Transforming Risk and Compliance: Kalyani Ramadurgam, co-founder of Kobalt Labs on AI's Role in Fintech

This episode of Banking on Information features Kalyani Ramadurgam, co-founder of Kobalt Labs, discussing how AI-driven automation is transforming risk and compliance operations in financial services. She explores future trends in fintech, niche markets, and the evolving role of AI in streamlining workflows and regulatory compliance.

Keywords:
AI, fintech, risk automation, compliance, financial services, Cobalt Labs, third-party diligence, regulatory technology, future of banking, niche markets.

Transcript

Welcome to Banking on Information, where we dive deep into the dynamic world of financial services and technology. Discover the innovative solutions driving the industry forward, explore the latest trends, and uncover the strategies that are reshaping the future of finance. Join us as we unravel the why, what, and how of solution providers in the financial services industry. Stay tuned for insights that will revolutionize the way you think about money and technology.

Hello and welcome to another episode of Banking on Information. Today with me is Kalyani Ramadurgam, the co-founder at Kobalt Labs. Kalyani, welcome to the podcast. Thank you so much. Excited to be here. So we talked a little bit about Simon Sinek and start with why. So that's going to be my first question for you. What is your why? Why do you do what you do? Yeah, I mean, I guess as a first preface, you know, what I do is I'm the co-founder of Cobalt Labs and we automate risk and compliance and financial services. And I think, you know, the why really comes from my love for technology. I think even financial services aside, you know, I've always loved AI. I've always loved seeing how innovative technologies can be used in just really exciting and magical ways.

So, I think that that's where it comes from the technology side. I think our application of, you know, what we're doing specifically with the company is, you know, in my experiences, you know, at FinTechs and within financial services. It was just so clear to me that there's such an obvious need for a lot of modernization in the processes that we deal with. And every time we demo our tool to a company and then they're like, I can't believe we weren't doing it this whole time. I think that just, it drives me every day. I think it's super exciting. That's great. And especially in this day and age of AI and AI just getting started, I think having that as your why, being excited about technology and how to apply it to business, I think is great.

So let's talk a little bit about then the what, what use case do you solve for with Kobalt Labs? Yeah, so our company is focused on, at a high level, we automate risk and compliance operations for fintechs and financial institutions. More concretely, we're focused on all things third-party diligence. So imagine you're doing any kind of vendor risk review or you're a banking as a service provider and you're doing diligence on a potential fintech to partner with. We can essentially ingest all of their documentation, their contracts, policies and procedures, infosec documents, And we essentially auto-scan all of it for you. We compare it against interagency guidance, against specific policies, and against your own internal policies. And essentially just say, hey, how risky is it to do business with this vendor or fintech partner and why?

And we cut out all of that manual work. Yeah, it's the easy button for third-party onboarding, which I was very impressed when I saw your demo at a conference. I really thought like, yeah, this is a great example, a great use case for AI, right? Lots of dense documents that otherwise people take lots of time to read through. Your tool does that very quickly and very accurately, and then compares it to all sorts of regulations. So that is great. Can you tell me a story of how your customers, where you've implemented the solution? Are getting value from it and and maybe just give us an idea of what that does and helps them do, and how much time they save or how much money they make with it, yeah absolutely I mean at the end of the day these partnerships, whether it's with vendors or fintechs, is a driver to revenue realization.

So I would say the main metric we look at is how number one like how much faster can you get to a partnership that's revenue generating and number two how can we increase your regulatory coverage and make sure that we're aligned with what regulators need? So I think to answer the first, we've generally found that for existing customers we've you know we've cut down their diligence to about a fourth of the time that they needed. The reason why is because let's say you want to know, how does this fintech's privacy policy, how do their disclosures compared to our internal disclosures? You can answer that in a minute. Or what is the recent negative news about this FinTech? We can conduct reputation checks in about a minute.

And so I think all of those time savers add up in a way that's very auditable and regulatory friendly. Yeah. Now that's great to think about it that way, sort of faster to revenue, right? Because, yes, obviously it also sounds like by doing it more efficiently, you might be saving some costs because otherwise it would take more time but actually getting to that revenue is very important these days, right? To sort of say, 'Hey, if I'm interested in a partner, I want to sign them up; I want to do it as quickly as possible, because it's going to add to my bottom line-that's very uh, very powerful. Now, the last thing I'd like to do is to do what we call futures thinking, which is, we don't know what the future is going to bring, but we can think about possible futures.

So if you think about 10 years out from now, um, so 2034; what does the banking market look like? How are we using AI? What are your thoughts on that? Yeah. Well, I think even just to start with the banking market, I think if we look at trends right now, I think fintechs and financial services are just becoming more and more niche, and entering markets that are more and more highly regulated. So what I mean by that is, we're currently seeing like a boom in operations and things like. Cannabis or gaming or crypto and I think that's just the beginning, like even right now those are so you know such hot issues and there's so much scrutiny and regulation around them that I think you know fintech is just going to enter more and more niches like that and there's going to be you know in a way it's so much more exciting but in a way it's so much more of a headache to figure out how can we

fit all of this together safely. So I think we're just going to see many, many more markets that are included under the umbrella of Fintech. And I think that's super exciting to me. And I think on the AI side, oh my God, it's honestly impossible to tell. I don't even know what some of those developments are going to look like one to two years ahead. So thinking 10 years, I just think there's going to have to be a complete paradigm shift in how we think about the role that we need to play. In a lot of the processes that we rely on, you know, like how much can we offload to really like robust automation services and free up time to just make really important decisions so I think the workflows are all going to just be completely different right.

So what are you doing today to get ready for that that future that you just envisioned? But what do people need to do today and how does Kobalt Labs help them to get ready for that possible future? Yeah, I mean, I see Kobalt Labs as a way for our customers to start incorporating cutting-edge technology. So, I would say if they want to start understanding how AI can actually, you know, give their team superpowers, instead of everyone independently doing that research like trying out new tools, we are a medium for you to kind of see what the future can look like, so we we try to just expose them and continuously, you know, upgrade our offering with what's available next.

And I think to get ready for the different markets, you know, we just make sure that we're incorporating regulation from all of them, so our tool synchronizes with all kinds of financial regulations across, across the globe, across jurisdictions, and so we make sure that we can pull you know, pull news from crypto, pull new cannabis regulations, and and make sure that we can cover everything that's coming. Yeah, no, and I would say you're absolutely right; everyone is sort of thinking about AI this is a great way to apply it, right? It's it's a thing that's going to help you save time, get to sort of signing up partners faster, I think that's that is a great way to try out AI.

So I would say to everyone that's watching, go try this out, because this is a great way to sort of see what AI can actually do for you today, right? And then you get ready for the future. Obviously, use of AI will be much more. Exactly. Yeah, this was great. Well, thank you very much, Kalyani, for coming on the show. Really appreciate your insights. And yeah, go check out the Kobalt Labs website and if you have any questions reach out to Kalyani or myself on LinkedIn. Thank you so much for being on the show; thank you. This was another episode of Banking on Information. Until next time, choose to be curious.