Fridays with Fintelekt: Robin Lee, Napier

welcome to this edition of Fridays with fintelect my guest today is Robin Lee head of APAC at napier.ai which is a london-based direct Tech at which he leads the Asian expansion for its AML products Robin is based in Singapore and is a very very well-known personality in the AML CFT International crime compliance space in the region having spent a number of years working in this domain and he also undertakes a number of community initiatives to keep the compliance folks together so Robin

welcome to Fridays with Switzerland thank you thank you for having me and thank you for the the kind words you're you're too kind sir you're too kind not at all uh so Robin idea I would say uh could you speak about your personal journey in the world of AML CFT and FCC and how the various career moves you had have shaped and impacted you uh to get you into the position you are in today and doing what you're doing today so in terms of my my personal Journey maybe

I'll I'll take it back to the beginning um and and start from there um no we've shared this joke many a Time Suresh but for those who want to wear my parents are actually from Malaysia uh but I was born and raised in the UK and so you know the number of times people have come up to me and said hey Robin you know you you kind of look like Jet Li but sound like Harry Potter um you know that's that's um that's the reason why ladies and gentlemen and um let me see all right so I graduated from King's College London

in mathematics computer science and management um my career actually started in Silicon Valley so as soon as I finished University I moved to the United States and I started out as a developer okay and and I and I worked while I was in the valley I actually worked at two startups which were very much aligned with this concept of compliance and regulations etc etc so the first startup I worked for we focused on Enterprise

software for the um uh healthcare industry and in particular we put together the first electronic medical record that could be used on the cloud and simultaneously transcription software and so for those of you who aren't familiar with this this area you know a doctor will will um what's it called dictate his or her um medical report and then the transcriptionist will take that dictation recording and type it up and

um and then that will form part of a medical record per se and so what I so I was one of the Developers for this software and um on my first spat with compliance was revolved around this concept whereby several doctors were Outsourcing the transcription side still all in our same platform using our software to a third-party company and often case this third-party organization would be in a different jurisdiction and

there were instances where you know the transcriptionist or the transcription company weren't happy with with how much they were getting paid and so as a way of threatening the doctors to to achieve attain that that pay higher called that that pay increment they would they would threatened to to publish those medical records that they have on the web and make them available to everyone and so was the the my first first brush with compliance the second company that I worked for

um we used to do um email archival and I say email as opposed to Communications because that's the only way we communicated back then I don't know that this shows how old I am where you know I send an email um to Suresh for example that gets archived um we have the ability to to stop email so if if market and timing for example were within like seven words of each other then then the email could get stopped someone could sit there and review their email and say this one's okay to go this one's not okay to go etc

etc um and and very much our customers then were were um financial institutions like trading houses and what have you done that require this this this sort of software so I started out as a developer within that six year period and then from there I moved on to the business side and I realized very quickly that coding wasn't what I wanted to do for the rest of my life and then um and then after that and then during this time I did an MBA part-time graduated from Santa Clara University and then

um made the move to Wall Street where for four years I worked in the hedge fund industry as an analyst covering technology companies um lots and lots of compliance exposure there whether that be from the we actually I started using the communications archival software to um you know we had a compliance officer in-house and would would tell us what we can and what we we couldn't do as analysts and who we could talk to even um and then of course there were there

was the whole um um financial crisis as well right where we see the market up a thousand points one day down a thousand points one another day and so a big part of of of that led me to to really question whether I wanted to be in this this industry anymore um whether I wanted to keep keep doing this because it was it was it was so hectic at the time and and you know I certainly lost a lot of um a lot of hours of sleep and probably as a result of hours of My Life as a result of that

um and so what I did after was I I um I my sister was living in Singapore at the time I really didn't know what I wanted to do so I came over here um and spent the first six months like sleeping on a couch and trading stocks at night to get by and then um and then after that I I I decided I wanted to stay in Singapore so staying in Singapore was the priority as opposed to what I wanted to do with my career and it just so happened that I I I found

this company called the international compliance Association um joined them really um had some some amazing opportunities from a digitization perspective so so we offered compliance learning um and um you could do like a diploma in compliance the diploma in AML and you know what what I really enjoyed about working there was I was given the opportunity to digitize that entire process and so you know we we would

