Regtech Solution Brief: Quantexa's Contextual Monitoring Solution

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1 October 2021

A New Paradigm in Transaction Monitoring Powered by Entity Resolution and Network Analysis


Regtech Solution Briefs are a new report series designed to provide Celent research clients with timely updates on regtech solutions and strategies by highlighting vendor briefings we found particularly interesting.

Quantexa, a regtech startup, has developed a new solution, called Contextual Monitoring, for alert generation in transaction monitoring that marks a paradigm shift in how transaction monitoring is conducted. The company’s main proposition is the Quantexa platform, which is underpinned by its Entity Resolution and Network Analysis capabilities. Quantexa has proved its mettle in the first use case it developed for complex case investigation in financial crime compliance, especially in KYC and AML. Quantexa has now leveraged the same principles and frameworks of entity resolution and network analysis and applied them for alert generation in transaction monitoring.

A key feature of Quantexa’s approach in transaction monitoring is its focus on analyzing relationships, which is a radical departure from the conventional approach of analyzing only transaction values and volumes. The Quantexa approach is thus designed to find suspicious activities in networks of entities (individuals, counterparties, corporates, watchlists, corporate registries, and others) rather than just transactional data.

This can be a powerful approach in transaction monitoring because it uses more data to construct a fuller view of the customer and its connections, and drives contextual analysis by focusing on relationships. Quantexa reports promising results based on early implementation and pilots conducted at some of the largest banks in their capital markets, trade finance, and correspondent banking business lines. Quantexa has recently initiated a few pilots for developing a retail banking use case and plans to fully develop the solution in 2022; gaining market share in this segment will be a challenge because it has a crowded and competitive vendor universe and also is an area where financial institutions have been reluctant to undertake major innovative efforts due to technological complexities and regulatory considerations.