Merlon Intelligence Recognized for Driving AI Innovation, Stephen Epstein Joins as Chief Innovation Officer


Firm is recognized by CB Insights as one of the most promising Artificial Intelligence companies in the world and named to the prestigious AI 100 list for 2018

December 12, 2017 09:30 AM Eastern Standard Time

NEW YORK--(BUSINESS WIRE)--Merlon Intelligence, an AI company used by leading financial institutions around the world for customer risk assessment and the associated potential for financial crime, announced today that Stephen Epstein has joined as Chief Innovation Officer. Stephen will leverage his extensive industry experience to drive the company’s solution direction, roadmap and go to market strategy. Stephen previously ran product strategy for Mantas, a leading financial crimes and compliance solutions company, and product marketing for Digital Reasoning, a leader in AI enabled solutions.

In addition, Merlon Intelligence has been recognized by CB Insights as an AI leader and named to the AI 100 list for 2018. This recognition comes as Merlon Intelligence solutions are being used and deployed by some of the financial services industry’s largest financial institutions to help combat the growing challenge of customer onboarding, customer risk assessment and intelligent activity monitoring.

“Merlon Intelligence has used AI to deliver greater effectiveness and significantly improved efficiency for decades old problems in the areas of customer screening, monitoring, ongoing due diligence, and assessing customer risk at scale,” said Bradford Cross, CEO of Merlon Intelligence. “With Stephen joining, we can now leverage his experience to apply these innovations across the entire financial crimes and compliance ecosystem. We’re focused on transforming how financial crime and compliance is managed and the role AI will play in reducing compliance costs and risk. We’re also extremely excited that our innovations have been recognized by CB Insights and we’ve been named to their AI 100 list -- an especially noteworthy feat considering the relative lack of glamour in applying AI in the back office of financial institutions as compared to, say, autonomous vehicles or computational drug discovery. The team has been delivering exceptional solutions to our customers that leverage AI to dramatically cut false positives and risk within the compliance function, and I’m delighted to see them win this prestigious recognition as trailblazers in this important fight against financial crime.”

“It’s exciting to join the Merlon Intelligence team and I sincerely appreciate the trust they’ve put in me to drive our solutions and go to market strategy,” said Epstein. “With 25 years experience within the financial services industry, from my early days on the trading floor delivering solutions to leading investment banks, to building one of the industry’s most successful transaction monitoring and behavior detection platforms, I look forward to applying my experience and energy to the Merlon mission and help to transform how financial crimes and compliance is managed across the financial services industry.”

About Merlon Intelligence

Merlon Intelligence is a global compliance technology company supporting the financial services industry. Built by a world-class team of machine learning and compliance leaders, our mission is to deliver a full suite of AI-driven product offerings that support the needs of financial institutions in the area of financial crimes compliance. Using artificial intelligence and machine learning, our software transforms how customers are on-boarded, compliance risk is assessed and introduces intelligence into the screening and monitoring processes used by leading financial institutions around the world.

For more information on Merlon Intelligence, go to and follow on LinkedIn.

About CB Insights

Our team comes to work every day to build technology that helps corporations guess less and win more. We aggregate and analyze massive amounts of data and use machine learning, algorithms and data visualization to help corporations replace the three Gs (Google searches, gut instinct and guys with MBAs*) so they can answer massive strategic questions using probability not punditry.

With backing from the National Science Foundation and venture capital investors, we mine terabytes of data and knowledge contained in patents, venture capital financings, M&A transactions, hiring, startup and investor websites, news sentiment, social media chatter, and more. Our software algorithmically analyzes this data to help our clients see where the world is going tomorrow, today.  *We have MBAs.

Merlon Intelligence Brings Machine Learning to Regulatory Compliance for Financial Institutions

Seed Round Led by DCVC, Fenway Summer, Nyca, and Work-Bench

Konrad Alt joins Executive Team


SAN FRANCISCO, May 24, 2017 /PRNewswire/ -- Merlon Intelligence, an enterprise software company focused on risk management and compliance for financial services companies, today announced the availability of its anti-money laundering (AML) compliance platform and the close of its $7.65 million seed financing round led by DCVC with substantial participation from Fenway Summer, Nyca, and Work-Bench. This is the first financing round for Merlon Intelligence, which is bringing the benefits of machine learning and natural language processing to the regulatory compliance challenges facing the world's largest financial institutions. The company's executive team has expanded to include financial services veteran Konrad Alt, who serves as Chief Operating Officer.

Founder and CEO Bradford Cross is an AI entrepreneur and investor. He was previously CEO of Prismatic (acquired by LinkedIn) and chief scientist at Flightcaster, and is a founding partner of DCVC, a leading machine learning and big data venture capital fund. Cross said, "Operational risk is the biggest problem in banking – it's the Achilles heel of the whole global banking system.  The tools that are being used to manage risk are out of date, and don't take advantage of the technological progress in artificial intelligence and natural language processing that are driving other industries forward."

Noted financial regulatory expert Konrad Alt has joined Cross as Merlon Intelligence's chief operating officer. Alt was previously COO and Managing Director of Promontory Financial Group, where he spent over a decade advising financial services clients on challenges including compliance, enterprise risk management, governance, and regulatory communications. As a young lawyer, Alt was immersed in the U.S. savings and loan crisis, first as an attorney in private practice and later as counsel to the U.S. Senate Banking Committee. Recruited to join the U.S. Department of the Treasury, he served as the second-ranking official at the Office of the Comptroller of the Currency.

Alt explained, "We're building a modern compliance platform that can help control costs, strengthen risk management, and provide a great experience for the people who depend on it do their jobs. We can bring all the information users need together in one system, and use artificial intelligence to make sure important details never get lost.  When big financial institutions can meet their compliance obligations more effectively, at a lower cost, everybody benefits."