offer I mean we would hold exams for example right we'd hire out a massive Ballroom guys would have desks like this big at the same time we were giving out five ring binders yay high and I'd see people like with the the ring binders sprawled up because there's open book exams and I was just looking at this again this is a a terrible user experience let's see what we can do to change this and it just so happens that that at the beginning of of this of of my my stint there um the the iPad Mini was released and I

don't know you remembered but when this came out it was it was super cheap shirish right it was the cheapest iPad on the market absolutely so cool you know people loved it and they they they didn't care whether it was like an you know know eight thousand dollar eleven thousand dollar course the fact that you get the latest iPad for free with the course was was was a big deal so we we did that and I designed the whole interface with iTunes University the digitization of the documents etc etc and we just gave away a free iPad and

and sales went up exponentially as a result of that I then also had the opportunity to take the membership that ICA had and digitize that into an app so I actually pulled in one of my guys from Silicon Valley and we we we we actually took my my colleagues um pregnancy tests app interface and then pulled that across to like um a a um a a really a really cool app which would um

be useful for compliance officers whether that be telling you all the latest regulations to um an exclusive you know if you if you have to go into the the member section of the app you're able to access all like your magazine articles your training et cetera Etc really really cool stuff um and then I I left ICA after three years um just to take the opportunity to start something myself and that's that's when we first met right Suresh when I started up the the governance risk AML

compliance and ethics Foundation we uh or the the there's an acronym Grace right we were a bunch of nerds back then that wanted to really improve the the compliance um Community experience and so we we um we we actually based uh Grace of um I don't know if you guys remember the night night rider the knights foundation and the the knig-ht stood for something I can't remember what it was exactly but

we we want to be cool like that right and we were we were focusing on video based learning um which in 2013 you know what was out at the time for video based learning was or or e-learning right was a bunch of PowerPoint slides that probably ran for about an hour with some guy just talking over us it was again user experience wasn't wasn't that great right and so what we did was we we tried to accommodate for the YouTube Generation

by making short one to two minute videos and one of my my first hires was actually a TV producer and we make sure that each of those videos was a different genre or style so that you just remember it better and it would range from you know anything like an animated video to someone talking in person with with um objects popping up in the background to even went as far as doing like the 70s Style kung fu movie Style video to

even a Korean drama Style video as well and the idea is that if you want to remember placement there in and and integration um the the Kung Fu video taught you that and you remember what the the Kung Fu guy did and the moves and what he said etc etc and then um it's just a a more positive should I say learning experience than what was on the market at the time um and then my my company was then acquired by one of the law firms in Singapore um and then after after overseeing that

integration um I then helped launch the the reg Tech scene in Singapore with a copy called Data Rama where we had um a visualization um again we actually took this from Google Maps right where we were able to expand the map minimize it but for ubo mapping and and um it was it was really really cool project to work on and that was then that I was actually headhunted to join what was then Thompson Reuters um now refinitive or or London Stock Exchange group to um

to head up the the strategy for Southeast Asia uh I did this and then I was there through the whole refinitive spin out um and then um it was then I started working very closely with with Napier Technologies um I then left um um refinitive to um help the US Department of Justice launch a public-private partnership that focuses on the fintech space called the fintech sector public dialogue um so we went to New York City we

um um what's it called um launched it with uh um uh the Federal Reserve in New York um in in their building and that still runs till till today with um The Honorable Karen Kenny um and then and then so after I left um refinitive and then during this whole time with the doj that was I was still in touch with Napier and then finally they said you know do you want do you actually want to come and launch Asia

for us and so I two and a half years ago I did that and that is where I am today we started off with well I started the company and joined as being the only guy in APAC and we had about 35 people in the company and today uh we have about 210 people in the company and about 60 people in APAC so um so yeah that's my story sorry about took so long Suresh but uh that's fantastic because uh no no absolutely uh absolutely fantastic uh Robin and uh it

was great to see uh the road that you had as well as you know what you managed to achieve for Napier in the last couple of years so uh Robin you know you regularly interact with compliance leaders across Asia right now uh what would you say are the top few key issues that keep them awake at night and also what are some of the high level industry trends that you're seeing yeah so so that's a there's a there's a lot to unpack there

