Interview: Money laundering hurts trust in financial products and shies customer and funding away

The fintech startup ARYZE interviewed Siam Choudhury to share his tech insights about the future of the fintech sector. Especially regarding anti-money laundering and how the focus on compliance has changed.

Siam Choudhury is a curious person, especially about tech. He was working in areas from sales and marketing, to operations and in product management before founding his own tech startup. He spent his early career at Facebook and later moved into product roles at FundByMe and Acast. Now he is running Pliance, a regtech startup in the AML field, which he launched in 2018 together with his co-founders Adam Fürtenbach and Tomas Einarsson.

Why is AML important in your eyes? How have you seen that space change over the last years?

“AML is important from several perspectives. The first and foremost being that money laundering makes it possible for criminals to benefit from their crimes, which is something we should all work to prevent. The second is that money laundering in the financial sector hurts trust in financial products and services, which is particularly harmful when we see so much innovation taking place. If trust were to be lost, customers and funding would shy away from new fintech solutions, and we would be worse off for it.

The space has changed in recent years from being seen as a part of the business that is completely neglected to, what we see now, where companies are starting to realise there is true long term business benefit to having good AML. Aside from being a requirement to foster a sustainable financial ecosystem, it is also becoming a competitive factor. If your AML compliance activities are not modernised you will not be able to compete in the fintech area. “

Do you think that there is a bigger focus on compliance in the finance sector than just some years ago?
Siam Choudary from the tech startup
Siam Choudhury

“I do believe the focus is bigger, but most importantly I believe the focus is different. Previously the solution to growing compliance has been to just hire more people to continue working in an unsustainable, unscalable way. With more financial innovation taking place, and competition increasing it’s becoming even more important to invest in compliance. Both to fight against financial crime, and to be able to have fast-moving companies that can scale.”

How do you think people will move money across borders and how AML processes will work with it?

“There will be a myriad of ways that money will move across borders, and AML has to adapt to those ways in order to ensure security and trust in the financial ecosystem. By improving the AML processes, better tools and ways of moving money will be able to be created.”

As millions of people come online for the first time, how will the unbanked of the world be accepted in the “normal” payment world when having issues in providing documentation of their identity?

“We are moving to a more digitised world, and as more of the unbanked population gain access to banking, so will their exposure to the digital world. It will be up to legislation and AML solutions to find ways of bringing these people into the financial ecosystem. It’s going to be a big challenge going forward, but a completely necessary one.”

Which was your biggest mistake as an experienced tech entrepreneur?

“I have been fortunate enough to not have made huge mistakes (yet!), but I have definitely had a lot of learnings from my past experiences that has helped me to do better. Two of those learnings have been to focus on the core product, and to focus on the business model early on. Maintaining these strong focuses will help in the long term, even if it feels limiting early on.”

Which technology will make the biggest difference in fintech in your opinion?

“I think a change of mindset will be more important than specific technologies. The financial industry has been relatively slow moving and conservative as a whole, fintech makes up only a small drop in the financial ecosystem, and the progress we see has been more due to people seeing opportunities than of new technologies.”

How do you see the fintech sector evolving in the next 20 years?

“20 years is a long time, and very hard to predict. What I’ll do instead is to say how I’d like things to evolve. And that is to see more focus on sustainable business models, and focus on security and compliance. We have to get better at preventing financial crime proactively, and not only see AML or compliance as a regulatory task that is in the way of running a financial company.”

Is there any advice you would like to share with aspiring entrepreneurs in the fintech industry?

“My advice would be to make assumptions about the future and work towards that. Have a long term view of where the world is going and how your product will find a place in that world. My final thought is, again, to focus on the core product and the value it provides. Reject the temptation to follow multiple threads early on.”

Pliance is a Stockholm-based startup which created a product to help simplify and automate anti-money laundering processes for companies worldwide. You can add Siam Choudhury on LinkedIn and for more interesting insights stay tuned on our ARYZE blog.

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