Merlon Intelligence Brings Machine Learning to Regulatory Compliance for Financial Institutions

SAN FRANCISCO, May 24, 2017 /PRNewswire/ -- Merlon Intelligence, an enterprise software company focused on risk management and compliance for financial services companies, today announced the availability of its anti-money laundering (AML) compliance platform and the close of its $7.65 million seed financing round led by DCVC with substantial participation from Fenway Summer, Nyca, and Work-Bench. This is the first financing round for Merlon Intelligence, which is bringing the benefits of machine learning and natural language processing to the regulatory compliance challenges facing the world's largest financial institutions. The company's executive team has expanded to include financial services veteran Konrad Alt, who serves as Chief Operating Officer.

Founder and CEO Bradford Cross is an AI entrepreneur and investor. He was previously CEO of Prismatic (acquired by LinkedIn) and chief scientist at Flightcaster, and is a founding partner of DCVC, a leading machine learning and big data venture capital fund. Cross said, "Operational risk is the biggest problem in banking – it's the Achilles heel of the whole global banking system.  The tools that are being used to manage risk are out of date, and don't take advantage of the technological progress in artificial intelligence and natural language processing that are driving other industries forward."

Noted financial regulatory expert Konrad Alt has joined Cross as Merlon Intelligence's chief operating officer. Alt was previously COO and Managing Director of Promontory Financial Group, where he spent over a decade advising financial services clients on challenges including compliance, enterprise risk management, governance, and regulatory communications. As a young lawyer, Alt was immersed in the U.S. savings and loan crisis, first as an attorney in private practice and later as counsel to the U.S. Senate Banking Committee. Recruited to join the U.S. Department of the Treasury, he served as the second-ranking official at the Office of the Comptroller of the Currency.

Alt explained, "We're building a modern compliance platform that can help control costs, strengthen risk management, and provide a great experience for the people who depend on it do their jobs. We can bring all the information users need together in one system, and use artificial intelligence to make sure important details never get lost.  When big financial institutions can meet their compliance obligations more effectively, at a lower cost, everybody benefits."

Merlon Intelligence's initial product offerings support the needs of major financial institutions in the area of anti-money laundering. The company is partnering with major financial institutions to build end-to-end AML compliance solutions using machine learning and real-time monitoring to streamline compliance processes by giving managers the tools they need to reduce compliances costs and strengthen risk management. The solution will employ user-friendly workflow to guide AML alert investigation and natural language processing to identify negative news in a variety of languages, translate the relevant information, and highlight it for analyst attention. Merlon Intelligence plans to bring the same technological sophistication and focus on user experience to upcoming development efforts in the areas of transaction monitoring, KYC onboarding, transaction analytics, case management and other important customer needs.

Raj Date, managing director & chair of the investment committee at Fenway Summer Ventures and the first ever deputy director of the Consumer Financial Protection Bureau, said, "There's a lot of room to make the world safer for commerce and if you can address that at big banks you can have a significant impact. We were excited by the unique combination of extraordinary machine learning knowledge and deep financial services domain expertise that we saw in Bradford and Konrad and the Merlon team. We like that they're betting more on the technology and less on the giant armies of people and we're confident financial institutions will do the same as they come to realize there are better options out there."

Hans Morris, managing partner at Nyca Partners, said, "You can make a strong argument that anti-money laundering compliance is the single biggest headache for banks around the world. And it is not going away, because the fact is that money laundering remains a real and growing issue for law enforcement and regulators everywhere. But the tools and basic framework for managing this risk hasn't fundamentally changed despite – literally – billions invested in monitoring an increasingly complex problem. But Merlon is by far the most sophisticated solution we have seen, one that can enable banks to have an immediate impact on their results and cost of monitoring transactions and on-boarding clients. And having a banking expert like Konrad Alt and an AI entrepreneur like Bradford Cross is a very rare combination."

Merlon Intelligence's board of advisors has deep financial services and regulatory expertise and includes:

• Cantwell F. ("Chuck") Muckenfuss, former Deputy Comptroller of the Currency and partner (retired) at Gibson Dunn
• Neal Wolin, former Deputy Treasury Secretary and COO at Hartford
• Stuart Bell, consultant and former global sales manager/head of growth at Bloomberg
• Mike Marcus, former Chief Risk Officer HSBC

About Merlon Intelligence
Built by a world class team of AI and compliance leaders, Merlon Intelligence launched in 2016 with a suite of initial product offerings supporting the needs of major financial institutions in the area of anti-money laundering (AML) compliance. Merlon Intelligence plans to bring the same technological sophistication and focus on user experience to upcoming development efforts in the areas of transaction monitoring, KYC onboarding, transaction analytics, case management and other important customer needs. For more information visit www.merlonintelligence.com.

Contact: [email protected].

SOURCE Merlon Intelligence

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