um so I'll try and keep keep everything as as as as pristiness and and as sharp as possible I'll say that the the first one would be the industry changes themselves right so whether that be the the fintech revolution the ensure Tech Revolution uh wealth Tech etc etc so so there's definitely like a digitization of of Industries coming in and and it really depends on on which

compliance leader you are right if you're the compliance leader of a small startup then you know what's keeping you up at night is is are you going to get a license are you going to get established is the company going to be around in a year or two two's time right etc etc and then I I guess the the if I look at it from a big company big organization perspective it's you know are we still are we you know still relevant or is the is the organization really relevant enough to not have these

little guys come away and and and and eat away at us or or threaten us so that's the overall picture first of all and then as we we narrow down I would say that there are ever-changing regulations and so compliance leaders there's three things that they want to understand from that that front the why the regulation was done in the first place or was it like the emergence of a new predicate crime for example in the in the thin crime space or or is it because something happened or et cetera

et cetera why why are we having this change in regulation number two is what does this mean for me and my organization okay um and the third is how are we going to accommodate for it so you know our Napier for example we offer transaction monitoring and and there might be a regulation I mean there's one in Malaysia a while back that said that all cash transactions over 50 000 ring it need to be monitored or or logged and they brought that down to 25

000 bring it and so um um as far as as um Napier is concerned if you if you were using Napier you could actually change that in all our rule Builder right there and then we're all if you're using an older system you go back to the vendor and have them do that for you but that that's like that's an operational slash you know you know training and whatever how do you accommodate for that within your own organization so the why the what and the how

um I guess another thing that keeps keeps everyone up at night is is the role of compliance itself and how it's it's it's almost evolved over the years right I've been in this game now for about 10 years and I'm sure you've been in it for just as long right if not longer right and and we had this discussion the other day about how we how original compliance officers yeah well at least 15 years ago were sales people that couldn't make their numbers and didn't want to do sales anymore right and then it went from that to

lawyers who didn't want to do law anymore to more of an operational like Risk kind of role to the technologist right and if I was to take that latest one um you know what skill sets do you need for that you know we see a lot of Big Data courses taking off and and AI courses and and what have you um you know I had a panel and this is like four years ago now um where I was like one of the panels I

was moderating the header compliance said that that in in 20 years time the person that has my job will have to have a PhD in data science right so so I I guess that that that that skill set and and then do I have the right people and and mindset within my my team is another one um if the company is is large enough a lot of heads of compliance had to deal with internal politics right um you know is is is this

you know we you know some some companies are so big they have like almost Game of Thrones level politics happening right and and unfortunately the head of compliance is caught up in that or or has to to navigate through that and and then this this comes with the territory right the bigger an organization you're in the the the more politics that are going to be and and managing that is is is definitely um a challenge um especially not everyone has has has your interests or your organization's

interests um um uh-huh and then I I think the last one and this is this is a um this is more for a particular set of compliance offices there's a lot of compliance officers are are in the role um because they they really do believe in in what they're doing and so if I was to take the financial crime element for example a lot of compliance all of the officers um who manage Financial crime really do

care about the predicate crimes whether that's human trafficking uh um Wildlife trafficking uh environmental crime etc etc they really do care about that and that is something that that they and and I'm definitely aligned with these guys and feel this way myself um definitely feel that they could they could um make the world a better place per se or make their organization a better place at the very least with that mindset uh and uh you know uh what what are some

of the industry Trends you're seeing but uh what people do robin is uh you know towards the end I'm also going to ask you a bit about what we see going forward and maybe you could speak a bit about the industry Trends uh that time sure uh but you know uh you mentioned regulators and you know we um uh you know see a lot of stress by Regulators on reporting entities or regulated entities to ensure good quality of reporting right uh it's not just about quantity anymore now

obviously this is not going to be possible without the use of technology so where in the entire supply chain of transactions uh do you see technology adding value uh so as to help these regulated entities to comply better yeah so so um so when you first when you first discussed about you know actually doing this and and and we discussed this as a question Suresh I I love hard think about this and and it's almost as if you

