Dublin fintech Fenergo makes first acquisition with Sentinels

25 Apr 2022

Fenergo chief Marc Murphy. Image: Alan Betson/Fenergo

Amsterdam-based Sentinels was snapped up for a reported eight-figure sum to boost AML monitoring for Fenergo clients.

Irish fintech Fenergo has announced the acquisition of Dutch compliance tech company Sentinels to help its clients boost anti-money laundering (AML) efforts.

Launched in 2019, Amsterdam-based Sentinels uses AI for intelligent transaction monitoring and data-driven compliance in a financial industry that is facing increasing regulations and rising crime. Its 70 employees will now join Fenergo.

The value of the deal was not disclosed but it is believed to be an eight-figure sum, according to the Irish Times.

It will enable Fenergo’s clients and financial institutions to combine know your customer (KYC) profiles with client behavioural data, allowing continuous KYC monitoring for due diligence.

‘Blended approach’

The acquisition, Fenergo’s first since it was founded in 2008, will also help Sentinels scale its technology rapidly and expand its global footprint.

Fenergo CEO Marc Murphy said that Sentinels is “an ideal fit” within his company because of their shared goals of aiming to solve the “increasing compliance and operational challenges” facing financial institutions today.

“By adding transaction compliance to our existing client onboarding and product origination solutions, financial institutions can monitor and review client behaviour and identify risks on an ongoing basis,” Murphy added.

“This blended approach to financial crime makes us perfectly placed to address the rising compliance challenges faced by financial institutions more efficiently.”

Rising cost of compliance

Fenergo cited research by advisory firm Celent last year, which suggested that 63pc of financial institutions expect budgets to increase for financial crime and fraud, with 17pc anticipating an increase of more than 5pc. Celent also found that overall spend for AML and KYC technology has increased by 13pc since 2020 to $10.7bn.

“With compliance costs surging to unsustainable levels, being blindsided by increasingly sophisticated criminal activity is simply not an option,” said Sentinels founder and CEO Joost van Houten. He added that financial institutions need to “break through data silos and start assessing client risk holistically”.

“The combined force of Fenergo and Sentinels will ensure leading financial institutions and the fintech disrupters are best equipped to navigate the complex regulatory environment and fight financial crime.”

Fenergo is one of Ireland’s tech unicorns and a previous Tech Ireland tech company of the year. It develops software to help financial services firms with everything from initial onboarding to regulatory compliance and data management.

After being acquired by Astorg and Bridgeport last year, the Dublin-based fintech announced in January that was hiring 61 people in Ireland to scale its SaaS technology faster as its annual revenue edges closer to the €100m mark.

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Vish Gain is a journalist with Silicon Republic