Yahoo Finance Moody's (MCO) to Enhance KYC Capabilities With 2 More Buyouts
After acquiring Bogard AB last month, Moody’s MCO has announced two more deals that will further strengthen its Know Your Customer (KYC) capabilities. The company has acquired PassFort Limited and inked a deal to buy 360kompany AG.
These two firms are providers of onboarding and KYC technology solutions. The buyouts are expected to further support Moody’s technology, data and analytical capabilities. Also, these are likely to augment the company’s “industry-leading customer solutions for KYC, anti-money laundering, compliance, and counterparty risk” and are part of an effort to fortify Moody’s Analytics (“MA”) division’s profitability.
Keith Berry, General Manager of Moody’s KYC business, said, “PassFort and kompany are innovators in the compliance and regulatory space, and their technologies will upgrade and accelerate our customers’ onboarding and monitoring processes.”
Details
The U.K.-based PassFort is a SaaS-based workflow platform for identity verification, customer onboarding and risk analysis. The platform, deriving data from 25 third-party providers, systematizes the collection, verification, and secures the storage of customer and supplier due diligence documentation.
The firm’s integration into Moody’s suite of KYC and compliance product offerings is expected to lead to the creation of a complete workflow solution, which will allow customers to combine Moody’s data “including credit, cyber, ESG, and climate analytics directly into their proprietary processes.”
360kompany is a Vienna, Austria-headquartered platform for audit-proof business verification and KYC. The firm operates a network of primary source information on more than 115 million companies across 200 jurisdictions. The platform will help Moody’s clients to do comprehensive shareholder analysis and entity verification in real-time. Further, it will help retrieve original company filings and documents to meet their regulatory demands.
Subject to regulatory approval, the acquisition of 360kompany will be completed in the first quarter of 2022. Unlike funding PassFort deal with cash, the buyout of 360kompany will be funded through a combination of cash and shares of Moody’s stock. These deals will have no material impact on Moody’s 2021 results.
Further, following their integration into MA division’s KYC business, both will expand “the Orbis company database and the GRID database of risk profiles, adverse news, politically exposed persons, and sanctions.”
Conclusion
Over the past five years, Moody’s has been enhancing its investments in compliance and KYC space. This includes the acquisitions of Bureau van Dijk (2017), RDC (2020), Acquire Media (2020) and Bogard (2021).
Now, through the latest two deals, Moody’s will be able to address more compliance-related challenges. Also, the deals take the company a step closer to perpetual KYC (pKYC). While the company’s existing solutions track entity risk information and emerging risks, a more all-inclusive approach is needed to deliver pKYC on a real-time basis. These are expected to be generated through the integration of PassFort and 360kompany with the MA division.
Also, such transactions are expected to keep helping the company diversify its revenues and be accretive to earnings. Moody's will continue to pursue opportunistic deals that are strategic fits and complement its existing operations.
Shares of Moody’s have gained 32.5% so far this year, outperforming 14.2% rally of the industry.
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Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Growth Efforts by Other Finance Firms
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Citizens Financial Group, Inc. CFG last month concluded its previously announced merger with JMP Group LLC. CFG had announced the all-cash deal in September in a bid to augment its capital market capabilities.
The buyout is expected to foster growth, diversify Citizens Financial's capital market platform and provide greater scale in key verticals like healthcare, technology, financials and real estate.
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