Guest Blog by Adib Basbous, founding partner of EPOQ Partners
The ‘Compliance Economy’ is among the fastest growing industries, currently sized at USD110 Billion and growing at a CAGR of 11%, it clearly stands as the enabler of dematerialization in a disintermediating world.
Be it e-Commerce, FinTech, RegTech, InsureTech, the entire Tech family relies on highly regulated forms of identification, based on reliable data to de-risk whitelisting and ease onboarding.
Verification essentials such as Anti Money Laundering (AML), Know Your Customer (KYC), Know Your Business (KYB) and Identity Verification (IDV), are gradually availed digitally, and in real-time, to become eAML, eKYC, eKYB and eIDV, providing data access and compliance as a service.
The more granular checks of Credit Reporting (CR) and Due Diligence (DD) are also gearing up to faster delivery methodologies, spurring a wave of M&As driving the consolidation between data-rich and tech-advanced companies.
From tighter regulation to data compliance.
With an ever-expanding framework regulating all financial players, from traditional banks to Fintech, payment providers to e-commerce, marketplaces to the sharing economy, digital platforms to exchanges, accessing and availing data is paramount in building, maintaining and strengthening a culture of compliance.
The real challenge remains in terms of data prosecution, reliable high-grade data availability, de-duplication and efficient delivery of increasingly granular checks and verifications.
The depth and breadth of data, combined with an integrated suite for delivery are key drivers of operational efficiencies, enhanced regulatory compliance, and improving the client experience.
The MENA case
In today’s world, great disparities exist on many fronts, and these inequalities are particularly true in data availability and coverage, thus splitting the world between regions that can ‘leverage data’ and regions that pose a ‘data challenge’.
With limited data coverage, few listed companies and high barriers to entry (i.e. languages, access to information) the MENA region traditionally exhibited few, small to medium, data providers.
The recent and rapid regional development of the digital economy prompted local players such as Cedar Rose to anchor its regional leadership by focusing on a seamless delivery of Euro-grade data that is fully standardized, flawlessly translated and transliterated to precisely overcome such challenges. In a region poised to double its digital economy over the course of the coming 5 years, global players are also firming up their regional presence by joint-venturing or acquiring established key players.
The current trend of consolidation that is globally rationalizing the compliance economy will see its coming to the MENA, so the question becomes: who’s next to seize this ripening and low hanging fruit?
About the Author: Adib Basbous is a founding partner of EPOQ Partners, a private investment advisory firm, led by seasoned former partners in top-tier consulting firms and investment management firms. EPOQ offers bespoke advisory services at the intersection of business consulting and private equity. He can be reached at: adib@epoqpartners.com
