Financial crime compliance platform Hummingbird has acquired AML risk detection company Quantimon to expand the breadth of its transaction oversight and become a one-stop shop for fintechs.
The deal, terms of which weren’t disclosed, looks to solve the problem of false-positive noise in anti-money laundering compliance. Hummingbird will integrate its AI and human transaction monitoring outcomes with Quantimon’s algorithms to improve future detection. Using a federated learning network, patterns can be identified across companies without sharing customer data. Quantimon says its tools have generated a 67% reduction in false positives.
“When you're doing anti-money laundering surveillance or counter financing and terrorism surveillance, you want to cast a broad net,” Joe Robinson, Hummingbird’s CEO, told Financial News Network. “But at the end of the day, it can be operationally quite challenging, and there are better, more predictive algorithms available through machine learning.”
Hummingbird CEO Joe Robinson
Hummingbird, which counts DraftKings, Crypto.com and Etsy as customers, had been partnering with Quantimon for about a year before the acquisition, Robinson said. Hummingbird will integrate the Quantimon team, while CEO Ben Duranske, who previously worked at Apple, Xoom and PayPal, will stay on as an advisor during the transition period.
Hummingbird’s only other acquisition was 2024’s deal for data-integration platform LogicLoop. At the time, the company said the deal marked “a significant step forward in Hummingbird’s mission to become the core operating platform for financial crime fighters, empowering financial institutions to unify, explore, and act on their risk and compliance data.”
While some observers have expressed concerns about integrating AI into fraud and compliance, Robinson said that if humans are in the loop, the combination shows promising results.
“We see a ton of potential for AI and risk and compliance used smartly, right? Used with human oversights, used in ways that protect our rights as consumers of the financial industry, ways that preserve our privacy,” Robinson said. “But of course, the capabilities of AI are fantastic and will lend themselves really well to fighting financial crime.”
Robinson told FNN Hummingbird is always open to exploring other purchases in the risk and compliance space.
“One of the things I just love about this industry is, it's like the deepest ocean in the world of different things you can do,” Robinson said. “We're always looking to build, partner, or buy the technologies that we feel make the most sense for our customers and for the market.”
