database management.
Upon studying the market, we recognized that many of our competitors were focusing on individual or point solutions. They tackled single, isolated problems without a broader perspective. We noticed that this approach often led to inefficiencies and data issues within organizations, which seemed to be a recurring pain point among potential customers.
Recognizing this unaddressed need, we decided to differentiate ourselves by taking a more comprehensive approach. Instead of offering another point solution, we wanted our brand to be synonymous with efficiency and holistic problem-solving. This meant a platform that not only does basic Know Your Customer (KYC) checks but also offers features for ongoing monitoring, risk assessment, data verification, case management, and more. The aim was to introduce a comprehensive solution that addresses not just KYC compliance but the broader issues of customer due diligence and anti-money laundering (AML).
With that in mind, we dug deep into the current market offerings for our competitor analysis. We closely examined what others were offering, who they were targeting, and their strengths and weaknesses. We aimed to get a solid grasp of how our competitors positioned themselves in the market, in hopes of identifying any gaps that we could potentially fill or opportunities where we could stand apart.
From this detailed study, we found our distinct edge: we could be the comprehensive, all-encompassing solution in a landscape where most were just providing piecemeal fixes.
I would advise new entrepreneurs to build and maintain strong relationships. Our initial customers came from our personal and professional networks.
To achieve this, we actively sought feedback from our users and continuously iterated on our designs. We recognized that their insights were invaluable in shaping a platform that would cater to their specific needs. With every iteration, we gained a deeper understanding of our customers, allowing us to refine our product and make it even more effective.
It was a challenging journey, but our team's dedication, expertise, and collaborative spirit propelled us forward. Together, we overcame obstacles and pushed the boundaries of what was possible. The success of KYC Hub stands as a testament to our collective efforts, and I couldn't be prouder of what we accomplished.
When we were first starting out, it was just Jay Rao and myself. Jay is someone I had a fantastic working relationship with during our time together at HSBC Investment Bank. We formed the core of the initial team and each played a crucial role. Jay's analytical skills and financial acumen, honed at HSBC, were instrumental in shaping our strategy and operations.
For myself, I took on the task of defining our vision and building relationships with potential clients and partners. The combination of our skills created a powerful synergy that helped lay the foundation for our business.
Describe the process of launching the business.
Our launch was a meticulously planned and executed process. We knew we were entering a competitive market, so we had to ensure that our value proposition was clear and compelling. We spent several months before the launch refining our product and ensuring it was ready for the market.
Our strategy was a mix of online and offline activities. We created a robust online presence with a website (we created it on WordPress with GoDaddy hosting) that clearly articulated our value proposition and the benefits of our product. We also leveraged social media and online forums to create buzz around our launch. Offline, we attended industry events and conferences, where we had the opportunity to showcase our product and network with potential customers.
As a person involved in the strategy, we focused on leveraging various platforms to create a strong online and offline presence. Online, we built a user-friendly website that effectively communicated our value proposition and highlighted the benefits of our product. We also utilized popular social media platforms and online forums to generate excitement and engagement leading up to our launch.
Offline, we actively participated in industry events and conferences. These events provided valuable opportunities to showcase our product, engage with potential customers, and establish meaningful connections within our target market.
By combining online and offline activities, we were able to reach a wider audience, create buzz around our launch, and build valuable relationships with key stakeholders in our industry.
When it came to financing our business, my co-founder and I took a hands-on approach. Before we approached any external funding sources, we put in our own money. This personal investment wasn't just monetary – it was a significant commitment of time and resources to develop our product and attract our initial customer base.
Once we had a functioning product and a few customers to vouch for the value we were bringing, we felt ready to seek external funding. We turned our sights to institutional investors and government bodies. The response we received was heartening; we secured slightly over £1.1 million in funding.
We didn't rely on credit cards or loans during this initial phase. Instead, we used our savings to fund the development of the product. This decision was driven by our desire to maintain as much control over the business as possible in the early stages and to avoid the potential pitfalls of debt.
Once we had a working product, we leveraged our personal and professional networks to secure our first few customers. This not only provided us with initial revenue but also served as proof of concept for our product.
With a product and some market proof in hand, we then approached a seed investor in the UK for additional capital of $231K.
One of the biggest lessons I've learned is to embrace uncertainty. Entrepreneurship is a journey filled with unknowns. Our initial customers came from our personal and professional networks. This experience underscored the importance of building and maintaining strong relationships in business.
Your network can provide support, advice, and opportunities that are crucial to your success. Investing our own money into the business was a risk, but it was also a testament to our belief in our product. This experience taught me the power of belief and commitment.
Focus on the value you're creating and the rest will follow.
Since launch, what has worked to attract and retain customers?
When we launched our KYC and AML solutions, we knew that we had to show our potential customers the real value we were bringing to the table. We focused on showcasing our unique features like AI-based risk detection and global coverage, and how these could lead to cost reductions and improved compliance for businesses. It wasn't just about telling them what we do, but showing them how our solutions could solve their specific problems.
To showcase our unique features and their benefits, we used a combination of blogs, social media, and PR efforts. Our blogs were designed to be highly informative and valuable to our target audience. We carefully crafted each blog post to address specific pain points and challenges faced by businesses about risk detection and compliance.
We used real-world examples and case studies to illustrate how our solutions have helped businesses in various industries achieve cost reductions and improve compliance. By showcasing tangible results and success stories, we demonstrated the practical value of our features.
Building relationships has been at the heart of our customer acquisition and retention strategy. From the first interaction, we've strived to understand our customers' needs and provide personalized solutions. We've maintained regular communication, keeping them updated on new features and improvements, and making sure they know we're here to support them.
