Digital bank Grasshopper has turned to fintech Cable to automate financial crime assurance and testing.  

The collaboration allows $700 million Grasshopper to use Cable’s automated platform to improve “visibility and comprehensive compliance insights” to comply with the Bank Secrecy Act, Grasshopper Chief Compliance Officer Chris Mastrangelo told Bank Automation News.

“This [partnership] just expedited the efficiency, and we’re always looking for technology to gain efficiency wherever possible,” Mastrangelo said. Grasshopper can also provide Cable’s anti-money laundering (AML) services to its fintech clients through its BaaS offering, according to a July 25 Grasshopper release. 

“As a banking-as-a-service provider, we have a lot of different fintech providers, so this [partnership with Cable] was a big need,” Mastrangelo said. Mastrangelo met Natasha Vernier, Cable’s CEO in Las Vegas last October and found that the two companies work with Treasury Prime, Mastrangelo said. 

“Her product and business model kind of spoke to me right away,” making Mastrangelo realize that the partnership can solve major pain-points in the Grasshopper’s operations. 

Cable, which uses machine learning (ML) to flag suspicious transactions, will provide insights to the bank on how it’s “doing against their regulatory requirements,” Vernier, told BAN. 

Cable’s tech model has scalability built into it “from Day One” and the fintech is also looking to add features, like transactional assurance and credit assurance, later this year, Vernier said.  

Founded in 2020, the company provides services in the United States, United Kingdom and Europe and plans to expand to India to accommodate a client looking to expand in the region, Vernier said. Treasury Prime, Axiom Bank and Quaint Oak Bank are some of Cable’s customers. 

The transaction assurance feature will help banks like Grasshopper better screen transactions for AML compliance, while the credit assurance feature will help banks manage their credit control systems, Vernier said. 

Need for AML compliance 

Financial institutions are looking to AML service providers rather than build their own solutions to avoid regulatory backlash and associated fines and continue operations without hiccups, AI-driven AML service provider Napier Chief Executive Greg Watson told BAN. 

“In the older days, [legacy institutions] would potentially seek to build some of the solutions,” he said. “But because of the speed of regulatory change and the increasing breadth of regulatory change, it is hard for organizations to keep up with that by themselves.” 

However, FIs that partner with AML service providers can reduce their time to market and comply with regulatory guidance more quickly, Watson said. 

An automation journey 

Grasshopper has been automating its operations to drive efficiency and deliver products to consumers that can simplify their businesses, Mastrangelo said.  

Last month, Grasshopper integrated digital-business-solutions provider Numerated into the bank’s platform to automate document processing and streamline underwriting.

As the company grows it will look toward automation through partnerships similar to the one with Cable to drive efficient operations, Mastrangelo said.