know you're looking at the whole AML Suite in a way through that transaction and I kind of so if I was to compartmentalize this I would say that you have pre-transactions uh during the actual transactions themselves and post transactions right and so when you look at pre-transactions you know it could be anything from you know your your regular kyc KYB Solutions

um make ensuring that that they are um you know you're leveraging technology for the for that um and and there's different levels of of the full technology stack by the way right so what I'll do is it I'll say with with kyc you know the the we talk about ekyc there are a lot a lot of players in this market okay the barrier to entry to to doing ekyc is actually very very low

okay I mean even the cloud vendors offer the tools for this so so you and I could technically raise five grand those are solutions architects in I don't know Alibaba give them money and then the guy will just give us pull the tools off the shelf and say here you go you're you're in the market and competing right it's it's it's it's a very very low barrier to entry and there are lots of considerations that that you need to to take into account when using these

systems um for example there's one company I'm aware of that's using a Mainland Chinese company for facial recognition um and Eastern European company for document extraction right um a Nepalese company for for so so you know what I mean and these are all servers sitting in those jurisdictions that that are being leveraged right to to other organizations which which I

have have everything in in place you know the data is not going to leave the country etc etc so so there's there's that kyc factor there's the KYB factor and there's no Silver Bullet to this right until everyone but every jurisdiction sets up a UVO register or something of some sort and and everything is interconnected you've got a very hard time right um I mean forget the the ubo Regis some of them aren't even digitized right so

there are there are countries in Southeast Asia where they don't even have a centralized company registry you've got to go to the the um the map go to manually retrieve the records from The Province not even not not even like the capital The Province manually retrieve those company records just uh just to make any sense of of how they're structured right so so so there's that KYB element and and

and your overall fraud element that that rolls into that there's also what we call payment screening or transaction screening where you can stop incoming or outgoing transactions based off you know whether there's sanction entity sanctioned jurisdictions involved etc etc so that that's that's kind of how I would summarize the the pre-um transaction element right during the actual transaction you want as much details as possible okay

um and so that that's more of a data collection and ensuring that there's enough data around that and I'll talk more to that in a bit and then last but by no leases like your post-transaction um technology element whether that's transaction monitoring or the filing of strs to ensure that that's automated okay um so that's the breakdown of the actual transaction itself I would say that that if you really wanted to to go above and

beyond which is what many banks are doing as well you bring it all together and so what you what and what I mean by that is this concept of holistic AML whereby you um rather than than just taking the actual transaction you take all the other data and make that that transaction uh data a piece of the puzzle and have that whole profile on Suresh for example and almost so and so by doing that you're almost taking like a I guess like a Facebook approach right

it's like how Facebook knows who you like who you hang out with um who you um where you hang out etc etc because you're there blocking all of that you can have a similar approach to to AML where we have um we have we have all of suresh's data from an AML perspective and have that profile on him and they were able to spot anything that's that's out of the ordinary or or or unusual behaviors etc etc and then and in fact those accordingly

does that make sense uh yeah that does that does yeah so thanks for sort of uh you know breaking down into those three sections I think uh that was uh very useful and Robin you know you mentioned uh you know while answering the previous question that obviously you know when you look at compliance officers your uh sort of you know compliance officers uh of regulated entities of all sizes it could be like a small fintech a small bank or a large institution uh you know many times what happens is the lack of

scale or size or transaction volume is often uh cited as a reason for not adopting AML Technology Solutions uh you know you mentioned that in certain jurisdictions uh they are fairly uh uh you know I would say behind the technology uh so how can smaller Banks or smaller institutions or startups uh overcome this automation hurdle sure so the the the the the the first

thing I would speak to on that is mindsets okay um you know many and this is a big reason and a big thing that we've discussed at the the doj fspd right is is so I can't speak to small bands as much from this perspective but I can definitely speak to bintix whereby you know it's it's actually not too dissimilar to how how people thought of compliance when I was starting out or probably when you were starting at Suresh right it's a pain business

prevention cost center etc etc but what I find especially well especially prevalent in the on the fintech side as we see many Founders right not even the compliance officers but Founders um take that view but also have the view that they can cut Corners as well right um they would they would look to people like Facebook Mark Zuckerberg you know what he says um move fast and break

