With stricter guidelines and bigger fines, fintechs have greater demand for compliance support

Lorikeet News Desk

published

February 12, 2025

Credit: Oxford Seed Fund/Arva.ai

Key Points

Global regulatory guidelines are becoming stricter, prompting financial institutions to seek efficient risk mitigation strategies.
Arva AI offers AI-enabled business verification to automate compliance tasks, helping banks and fintechs meet regulatory requirements.
CEO Rhim Shah emphasizes the importance of AI in enhancing compliance, efficiency, and decision-making speed for financial institutions.

Fintechs and banks understand that AI is a competitive advantage they need to have.

Rhim Shah

CEO and Co-Founder | Arva AI

When TD Bank was charged a historic $3 billion fine for failing to detect money laundering, failing to meet regulations became the greatest risk to banks and fintech companies.

Strict regulatory guidelines are striking globally and causing stark repercussions for institutions that fail to meet requirements, leaving banks and fintech companies in search of sharp, efficient risk mitigation.

Global regulation: "Regulators across multiple jurisdictions, UK, US, are getting stricter. There is an increasing need to reduce manual efforts and optimize costs right alongside a growing adoption of AI," explains Rhim Shah CEO and Co-founder of Arva AI. "Fintechs and banks understand that AI is a competitive advantage they need to have."

Arva is a YC-backed AI-enabled business verification for banks and fintech, helping clients automate 80% of manual compliance tasks. They aim to fill in the gaps that brought swift action against banks like TD Bank. Arva recently raised $3 million from Google's early-stage AI fund.

Shah notes while the biggest risk facing bank and fintech clients going into 2025 is mitigating risk and following regulations, "products still need to be built in the right way, where trust can be generated and created." From initial client feedback, this is where banks and fintech in need of compliance support, and AI have leaned on Arva as a trusted solution.

On every front, it's about improving compared to what humans can do. We're strengthening compliance, improving efficiencies, reducing costs, and also increasing revenue by increasing the speed of decision making.

Rhim Shah

CEO and Co-Founder | Arva AI

Rim Shah on compliance approach: Arva AI’s compliance solutions are built on a three-pronged strategy:

Auditibility: All decisions are auditable, stored, and logged.
Confidence Scoring: Assigning a confidence score to every decision, with low-confidence cases flagged for human review.
Human-in-the-Loop: Integrating human oversight for important decisions while aiming for full automation in low to medium-risk processes in the future.

RS on Compliance and Efficiency: "The use of artificial intelligence is perfect in this space because it's not just about reducing manual efforts and improving efficiency, but also about increasing the strength of compliance" Shah says. "Our AI can see things that even humans often can't."

As fintech and banks expand their efforts in 2025, the need for scalable, efficient, and robust compliance solutions becomes more important than eve. "On every front, it's about improving compared to what humans can do. We're strengthening compliance, improving efficiencies, reducing costs, and also increasing revenue by increasing the speed of decision-making," Shah concludes.

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