DX Compliance: First Irish start-up to secure place in Dubai’s FinTech Hive

Prestigious accelerator provides Irish RegTech, DX Compliance, with launchpad for Gulf-region growth

Irish RegTech DX Compliance has scored a first for Ireland by securing a place in the Dubai International Financial Centre’s FinTech Hive accelerator programme. It’s the premier financial technology accelerator in the MESA (Middle East, Africa and South Asia) region. DX Compliance Solutions helps banks and financial institutions to avoid regulatory fines. It secured its place on the accelerator programme amid a record number of applicants, up from 425 last year to 620. The surge in demand for places reflects the DIFC’s reputation for nurturing financial innovation across FinTech, RegTech, InsurTech and Islamic FinTech.

Since the launch of FinTech Hive in January 2017, the hub has become a leading centre of innovation globally, supporting the DIFC’s efforts to transform the future of finance. More than 50 per cent of all FinTech businesses in the Middle East and North Africa now operate from DIFC. The first half of 2020 alone saw DIFC FinTech Hive triple in size. The FinTech Hive programme is managed in partnership with Abu Dhabi Islamic Bank (ADIB), First Abu Dhabi Bank (FAB), HSBC, Emirates NBD, Dubai Islamic Economy Development Centre (DIEDC), Visa, Wall Street Exchange, Standard Chartered Bank, Mashreq Bank and Emirates Islamic Bank (EIB).

Selected participants benefit from support, business guidance and mentorship from more than 30 ecosystem partners. These include data firms, funding partners, technology companies and strategic advisors, business associates and community partners such as Middle East Venture Partners (MEVP), Wamda, Global Ventures, IBM, Microsoft, Amazon and more.

Key technologies among the latest cohort of applicants included contactless payments, digital ID, treasury management solutions, credit underwriting automation, data management and analytics. Of the 620 companies that applied to the accelerator programme, 30% were from UAE-based firms. Just under half (46%) came from the Middle East and North Africa region, with the remainder of applications coming from global firms, predominantly Indian FinTechs.

In becoming the first-ever Irish start-up to secure a position on FinTech Hive, DX Compliance Solutions was supported by Enterprise Ireland MENA, the government organisation responsible for the development and growth of Irish enterprises in the Middle East, which is based in Dubai.

DX Compliance Solutions is one of Enterprise Ireland’s High Potential Start Up (HPSU) companies. “Enterprise Ireland has been a key partner in establishing a presence and exporting into others markets,” says Simon Dix, founder of DX Solutions. “While the financial support available to HPSU companies such as our own is of huge value, the support and dedication of the Enterprise Ireland team in markets such as Germany and the UAE has been a huge benefit for us.”

That support is helping it to capture the wider opportunity in the Gulf region. “Using the UAE as a base, where we are now focussed on serving initial customers in the region, DX will then expand into the GCC and wider MENA regions, with interest already coming in from markets such as Bahrain and Saudi Arabia,” says Dix.

Solving a billion-dollar problem

DX Compliance Solutions helps banks to reduce the loss of millions of dollars in regulatory fines each year, typically for breaching AML (anti money laundering) regulations.

“They are breaching them not because of anything to do with on-boarding but because their ongoing monitoring, which they are required to do, is still very manual and uses a lot of legacy systems,” he explains.  “These are not user-friendly, not process friendly, and incredibly time-consuming to undertake.”

By September 2020 some USD 706m in fines will have been handed down globally to financial institutions this year alone. “Realistically we can expect that to be more than one billion dollars by year’s end,” says Dix.

It’s a problem for legacy banks, challengers and FinTechs alike.

“Legacy banks are best placed to pay the fines but are slower moving, take more time to solve problems and are more limited by regulations. Challenger banks are trying to solve the issue themselves but have a much deeper need to secure their reputation,” he continues.

Dix, a lawyer by training, is a former head of AML and compliance at Germany’s first challenger banks. The start-up’s solution gives banking clients complete control not just to detect known patterns of criminal activity among transactions, but to identify new ones. It does this by highlighting various points of risk, taking in over 200 data points, and rendering them in a clear, visual manner.

DX Compliance Solutions works on a bespoke, partnership basis, he says, typically with customers who have a naturally higher risk to their portfolio. It began trading in 2019 and is now active in Ireland, the UK and Germany, as well as in the United Arab Emirates.

Securing a place on the DIFC FinTech Hive accelerator programme will help it capture the growing opportunity the MENA region offers.

Says Dix: “We have just secured a partnership with a major international player in the region. We are also talking to regulators in the wider Gulf region with a view to being actively used by regulators here as a way of benchmarking and combating crime.”