things right so so it's like let's move past and break compliance or break AML it's like no no no you you can't do that this is this is financial services right you by by operating as a fintech or a small bank right you are a gateway to the financial in the financial um system right and and and if you want to be a player in the financial system you need to understand that we need to keep the bad players out right and uh

um not bad place sorry Bad actors out bad people out right um and so I I think I I think that that mindset is would be number one number two would be knowledge right um look and and and and yeah this isn't I'm not paid to do this but you know signing up to bintelect and watching a video you know fintelect offers like the Netflix for compliance training in a way right with your videos right so and and it's

and it's and it's not it's not super expensive either so I would put I mean if I had a 10 person fintech and I was I was looking to launch I'll put everyone on thin to legs and and say everybody every everybody this week we watch this video next week we watch this video etc etc so that so everyone's in that that mindset and has the training um um for that that that that that um that AML um angle um and then look um when we look at the technology

itself you know how do you view AML automation right if you if you actually sit back and do a a cost benefit analysis right is it is it going to be cheaper for me to have an ekyc system that costs I don't know a hundred thousand dollars or or am I gonna hire five people to go through documents and and what have you um and and pay them fifty thousand dollars each right when you actually do the numbers the cost benefit analysis

technology actually comes in and and can help you save a lot of money um and and I guess last but by by no means lease um you know for for Solutions like like Napier right the way I would describe this is that we are the iOS for financial crime where we have a platform we have different apps that sit on our platform all the apps talk to each other integrate Etc you don't have to buy all the apps at once right just

get the ones that you need right it's it's pretty cost effective if you if you if you do that and then later you can start adding adding apps later down the line and and have everything within that that system if if cost really is is a factor sure sure sounds that sounds good uh Provident anyway thanks for the plugin to fintlug by the way that was a problem it's no problem I'm just kidding so uh Robin you know uh obviously you

work with customers in many countries and you know you've probably noticed that you know some customers uh have a better AML compliance uh you know that is uh you know more effective than some other institution right someone has a some of them have a better Mouse Club uh internally you know what factor of factors would you attribute this to sure um so there's there's um you know

it's the jurisdiction itself and what are the regulations it was to get back to First principle um you know really mentioned right some some jurisdictions have way more regulations than others you know For Better or For Worse um and so so you know the less regulations you have the the less of a solid compliance uh program you need especially if you only operate in that particular jurisdiction right um the second I would say ties into my

my previous the previous question where it's really down to the approach of the organization themselves and how seriously they take AML um I'll say another would be how much money do you have right how how well funded is your organization I mean there's a reason why you know as as fintechs get bigger and bigger and bigger uh you know and scale up more and and and and and and come into more money that they're that that they're poaching compliance officers

from Banks right I'm not saying that a banking compliance officer is is better than uh uh a fintech compliance officer but because they got a lot more to deal with and and the perception is that you have you have um um you know more substance here um versus this right um so how much money do you have right because that will that will affect the quality of the the team that you you you you you bring in um I would say that there's what comes with

with uh the compliance program is the the understanding of of technology and the quality of the technology team as well right if your technology team is is lacking um then and you aren't able to do what you've got to do right to to you might have to make some changes to the the the policy accordingly you should not have to be done that way you know you you should you should write the policy first and then everything else should should line into that but hey sometimes you run

into situations where where you can't right and then um last but by no means least is another plug with intellect here but overall education right um some some teams are are definitely more educated than others and in fact if I can go back to the the fintech versus banking example right I mean this definitely isn't the case now but I remember when the fintech um scene launched um circa 2014 2015 you know the head of compliance would be a university grad

straight out of uni right and um so you compare someone like that to someone who has 20 years banking experience that's what I'm talking about yeah right right yes make sense uh Robin so you know we usually these days can't do any episode without talking about the pandemic so you know you notice that the pandemic has actually uh accelerated certain Financial crime Trends uh especially in the area of new payment systems and digital Banking and virtual assets now uh can you share your

thoughts on how regulated entities uh can or should be uh better prepared to identify and deal with these uh risks so first and foremost education and knowledge understand the products understand the industry so if you're a bank and you're setting up a um a digital asset custodial service within your bank then you really better understand this thing to death right um

