Corlytics, a start-up whose software analyses compliance risks in banks and financial services firms, has completed a funding round of €1 million and plans to double its workforce by the end of next year.
Bank of Ireland’s Seed and Early Stage equity fund, managed by Kernel Capital, invested €250,000 and Enterprise Ireland provided €300,000. The remainder of the funding was raised from angel investors and the company’s founders, who include veterans of financial software companies.
Corlytics’s name derives from compliance, risk and analytics. Last year US and European banks paid more than $65 billion in penalties and fines. Compliance risk can cost a global bank up to $4 billion per year, and the issue has grown in importance since the financial crisis.
"Over the last two years one of the biggest risks that has emerged for global banks is regulatory risk, and yet there is no data on this," said Corlytics's chief executive John Byrne.
Having identified a market, Corlytics spent the past 18 months in pre-launch mode, creating a database of every fine that regulators have levied against financial services providers globally since 2009. Called F2, it gives insight into the causes, impacts and trends of those penalties.
Corlytics’s second product, A2, is a suite of predictive analytics to identify whether a bank’s product or practice complies with the appropriate regulations.
Corlytics operates from Dublin, London, Boston and New York. It employs 18 people including legal and regulatory experts, securities and risk practitioners, data scientists and technologists.
“It’s a high-growth business. We expect to more than double in size by the end of 2016,” said Mr Byrne.
Its customers include regulators, banks and professional advisors. Some of the UK’s leading law firms are already using Corlytics, and the Bank of England’s recent Fair and Effective Markets Review also included data provided by Corlytics.
“Every fintech start-up has to look at London as a home market, effectively, and the other markets for us will be New York and Hong Kong,” said Mr Byrne.