Merlon Intelligence's initial product offerings support the needs of major financial institutions in the area of anti-money laundering. The company is partnering with major financial institutions to build end-to-end AML compliance solutions using machine learning and real-time monitoring to streamline compliance processes by giving managers the tools they need to reduce compliances costs and strengthen risk management. The solution will employ user-friendly workflow to guide AML alert investigation and natural language processing to identify negative news in a variety of languages, translate the relevant information, and highlight it for analyst attention. Merlon Intelligence plans to bring the same technological sophistication and focus on user experience to upcoming development efforts in the areas of transaction monitoring, KYC onboarding, transaction analytics, case management and other important customer needs.

Raj Date, managing director & chair of the investment committee at Fenway Summer Ventures and the first ever deputy director of the Consumer Financial Protection Bureau, said, "There's a lot of room to make the world safer for commerce and if you can address that at big banks you can have a significant impact. We were excited by the unique combination of extraordinary machine learning knowledge and deep financial services domain expertise that we saw in Bradford and Konrad and the Merlon team. We like that they're betting more on the technology and less on the giant armies of people and we're confident financial institutions will do the same as they come to realize there are better options out there."

Hans Morris, managing partner at Nyca Partners, said, "You can make a strong argument that anti-money laundering compliance is the single biggest headache for banks around the world. And it is not going away, because the fact is that money laundering remains a real and growing issue for law enforcement and regulators everywhere. But the tools and basic framework for managing this risk hasn't fundamentally changed despite – literally – billions invested in monitoring an increasingly complex problem. But Merlon is by far the most sophisticated solution we have seen, one that can enable banks to have an immediate impact on their results and cost of monitoring transactions and on-boarding clients. And having a banking expert like Konrad Alt and an AI entrepreneur like Bradford Cross is a very rare combination."

Merlon Intelligence's board of advisors has deep financial services and regulatory expertise and includes:

  • Cantwell F. ("Chuck") Muckenfuss, former Deputy Comptroller of the Currency and partner (retired) at Gibson Dunn
  • Neal Wolin, former Deputy Treasury Secretary and COO at Hartford
  • Stuart Bell, consultant and former global sales manager/head of growth at Bloomberg
  • Mike Marcus, former Chief Risk Officer HSBC

About Merlon Intelligence

Built by a world class team of AI and compliance leaders, Merlon Intelligence launched in 2016 with a suite of initial product offerings supporting the needs of major financial institutions in the area of anti-money laundering (AML) compliance. Merlon Intelligence plans to bring the same technological sophistication and focus on user experience to upcoming development efforts in the areas of transaction monitoring, KYC onboarding, transaction analytics, case management and other important customer needs. 


TechCrunch: Merlon Intelligence raises $7.65 million in seed financing to combat money laundering





Posted May 23, 2017 by John Mannes (@JohnMannes)

Flightcaster, Prismatic and now Merlon Intelligence. Bradford Cross, partner at the venture capital firm Data Collective is a known figure in the ranks of VCs who have caught the entrepreneurship bug, abandoning what could have been a cushy lifestyle for one with considerably more volatility. His third startup, Merlon Intelligence, services banks, helping them cut down on risk and put a stop to money laundering. Merlon is announcing $7.65 million in seed financing led by none other than Data Collective.

The Merlon Intelligence platform flags and ranks risky transactions for banks. This requires both a top level prediction model and a robust data extraction and enhancement pipeline. Merlon crawls PDFs and other unstructured text to create a graph of financial and contextual knowledge.

A natural language processing system enriches this information and allows separate predictive models to make connections between events and people. That predictive model outputs a rank of suspicious activity that can then be analyzed by a human. Traditional banking analysts can provide feedback and improve the functioning of the entire system.

With a pedigree consisting of both finance and machine learning experience, Cross hopes to best legacy players like Oracle and Lexus Nexus that rely on outdated technology while getting the jump on newer entrants like Palantir that are bogged down by clunky consulting operations.

In an interview, Cross explained to me just how big of a problem money laundering is for banks. The smallest of compliance slip-ups can cost banks millions of dollars — fines across the industry are expected to surpass $20 billion this year.

Startups are really only as good as the money they save their customers. A simultaneously massive and rapidly increasing regulatory burden on banks is a surefire signal that financial institutions are willing to spend significant capital to abate burdensome fines.

Large banks employ thousands of screeners that spend their days combing through false positives flagged by existing tools. Even small improvements in transaction monitoring can save analysts time and make them more effective at managing risk.

With this as a driver, Cross was able to run a proof of concept test for a major bank within six months. That deal,  worth seven figures, took about a year to convert to contract.

“A big challenge as you’re starting to scale is getting your sales process moving things through repeatably,” Cross told me in a very VC tone. “We’re about to close our second bank and I would like us to do a bank a quarter.”

Rather than price gouge banks, Merlon is taking a page from Bloomberg and charging its customers on a per seat basis. The goal is that as Merlon adds new features, it will become useful to more employees at a bank, necessitating additional seats.

Cross told explained to me that the alternative of charging enterprises for individual features has generated resentment in the industry — customers don’t have much power and either have to pay up or swallow a painful switch to a new provider.

Merlon uses anonymized bank data to improve its functioning. Cross says this hasn’t been a concern for his initial customers because the startup never actually exports data. Ideally improved monitoring benefits every bank equally.

Moving forward, Cross says he will remain involved in the Data Collective network, helping out where he can. But with a growing startup under his wing, he will have to step back from the investing team to keep his creation on a healthy trajectory.

The team was intentional about soliciting investors that could add value in helping the startup lock down enterprise contracts with banks. In addition to Data Collective, Merlon Intelligence also counts Fenway Summer, Nyca, and Work-Bench as investors.