The education of more than 50,000 workers in Australia's financial services sector will be powered by home-grown artificial intelligence technology after global education provider Kaplan acquired Sydney-based regtech start-up Red Marker.
A giant in the global professional education industry, the Florida-headquartered Kaplan, which has annual revenue of around $US2 billion ($2.6 billion), plans to roll out Red Marker's Artemis system to more than 1 million students in 30 countries around the world, including many major banks. The deal means Australian artificial intelligence technology will be playing a major role in efforts to improve bank culture globally.
The financial terms of the deal, which will see Red Marker become a wholly owned subsidiary of Kaplan, have not been disclosed.
Red Marker will continue to be based in Sydney and is looking to expand its workforce from 10 staff to 30 in the coming years, supporting a nascent tech industry niche emerging around regulatory technology (known as "regtech").
Red Marker was founded by Matt Symons, co-founder of peer-to-peer lender SocietyOne, his wife Mandy Symons, and Julian Broudou, a software developer. All will be staying with the company under Kaplan; so will all the engineering staff.
The acquisition points to a looming transformation of professional education delivery, as content shifts from static syllabuses to dynamic programs which deliver learning material based on real-time monitoring of staff performance.
Red Marker, which has been called out in some recent fintech speeches by Treasurer Scott Morrison, has been pioneering the application of machine learning and artificial intelligence to the world of regulatory compliance. Its Artemis system is already being used in Westpac Banking Corp and another of the big four banks, who are looking for ways to more proactively identify risk.
A game changer
While in many banks around the world compliance remains a random audit function that includes website inspections or file reviews, applying a natural language processing algorithm to the task allows every piece of communication to be filtered digitally and reviewed. The computer can then serve up an education module to allow the banker or adviser to make corrections then and there on their real work.
Kaplan and Red Marker have already been working together for three years, after Kaplan's local team, Australian and New Zealand managing director Rob Regan and CEO of Kaplan Professional Brian Knight, signed on as a "development partner".
Mr Knight said AI "will revolutionise education" and described the deal "a game changer, as it goes beyond AI and machine learning and combined micro-training to enable advisers to remediate problems as they arise in real time, ultimately leading to a true culture of compliance".
Mr Symons said the Artemis AI engine will be more effective by being fed with a broad range of data sets.
"Regtech and edutech are big opportunities for Australia. We are excited to be able to accelerate our pioneering work at the intersection of these two emerging sectors," said Mr Symons.
The deal may frustrate some local venture capital investors, who are understood to have been keen to invest in Red Marker in recent months.
The sale of Red Marker to Kaplan is the latest deal by Mr Symons, who sold Memetrics to Accenture in 2008, where he worked before co-founding SocietyOne, the leading peer-to-peer lender in the Australian market now backed by some of the nation's most astute investors.
Global regulators are excited about the prospect of regtech because it can enhance their ability to proactively monitor the market. For example, Artemis could tell regulators where they need to provide additional guidance because the technology can monitor live patterns in industry to identify where workers are struggling to understand legal concepts and need more assistance on how to interpret legislation.
