Below is our recent interview with Joe Robinson, Co-founder of Hummingbird:
Q: Can you tell us what your company does?
A: Hummingbird is a platform for managing anti-money laundering (AML) at financial institutions. Compliance professionals use Hummingbird to collect case information, conduct investigations, and report on unusual or suspicious behaviors. Our platform eliminates repetitive tasks and dramatically simplifies workflows, resulting in a 10–15x reduction in average time per case. This enables AML investigators to refocus on fighting financial crime.
We find that even the most modern, tech-forward financial institutions struggle with AML compliance. Investigations and reporting are a lot to manage. Teams get overwhelmed with paperwork and spreadsheets.
Hummingbird makes everything more efficient and adds intelligence throughout the process. We help our customers reduce risks associated with AML compliance while cutting costs.
Q: How did you start Hummingbird, and where did you get the idea for it?
A: The Hummingbird team came together in June 2017 and combines experience on both the regulatory and technology sides of the industry. Our leadership team includes former regulators, payments executives, and senior technologists from organizations like Square, so we have a unique blend of expertise.
Our experiences in the financial industry as both company operators and regulators helped us spot the opportunity for innovation in anti-money laundering. AML investigations can be very complex, and compliance teams need to conduct a lot of them on tight timelines.
Today, many institutions conduct their investigation work manually in spreadsheets, and the process of gathering, formatting, and copying case information between systems can be overwhelming. Additionally, the explosion of new financial technologies like mobile banking, cryptocurrencies, and new customer acquisition channels has made investigations more complex.
We conduct extensive user experience (UX) research with companies in banking, payments, cryptocurrency, and lending. We go deep and really understanding the data, workflows, and constraints that characterize their work – this research highlights pain points and upcoming needs for AML investigators. Coupled with our team’s expertise, our research has helped us create a platform that addresses the most pressing needs of AML professionals while simultaneously preparing the company for change and innovation in financial services.
Hummingbird is a platform built for the needs of modern financial institutions. We’ve been in the shoes of our customers – we’ve set up AML programs, conducted evaluations of many vendors in the space, and know the tiniest details of regulations. We’re combining our knowledge of the industry with our product development expertise to create a next generation AML platform.
Q: What’s your revenue model? How are you funded?
A: Hummingbird is a Software-as-a-Service (SaaS) platform that can be purchased on a subscription basis. This business model empowers us to consistently provide our most advanced functionality, support changing regulatory requirements, and keep our systems secured against evolving attacks.
Many financial institutions are now undertaking “digital transformations”: moving paper-based systems to digital solutions, consolidating data warehouses, and moving from on-premise servers to the cloud. We encounter on-premise AML solutions at these institutions that are badly outdated, insecure against modern attack vectors, and very expensive to maintain (some solutions require multiple full-time employees just to keep them running!).
In contrast, Hummingbird is incredibly easy to get started with, requires no maintenance effort from our customers, and is adding useful functionality all the time. We keep our customers up-to-date with the latest regulations, money laundering typologies, and technical capabilities needed to conduct robust investigations.
Q: You’ve recently managed to raise $3M, could you tell us more about it?
A: Yes, we recently raised $3 million in a funding round led by Homebrew, with investments from Omidyar Network, TTV Capital, and Designer Fund. The round included investments from a great group of individuals with financial industry experience – people in roles at BNY Mellon, Plaid, Experian, Intuit, Square, and other great firms took part.
We’re very grateful to have the support of forward-thinking customers, investors, and mentors who share our belief that the people working to fight financial crime deserve modern technology.
Q: Where do you see Hummingbird in 3 years?
A: Our mission at Hummingbird is to fight financial crime. We’re starting by solving the most acute pain points that AML professionals have, and we’re doing so with a platform that scales and expands to accommodate financial innovations and changing regulatory requirements.
Anti-money laundering efforts today are largely ineffective. The United Nations estimates that $2 trillion is laundered every year and less than 1% is caught. While there are many contributing factors, we believe that three solvable problems within current AML efforts contribute disproportionately to the ineffectiveness.
First, money launderers exploit tactics across multiple financial institutions, but the data about these behaviors is in siloes – Institution A can’t easily see related activity data at Institution B. Current regulations provide support for collaboration between institutions, but these channels are difficult to manage and can be slow. We need more collaboration between financial institutions, and information sharing needs to be done in a way that is mindful of consumer privacy – specialized platforms like Hummingbird are needed for this.
Second, a lot of detail about suspicious behaviors is lost due to limitations of the communication channels between the financial industry and law enforcement. In the US, anti-money laundering practices involve reports that are filed with FinCEN – the Suspicious Activity Report (SAR) in particular. When a financial institution transfers information from their investigation tools to the SAR format, a lot of detail about the suspicious activity can be lost. As a result, law enforcement agents receive a less detailed view of the activity, making it harder to understand and pursue.
Third, existing solutions and workflows for AML case management force huge amounts of manual, repetitive data gathering and paperwork on the investigator. Instead of helping these highly-skilled professionals conduct investigations, outdated systems mostly get in the way.
Our long-term vision at Hummingbird is to address these issues and improve the effectiveness of anti-money laundering efforts. These are complex problems that require expertise and diverse viewpoints to address. We’re building those competencies into our team and working with industry partners that share our objectives. We want to give superpowers to financial crime fighters.