so I would say that that so once you understand the the the arena that you're entering or or or dealing with Etc um next step is is having the the um the skill set uh and experience to write the policy to that okay so you you then come up with the the appropriate policy and then you bring in the technology which is where we come into play right and then from the the technology perspective it's

understanding uh what functionalities are available are not available picking the right vendor um a big one for me is this concept of holistic AML that I talked to earlier where someone like Napier could integrate you know all the various crypto um um equivalence right um that whether it be kyt whether it be um um what's it called um like the investigative tools etc etc into into

our system adding it to our data set and then being able to report on that or integrate that into your risk assessment into your risk assessment um accordingly um and then I would say the the last one and the type kind of ties into what I mentioned earlier is the recognition of skill sets especially right a fraud officer is actually very different to an AML officer right in terms of of what's required um but unfortunately you know many of

the the the the the new school hidden texts and whatever put it put all Financial crime in the same bucket I think that that that one could do the other but it's actually very very different right and so the systems that come with that are very different as well right yes yes yes so uh you know in closing uh Robin you know going back to uh one of the points that we was being able earlier I mean what would you say uh are some of the industry players what news would you

say is the uh outlook for 2023 especially when it comes to AML technology deployment yeah so so look um I think that that before we even begin with with AML technology if you just look at the overall landscape of of what's going on in the economy right now right interest rates going up okay

um um inflation is going up okay um we're probably gonna head to a recession a global recession again um and so what comes with that is we're going to see a lot less spintex a lot less startups right the startup sector will definitely be affected I mean we've we've essentially done what like 10 15 years of zero percent interest rates right so so now that we're coming out of that and and and and everything suddenly going up

we're going to see less less startups as a result of that or and so current startups will be affected you know quite dramatically as a result right everyone will be affected by it right I mean those of us who have mortgages for example you know our monthly payments are gonna gonna start going up um you know I guess but I I don't know if it'll hit 80 you know the point in the 80s where interest rates were 20 and it was actually worth putting your money in

the savings account as opposed to investing in any anything speculative right but um but you know it looks like it's it's it's heading there right now and so what that means for for AML so let's talk about you know the the predicate crimes first of all criminals will take advantage of this and adapt they always have right they adapted during the pandemic and they'll adapt to this okay um I think we those fintechs that that

are able to make it or have a chance of making it some guys will will definitely you know start cutting Corners right that's a it's survival mode as opposed to to you know what it was before um one thing that is interesting though about this time so that will happen but I think um the the the the other aspect to consider here is that this is when you know during the Go-Go years when

everyone is perceivingly doing well this is times like this is when we see um as Warren Buffett like to say who's swimming naked right and and um when the tide comes in and and and so we will um we will definitely um um see more blow-ups right we've already seen FTX right when crypto goes down the steam blows up but but I think we'll see more more blow-ups of that nature and it's not necessarily just restricted to

the crypto space right and so so as a result of those blow-ups that's when regulation tends to to adjust accordingly and and and and and and and and so yours are not my my customers will will be affected as a result of that um and then if I was to talk about the AML deployment angle I would say that um this is when this is a great time with the newer cheaper Technologies can

really or more effective technology not necessarily cheaper but more effective Technologies can come into play uh so for example with Napier you know we we we are architected with kubernetes right which means that we could be deployed on-prem on cloud Prem on cloud as a managed service we can you can copy in your paste your software all around and it doesn't matter as far as the end user is concerned they won't see see anything any change right because we use containerization within that

um we will see holistic AML already come in and and have that full client 360 reviews Perpetual kyc um AI insights all that all that stuff really really um continue to to grow because it you know a time when there's there's um less money available you kind of have to look to the technology side right to to see if if automation can can help you play a part right yeah I think that's it off the top of my

head yeah that's that's great Robin uh and you know on on that note uh you know thank you so much for joining in today uh sharing your thoughts like I said we've known each other for a while now right and we haven't we haven't done one of them before so this is sort of absolutely yeah we get to catch up here yes yes and hopefully I'll see you in Singapore soon uh and until then take care sounds good thank you sir goodbye and thank you everyone for watching