Anton Ruddenklau, Global Head of Fintech sits down with Vishal Marria, CEO and Founder of Quantexa to discuss how they are connecting data to help banks make better decisions.
One of the most challenging issues facing financial institutions today is how to use data effectively to make more informed decisions — quickly, confidently, and without an inordinate amount of manual intervention.
For example, most banks have processes to identify potential financial crimes — like whether a customer is a money launderer — but those processes can be very labor intensive and time consuming. “One organization that I was working closely with was getting thousands of alerts coming from their traditional rules-based AML systems,” Vishal Marria, Founder and CEO of Quantexa, explains. “They were looking at each alert and the first thing that they were doing was manually piecing together the data around the alert and then spending time investigating the alert…99% of which were false positives.”
Making the right connections
It was interactions like these that had Marria realizing that surely the entire process could be improved significantly if a financial institution could build a connected view of data internal and external to their organization, and then apply the best machine learning and AI on top of it. That premise is what drove him to found Quantexa in 2016. “That’s why Quantexa exists — to support our clients in connecting data together so they can make better decisions.”
Of course, in order to grow the company, one of the first challenges that Marria had to overcome was convincing big banks that Quantexa not only understood what they wanted to achieve and their data problem, but that it could solve it effectively. Because banks are highly regulated entities, Marria knew that model validation, model governance, and aiming to ensure transparency over the connections and analytics would be critical. “Understanding that problem, understanding the scale and transparency problem, and understanding that just connecting the data was a huge challenge in itself —” he explains “— is what allowed us to get through door one.”
Since focusing on helping financial institutions tackle potential fraud and financial crime, over time, their mandate has grown as their clients looked to use their services to drive better decisions elsewhere within their organizations. “More and more, our clients have taken us outside of financial crime,” Marria explains. “[Now, we] support them in decision-making around credit risk, around customer intelligence, and more around data management right across the enterprise.”
Building a fintech from scratch
Marria took a big risk when he started Quantexa — not only leaving an excellent position to found the company, but also pouring a significant amount of his own money into it. “We bootstrapped the company for the first twelve months between the [other] founders and myself,” Marria shares. During that time, Quantexa’s primary goal was to build a product and take it to market to get market validation.
And they did. “In the first nine months, I was in an RFP for one of the biggest banks in the world where I was testing the MVP of our product with some of the largest tech companies on the planet — and when we won that process and we won that RFP…it was not just market validation, it was self-validation that what we were creating was game changing.” After winning that RFP, Quantexa started to take investment. The company has since completed four successful funding rounds — most recently a $153 million Series D round in July 2021.
More and more, our clients have taken us outside of financial crime. We now also support them in decision-making around credit risk, around customer intelligence, and around data management right across the enterprise.
Attracting funding: Lessons for entrepreneurs and startups
Marria remembers just how stressful his first Series A investment round was. He recommends that any CEO who is going to hold an investment round think of it as a process — like an RFP. “You must run it as a process because time can go very quickly, and you're still running the business, and you're still burning cash.”
He also stresses the importance of displaying company metrics in a way that makes it easy for investors to digest and easy for them to compartmentalize the company into potential segments. “This is especially true when you’re in Series A, Series A+, or Series B,” he explains. “Because you’re still making the business. You're still making the market. And, more importantly, you do not have that many customers or clients or users because of the infancy of your business.”
Marria also recommends that CEOs share with investors the vision that their company is going to fulfil and execute in the future. “What we did incredibly well [when we did Series A], is that we didn't just talk about the problem we were solving today. We talked about how we could take our capability and solve other problems — not just in financial services, but in government, telco, oil and gas, and other sectors,” he explains. “That gives a lot of comfort to a VC when they're looking at upturns and downturns in markets.”
Quantexa is a global data and analytics software company pioneering Contextual Decision Intelligence that empowers organizations to make trusted operational decisions by making data meaningful. Using the latest advancements in big data and AI, Quantexa’s platform uncovers hidden risk and new opportunities by providing a contextual, connected view of internal and external data in a single place. The Quantexa platform enhances operational performance with over 90% more accuracy and 60 times faster analytical model resolution than traditional approaches, solving major challenges across data management, financial crime, customer intelligence, credit risk, fraud and throughout the customer lifecycle.
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VC investment soars and M&A makes a big comeback.
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