The financial industry has been going through a massive transformation, a change that started with the unbundling of banks by first-generation Fintech companies. In a similar way to how Twilio has changed communications and never looked back, the B2C financial services industry is facing another wave of disruption, now on the back of startups and tech giants that have upended the infrastructure for financial services. Today, virtually every digital-born company has the potential to become a financial service provider by making a few API connections and webhooks as part of their product.
One thing hasn’t changed though — the financial industry was, is, and will likely always be one of the most heavily regulated industries. These newcomers which resemble Facebook more than they resemble BofA, be it Interactive Brokers, Robinhood, Affirm, Melio, or Prosper, all need to adhere to the same regulations as the traditional trading, lending, and other financial platforms. With the entrance of digital-native players to an already heavily regulated industry, regulators are enacting and introducing new measures to ensure consumers’ interests are being kept.
Monitoring and mitigating compliance and regulation violation risks have always been challenging tasks. Yet, the organizations facing it were, for the most part, large financial institutions who dealt with it with heavy-lifting of purpose-built rule-based and manually monitored solutions. These solutions sat as gateways in predefined communication intersections (email etc.).
Several colliding trends in today’s market, require a rethinking of approaches to monitor and mitigate compliance risks:
- Business to consumer communications have evolved: B2C financial businesses must meet customers’ communication habits to stay relevant. Consumer’s touchpoints transitioned from controlled and guided asynchrony communication to omnichannel real-time interactions over video, voice, messaging, social media, and multiple other means.
- Digital native-born are viewing compliance as a means to ensure customer delight, rather than the prevention of future fines and exposure coverage. They seek solutions that improve their operational excellence and create value that can impact their business beyond reducing compliance overhead.
- Regulators shifted to the offense. Not only there are more regulations and directives, translating these theoretical rules to actual business cases requires a deep understanding of each regulation. A 2019 survey estimates that 4% of a financial services firm’s total revenue is spent on Compliance, increasing to up to 10% by 2022.
Growth-minded companies who are focused on capturing market share from existing financial institutions are looking for ways to mitigate and contain that risk while supporting their growth plans. They want to use risk mitigation as a business enabler rather than an inhibitor of their growth.
Introducing Sedric — a Compliance Excellence Platform built for the Fintech Era
Knowing each other since high school, Sedric co-founders Nir Laznik and Eyal Peleg have been looking to build something together for a long time. They started Sedric in 2020 with a combination of hands-on startup experience and data science know-how, with a mission to create a solution tailored for cloud-native companies. With very little resources they’ve built a product that generates hundreds K $ in ARR, used by organizations in all shapes and sizes. They’ve forged partnerships and alliances with industry-leading organizations, and been able to attract an unparalleled cadre of advisors.
Sedric was built from the ground up to serve digital native-born companies. Its proprietary conversation intelligence technology enables sales teams to grow into the best yet compliant version of themselves.
Sedric helps companies to securely store all of their customer interactions while complying with all the frequently changing regulation requirements (e.g GDPR, PCI, etc.). Unlike traditional solutions, customers don’t need to hire professional services or heavily invest resources before benefitting from the platform. The product seamlessly integrates and digests data from where conversations are being made, be it your CRM, contact center, or any other customer touchpoint.
The data is then securely cleaned, encrypted, and stored to keep companies’ and their customers’ data protected. The solution leverages cloud-based AI algorithms to constantly monitor 100% of customer interactions, detecting mandatory statements and misconducts according to company-specific standards and industry benchmarks (Sedric’s Regulation Lake). The AI algorithms extract the intentions rather than searching for an exact match what brings the monitoring accuracy to perfection.
Sedric’s platform transitions teams to be proactive and prevent customer cases rather than being constantly swamped responding to complaints.
We spoke to companies to understand how they use Sedric and what differentiates it from existing products. While compliance coverage gaps were what led them to choose Sedric, once they’ve implemented the product they experienced an increase in their productivity and overall customer experience. Moreover, when analyzing the way customers use the product, we’ve seen an increase both in team members using the platform, and in the amount of time, each team member is spending on the platform.
We’re excited to welcome Sedric to the StageOne family and looking forward to supporting them as they grow (and they grow fast!).