Kyckr Limited (ASX:KYK) Managing Director, David Cassidy, talks end-to-end Know Your Customer solutions, the costs of poor, incomplete or fraudulent data & new client wins.
Jessica Amir: Hi I’m Jessica Amir for the Finance News Network. Joining me from Kyckr Limited (ASX:KYK) is Managing Director, David Cassidy. David, welcome to the Finance News Network.
David Cassidy: Thank you Jessica.
Jessica Amir: First up, for those not familiar with Kyckr. Can you give us an introduction to the company?
David Cassidy: The 21st Century is very much about protecting against money laundering, terrorism financing. And in this world today, having solutions that use technology to automate, it’s a pretty important outcome. So we’re classified as a regulatory technology company. We use technology to automate the cookie cutter aspects of making decisions about who you do business with, specifically companiesnot consumers, and that’s our sandpit.
Jessica Amir: Now to your FY17 results. What were some of the highlights?
David Cassidy: FY17 we saw continued increase in our revenue, we’re up 34 per cent across the year and that’s been important to us. We wanted to show the last couple of years that year-on-year, we can continue to increase revenue. We had some important customers come on board that preposition us for ongoing increasing revenue, in the ensuing years as well.
Jessica Amir: Now to your service offering in more detail. How do you differentiate from an internal offering?
David Cassidy: Most companies today, banks in particular, have used people to resolve issues around compliance and know your customer. What we do is pretty important. We’re connected to now over 180 business registers around the world. When you’re making a decision on a company surrounding KYC Compliance, the information in the business register has got legal veracity to it. Because most companies in the world are legally obliged to keep their information up-to-date in their business register.
So all this plumbing throughout the world, we access the information live number one, we store no data. Dun & Bradstreet are the player store data, we don’t, we go live. As soon as we go live, we turn on company watch. So if there’s a change to your information, your deregister whatever, we let our customers know straight away. And in the world of compliance where people are being used, technology doing this is like landing on Mars, it’s a big change.
Jessica Amir: And because of your unique service offering, over the last four months I believe you’ve won quite a lot of outstanding clients?
David Cassidy: There’s been a real turnaround in our business this FY18 year, at the start. Number one straight away, we’ve signed up Bloomberg Globally out of New York and that’s important to us. The validation we get from a customer like Bloomberg, to next go to every bank in the world is extraordinary for us as a business, up and above the revenue opportunity they present to us. In the last couple of weeks, we’ve also signed up IBM (NYSE:IBM) globally and they’re connecting usto their AI intelligence data sets, for all the banks to use around the world. So this has been a sea change period for our business.
Jessica Amir: A more general question now for you. KYC or know your customer as well as anti-money laundering have really been in the media spotlight. What does it cost banks annually when they do get it wrong?
David Cassidy: Since the GFC, US banks alone have been fined $320 billion. Indeed last year, HSBC Holdings (NYSE:HSBC) globally spent $3.2 billion themselves trying to manage the compliance obligation. And a lot of banks are on deferred fines. The things we’ve seen in Australia lately have been happening all over the world, so this is the runway for us. You know if you don’t manage your obligations, the fines are impending and also the regulators are getting stronger. And the regulation is getting more acidic as well.
So you really have to get yourself in line and the only way you can do that is to use technology. Yet using people is too challenging and it takes too long. It’s like painting the harbour bridge. As soon as you’ve started to paint it, it goes rusty and that’s what happens to your data here, it’s an issue of data lag. You’ve got to use technology to keep yourself live and current and accurate, as far as your compliance obligations are concerned.
Jessica Amir: Looking at the next 12 months and longer-term. What do you see happening for Kyckr?
David Cassidy: Having these global blue chip customers on board, it’s important that we show revenue coming from them and the sort of revenue that we would expect, as a result of having these global clients. So that’s important this financial year. And as a result of that, turning around the cash reach and the cash flow in the business and becoming profitable, through FY19. These are the outcomes I would expect us to see across the next 12 to 18 months.
Jessica Amir: David Cassidy, thank you so much for the update.
David Cassidy: Thank you Jessica.