Signicat Acquires UK-based anti-fraud and identity firm Sphonic

Acquisition will strengthen Signicat’s protection for banks and other customers against fraud, financial crime and money laundering

Posted 28 April 2022 by Christine Horton

European digital identity firm Signicat has acquired all shares in UK anti-fraud company Sphonic for an undisclosed sum.

Norwegian-headquartered Signicat aims to be a single provider for the entire digital identity and anti-financial crime lifecycle. This includes identity solutions to support customer onboarding, authentication, e-signing, fraud management and risk management.

The company has grown rapidly in recent years, both organically and through acquisitions. Since 2019 Signicat has acquired five companies, including in the last year mobile authentication company Encap, electronic signing provider Dokobit, and identity proofing innovator Electronic IDentification.

Sphonic was founded in London in 2012, specialising in automating compliance decision processes. It counts financial services, fintechs, gaming operators and the payments ecosystem as customers, enabling them to manage their client onboardings and risk assessments including activities such as credit checks, affordability checks, and other compliance checks.

With this acquisition, Signicat will be able to extend its existing identity platform with Sphonic’s know your customer (KYC), know your business (KYB) and anti-money laundering (AML) solutions.

“With digital fraud continuing to rise globally, it has become critical to know that your customers are who they claim to be,” said Asger Hattel, CEO of Signicat. “With Sphonic’s leading team of professionals and their data orchestration and decisioning platform, we will be able to offer a more extensive range of onboarding services with highly flexible risk and compliance solutions – all of which can keep international customers safe from fraud.”

‘Complementary fit’

Sphonic’s primary product, Workflow Manager, enables clients to customise, automate and manage compliance workflows seamlessly. Sphonic works with around 100 data and technology providers globally, allowing banks and other institutions to access its technologies via a single API. It claims its solution improves the quality of data and increases end-user insights that the customers can use to make an onboarding decision. It also reduces a client’s customer onboarding time from days to seconds and prevents customer drop-off rates.

The company recently expanded its solution offering with a scalable real-time fraud & AML transaction monitoring solution in addition to a case management system that also offers tools for visualising identity, fraud and AML data.

“We are excited to become part of the Signicat family,” said Andy Lee, the founder and general manager of Sphonic, in a statement. “For the past 10 years we have built industry-leading solutions that solve some of the most complex onboarding and compliance challenges in heavily regulated industries for global digital payments, crypto, gaming and lending brands requiring rapid onboarding for their high-volume client base. With Signicat there was a great complementary fit. Now we are ready to accelerate our ambitions in new markets and verticals and creating a compelling joint global solution.”

Sphonic will continue as a separate business entity, named “Sphonic, a Signicat company”, for the short term, and then be fully integrated into Signicat. The Sphonic management team will form part of Signicat’s wider senior management team and Lee will also take on the role as as Signicat’s UK country manager.

Existing management shareholders will reinvest a substantial part of the consideration into Signicat.