Making it Work: Tech company looks ahead with advanced solutions to problem of money laundering

DX Compliance, the Dublin-headquartered company which provides anti money-laundering (AML) software to banks and fintechs, is planning to hire up to 40 new staff in the coming year.

The firm, founded by Simon Dix and Daniel Doerr, has grown by more than 350 per cent annually over the last number of years and now sells its regulatory technology (RegTech) software to customers across three different continents.

The business, which is supported by Enterprise Ireland, is not seeking to raise capital and is instead hoping to grow organically. Its product, according to the founders, can change how financial institutions deal with money laundering.

Dix, a lawyer by training, is originally from Britain and was working as head of AML for Fidor Bank AG, the German challenger bank, when he had the idea for a new, more advanced solution.

The reason, he said, was that the technology the bank was using to automate its AML efforts was no longer fit for purpose. While the bank was working with cryptocurrency companies and offering advanced technology to its customers, its own systems were “legacy, archaic, and really old-school”.

As a result, Dix added, the bank was regularly dealing with the German regulator because its technology couldn’t keep up with the “super-advanced products we were offering”.

That was seven years ago. DX Compliance has been operational since 2018, having established itself in Ireland due to its “strong talent pool” and track record of producing successful tech companies.

While AML compliance is a “pretty hot area”, Dix said other companies providing similar services have a different focus. Many of its competitors attempt to court bigger retail banks, but DX attempts to work with smaller companies with different sets of needs.

Where existing AML solutions have typically focused on securing a bank’s “on-boarding” process – ensuring that the person signing up is who they say they are – DX takes a different approach.

“We focus on the part of the process where the money is being laundered,” Dix said.

“We give the clients that we work with complete control over what and how they monitor those things.”

Different institutions have vastly different requirements when it comes to ensuring their platform isn’t being used for money laundering. DX offers solutions that meet a company’s needs rather than applying what Dix called a “one size fits all” model.

“On average, we integrate 67 to 75 per cent more data,” he said. “We’re looking at a much wider and richer pool of data for things that indicate risk in transactions.”

DX is focused on providing solutions to companies in the financial services space, but its software is particularly advanced, and the company has been asked to aid insurance companies and even national governments with analysis to help identify suspicious activity.

“We’re being asked to go and do all sorts of odd things,” Dix said. “We’ve now realised we can turn [the company] into something so much bigger than even we thought we could at the beginning.”