Our customer support team has been instrumental in this. They're always ready to assist our customers, answer their questions, and provide the necessary training and resources. We've found that this level of support not only helps to resolve issues quickly but also builds trust and loyalty among our customers.
Word-of-mouth referrals have been highly effective in generating new leads and converting them into customers. The trust and credibility established through these personal recommendations have played a significant role in attracting businesses to our platform.
Additionally, we have implemented a targeted digital marketing strategy that includes search engine optimization (SEO), content marketing, and social media advertising. These efforts have helped raise awareness about our platform, capture the attention of potential customers, and drive organic traffic to our website.
We've optimized our website and content for search engines, created valuable content that attracts potential customers, and promoted our product on social media to reach a wider audience.
We have also participated in industry events and conferences where we had the opportunity to showcase our platform and engage with a qualified audience. These face-to-face interactions have been valuable in establishing personal connections and directly acquiring customers.
How are you doing today and what does the future look like?
As a founder, I can say that today, we're doing well and feeling optimistic about the future. We've come a long way since our launch, overcoming numerous challenges and achieving significant milestones. We've built a strong product, attracted global clients, and won prestigious awards, which gives us confidence in our direction and strategy.
Looking towards the future, we have ambitious plans. We're planning to expand our product lines, offering a wider range of solutions to meet the diverse needs of businesses in different sectors.
In terms of geographical expansion, we're setting our sights on the US and Africa. These markets present exciting opportunities for us. The US is a major financial hub with a high demand for robust KYC and AML solutions, while Africa is one of the fastest-growing regions in the world with a burgeoning fintech sector.
Through starting the business, have you learned anything particularly helpful or advantageous?
Starting and growing a business has been a journey filled with both triumphs and setbacks. One of the early challenges we faced was underestimating the time and resources needed to build our product, which led to delays and budget overruns. This taught me the importance of realistic planning and budgeting.
Another hurdle was managing an international team across different time zones, which required me to learn new management skills and tools. To address these hurdles, I focused on fostering clear and concise communication, actively listening, and providing timely feedback.
As for tools, remote collaboration platforms were a lifesaver. We used project management platforms like Asana to streamline workflows, delegate tasks, and keep everyone updated on project progress. Video conferencing tools like Google Meet, zoom helped us maintain a sense of connection and fostered more personal interactions. Instant messaging platforms were great for quick updates and queries, ensuring no one was left in the dark.
All of these were invaluable in managing an international team. The learning curve was steep, but it's been an enriching journey that's shaped me into a better leader.
We also missed some opportunities early on, such as potential partnerships and markets that we didn't explore because we were so focused on our initial product and target market. Despite these challenges, we've also made some great strides. One of the best decisions we made was to focus on building a strong product before seeking external funding. This approach increased our credibility with investors and made the fundraising process smoother. We also invested in building strong relationships with our customers, which helped us retain our existing customers and attract new ones through word-of-mouth referrals.
What platform/tools do you use for your business?
As a founder, I rely on several tools to keep the business running smoothly and efficiently. One of my favorites is Slack, which we use for internal communication. It's a great tool for real-time messaging, file sharing, and collaboration. It helps us keep our communication organized and accessible, which is especially important as we work across different time zones. For marketing, we leverage tools like SEMrush, and Google Analytics for tracking website traffic and user behavior. We also leverage tools like ClickUp, Jira, Postman, Browser Stack & GitHub.
What have been the most influential books, podcasts, or other resources?
As a founder, the most influential resources for me have been "Lean In" by Sheryl Sandberg and the podcast "How I Built This" with Guy Raz. "Lean In" provides valuable insights on women in the workplace, leadership, and work-life balance.
It has helped me overcome obstacles and embrace my role as a leader. "How I Built This" shares inspiring stories of successful founders, giving me practical advice and motivation in my entrepreneurial journey.
Advice for other entrepreneurs who want to get started or are just starting out?
Starting a business is an exciting journey filled with opportunities and challenges. Based on my experience with KYC Hub, my first piece of advice for new entrepreneurs is to focus on building a strong product or service that solves a real problem.
This was a key factor in our early success. We invested our capital and time to build a product that we knew the market needed. Having a working product and paying customers not only increased our credibility with investors but also gave us confidence that we were on the right track.
Secondly, I would advise new entrepreneurs to build and maintain strong relationships. Our initial customers came from our personal and professional networks. These relationships can provide support, advice, and opportunities that are crucial to your success. Also, remember that entrepreneurship is not just about making money.
It's about creating value, solving problems, and making a positive impact. Seeing firms use our product and knowing we're making a difference in the world has been incredibly satisfying. So, focus on the value you're creating and the rest will follow.
Are you looking to hire for certain positions right now?
As we continue to grow and expand, we're always on the lookout for talented individuals who share our passion for combating financial crime. Currently, we're particularly interested in expanding our development team. We're looking for experienced software developers with a strong background in Python or Java, and a keen interest in AI and machine learning.
The first is a Flowable BPM Developer based in Bengaluru, Karnataka, India. This role involves working with our development team to design, develop, and implement business process management solutions using Flowable. The ideal candidate will have a strong background in BPM development and a keen interest in financial technology.
The second position is a Senior Hyperautomation Engineer, also based in Bengaluru. This role involves leading our efforts in automating various business processes to improve efficiency and accuracy. The ideal candidate will have a strong background in automation technologies and a passion for innovation.
Both positions are full-time and paid. If you're interested in joining our team and making a real difference in the fight against financial crime, we'd love to hear from you. Please visit our careers page on the KYCHub website to apply. We're excited about the talent and passion that new team members will bring to our mission.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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