Copenhagen, August 2023. The Danish fintech company, Qvonto, launches a new AI solution to automate the ever-increasing compliance burden for Europe’s financial sector and eliminate the risk of regulatory fines. “We can remove 90% of the manual tasks that the financial sector spends on compliance,” CCO states.
This year, the European Union rolled out new requirements for PRIIPs’ KIDs which meant that banks and other financial companies must prepare a new set of detailed and complex documents for all non-professional investors when offering investment products. Failing to comply could cost them up to 3% of a company’s annual turnover.
Simultaneously, new standards for the Sustainable Finance Disclosure Regulation (SFDR) entered into effect, laying out comprehensive and in-depth rules for sustainability-related disclosures for financial products distributed in the European Union.
Since 2011 and the wake of the great financial crisis, compliance requirements for banks have exploded. The cost of compliance for financial services companies has increased by a staggering 193% and leaders expect an additional 30% increase over the next two years.
To deal with this excessive compliance boom, Qvonto’s two managing partners, Sinan Gabel and Christian W. Lysholm have used their more than 30 years of experience from the European financial sector to develop an AI-driven solution that automates compliance processes and auto-generates compliance documents such as PRIIPs’ KIDs and SFDR documents to relieve financial institutions of a huge administrative burden.
“Banks and investment companies must live up to very complex regulatory demands. They can have several hundred investment funds. These funds can be sold in 5-8 different European countries and are demanded in 10 different languages. This very fast adds up to thousands of different PRIIPs KIDs that must be produced and updated over time,” says CCO in Qvonto, Christian W. Lysholm, and elaborates:
“Thanks to the latest developments in generative AI, we have launched a new solution that removes 90% of the manual resources banks spent on compliance, so they instead can focus on their core: Creating the best investment products for their clients.”
In its essence, Qvonto has developed a document generator that enables bank employees to auto-generate compliance documents in just a few seconds and have them legally reviewed by an artificial intelligence powered by the new GPT-4 technology. In that way, banks can achieve a cohesive, consistent, and error-prone compliance regime across the entire organization.
So far, Qvonto has customers in Luxembourg, Switzerland and the Nordic countries where the response has been overwhelmingly positive.
“The regulatory document automation with Qvonto enables us to remain in full regulatory compliance with our extensive impact investment fund universe. Qvonto’s solution really helps ensure that all regulatory documents in multiple languages are updated and monitored so that our investor material is of the highest standards at all times. Further, the solution ensures that we can maintain hundreds of documents with a minimum of resources,” states Michael Seemann, Director Investment Products in ThomasLloyd Global Asset Management, Switzerland.