In recent times, the Silicon Valley Bank and FTX collapse shined some light on the instability of the financial system and the need for better regulation. That’s where companies, like RegTech company Identitii (ASX: ID8), become integral.
Identitii has signed a new software licence agreement with leading Australian B2B payments provider Monoova Global Payments. Monoova will use the Company’s SaaS cloud-hosted reporting platform to help automate and improve how “auditable” its reporting obligations are for AUSTRAC (Australian Transaction Reports and Analysis Centre), the country’s government’s financial intelligence company keeping tabs on any financial crimes.
Founded in 2014, Identitii automates financial crime compliance for optimum transparency—to highlight money laundering, terror funding and such—and reduces your exposure to regulatory risk. The Monoova contract is worth $60,000 in annual recurring revenue and is initially for a year. It will automatically renew for another year, and either party can end the agreement for any reason with 60 days written notice.
CEO of Identitii, John Rayment, commented, “Identitii’s SaaS platform was built to accelerate revenue growth, by enabling us to better target and rapidly onboard multiple, faster-moving payments companies who are themselves experiencing strong growth and need to ensure they can meet regulatory obligations as they continue to scale. Our relationship with Monoova validates that investment decision and our pipeline reflects the increasing market demand for our solution among these types of organisations.”
Monoova is an Aussie company, enabling businesses with large, ongoing transaction flows to manage payments automatically, through one simple API integration. Since 2017, its proprietary payments platform has processed more than $72 billion. The decision to adopt Identitii’s platform is part of Monoova’s goal to automate its financial crime compliance operations.
Commenting on the announcement, CEO of Monoova, Christian Westerlind Wigstrom, noted, “Our partnership with Identitii is just one way that we are demonstrating our commitment to continuously reviewing and improving our regulatory compliance programs. Providing fast, digital payments at scale means we need best-in-class compliance programs to ensure we can meet demand and continue to provide innovative new solutions to the market. We are investing across the business to make it easier for customers and regulators to work with us by streamlining and automating compliance.”
This is an important contract for Identitii which is slowly recovering from a loss-filled 2022. In H1 FY23, its loss increased by 99% to $3.4 million. It had to make some difficult decisions to cut costs. In early Q2 FY23, the Company announced that management had implemented a restructuring of the organisation resulting in annualised cost savings of $3 million.
Plus, its total cash outflows from operating activities were down $2.4 million on Q1 FY23 and down $600k from the same quarter last year (Q1 FY22 – $900k). To achieve that, the Company not only reviewed its management but also had to cut employee and supplier salaries.
Additionally, it expanded into New Zealand and pursued other commercial opportunities with two banks in Australia and two banks in New Zealand, four international payments companies and two fintech companies, plus three technology companies looking to provide regulatory reporting services to their suite of existing customers.
As more companies seek automated compliance help, Identitii’s expanding customer base might make it a popular choice.
Alinda is a Business Reporter for The Sentiment
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