Shares in Kyckr (ASX:KYK), one of the few regtech companies on the ASX, rose nearly 20 per cent today after unveiling its latest partnership and spruiking the industry’s potential.

Regtechs are companies that help other companies comply with regulations like anti-money laundering and counter-terrorism financing (AML/CTF) laws.

Kyckr provides KYC (know your customer) services which are crucial for many banks and financial institutions to ensure compliance with AML/CTF laws. Specifically it provides live intelligence software which helps companies with compliance.

Today it unveiled a deal with BAE Systems Applied Intelligence which provides intelligence services such as cybersecurity and financial crime detection services.

BAE product director Peter Fisher said partnering with Kyckr would give his company a competitive advantage.

BAE already has a KYC solution, called NetReveal, but partnering with Kyckr would allow automated screening of corporate records data.

“The result is effective investigations, better detection and ultimately, a smoother end customer experience,” Fisher said.

 

More demand for regtech services

Industry fines on regulation breaches are getting larger and larger with Westpac (ASX:WBC) copping a record $1.3 billion fine for AML/CTF breaches last year.

Furthermore, the regulations are too.

One upcoming change, scheduled to be implemented on October 5, is that ASIC will require issuers and distributors of financial products to have an adequate product governance framework to ensure products are targeting the right people.

This has been tipped as positive news for regtech companies more generally, including on the ASX, and Kyckr echoed this sentiment today.

The company said its latest client win showed there was demand for KYC information and that the industry would keep growing.

It cited research showing the global KYC market would surpass $1 billion by 2026 and would grow at a compound annual growth rate (CAGR) of 22 per cent between 2019 and 2027.

“We look forward to continuing to provide leading services in KYC compliance,” declared Kyckr executive Myles McLaren.

Kyckr shares rose by up to 20 per cent in early trade and are up 50 per cent in the last 12 months.

One of ASX’s other listed regtech firms is Identitii (ASX:ID8), which has a blockchain-based tool that is designed as an entire peer-to-peer payments ecosystem. Its shares saw a slight boost today and are likewise up by approximately 50 per cent in 12 months.

Another is iSignthis (ASX:ISX), which is also in the KYC space but has been suspended for nearly 18 months now.

Kyckr (ASX:KYK) and Identitii (ASX:ID8) share price chart

 

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