Wells Fargo leads $19.3m spending round in US reg tech start-up AscentAuthor: Roger BairdLast Updated: November 8, 2019 Wells Fargo and ING have led a $19.3m spending round into US reg tech start-up Ascent.The Chicago-based platform uses artificial intelligence to help banks manage their compliance produces, which were shown to have been overriden by criminal gangs and rouge states in the aftermath of the financial crisis. This led to lenders paying out billions in fines to regulators.Ascent said its Series B funding round was also backed by US venture capital firm Drive Capital and the University of Chicago. Its clients include Australia’s Commonwealth Bank as well as America’s Wells Fargo and Dutch ING.The start-up, founded four years ago, said it will use the cash to boost staff numbers, upgrade products and improve brand awareness. ‘Lax compliance practices’The platform said its founder Brian Clark, as a former capital markets regulator, “witnessed first-hand how under-regulation spurred risk-taking and lax compliance practices that helped inflate the bubble, leading to the 2008 global financial meltdown”.Following the crisis, banks hired thousands of compliance staff to keep up with tougher global regulation.Ascent says its automated uses artificial intelligence processes “dramatically reduces the mundane and error-prone manual efforts of regulatory research and analysis that permeate the industry today”.Ascent chief executive Clark said: “Keeping up with regulation is mission-critical for businesses. While digital transformation of the enterprise is happening everywhere, compliance has been largely left behind, which is unthinkable considering the risk involved in compliance work.” Billions in finesBenoit Legrand, chief executive of ING Ventures and chief innovation officer of the global bank, added: “As the regulatory environment becomes increasingly demanding, so is the pressure on firms to remain compliant. In order to keep up with this ever-changing landscape and help relieve the mounting strain on resources, the financial services sector is continuously looking for more automated, intelligent and cost-effective ways to manage compliance.”Several global banks have paid hefty fines to regulators for compliance failures in recent years.In April, British-based bank Standard Chartered agreed to pay $1.1bn to US and British authorities for conducting illegal financial transactions that violated sanctions against Iran as well as with Syrian, Sudanese, Burmese and entities.Back in 2012, another UK-based lender, HSBC, agreed to pay a record $1.9bn in fines to US authorities for allowing itself to be used to launder drug money flowing out of Mexico and other banking lapses.