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Daniel Secretan, Xapien: “don’t settle for search results, you need research”


When a single mistake can cause lasting damage to a business's reputation, and prospects, businesses need to stay vigilant and choose their customers or partners carefully.

In an online world, conscientious consumers have the power – and motivation – to hold businesses accountable for every aspect of their values, ethics and conduct. With the broad and rapid spread of information, this is often dependent not just on the conduct of the business itself, but on the company it keeps.

To discuss the necessity of rapid, deep and accurate due diligence in today’s climate, we sat down with Daniel Secretan, Co-Founder and COO of Xapien – a company providing automated background research reports on organizations and individuals.

How did Xapien come about? What has the journey been like so far?

Xapien was born out of a vision to empower organizations with the knowledge that they need to make informed decisions about who they do business with. The information is out there thanks to the explosion of online data and increasing transparency requirements. The challenge is mobilizing it in a meaningful way for your business.

My background is in financial crime where “Knowing Your Customer” is a regulatory requirement. But meeting the requirements felt like a tick-box exercise that never really resulted in “knowing” or understanding the customer in question.

Shaun’s background is in developing technology to gather and analyze open-source information for UK national security agencies. He was interested in how knowledge can be extracted from the fragmented online space.

The journey has been amazing. What I’ve enjoyed the most is seeing the world of due diligence move from a pure compliance question “can we legally do business” to a more value and reputational one, “should we” do business. This question is now widespread across regulated and unregulated industries.

Universities and charities are ahead of the game here. In an industry built on trust and ethics, upholding a strong reputation for values-led decision-making is critical. Too often a charity’s reputation is not defined by the good work that they do, but by the company that they keep. Traditional due diligence solutions (PEPs & Sanctions and Watchlist look-ups) are insufficient for this industry. They need a comprehensive picture of their prospect. We are seeing banks, big corporates, and others all going the same way.

Can you introduce us to what you do? What technology do you use to analyze vast amounts of data?

We provide automated background research reports on any organization or person based on information from the entire indexed internet. This hasn’t been done before.

Traditional “research” tools are blind to text or “unstructured data”. But Gartner estimate that >80% of data on the internet is unstructured – this means not in a table or database form, but in text, speech and video. We use natural language processing to read the web, media, blogs, etc., and extract information from it. We’ve taught it to read, understand and analyze just like a human would, only at incredible speed and scale.

We also use cutting-edge graph technologies to model all our information. This means that we can reach a deep level of accuracy and certainty. Take two “Chris Smiths” for example. One was a defendant in a criminal trial. The other Chris Smith was running a software trial. We are able to distinguish not just between the two Chris Smiths but also that one is involved in something potentially risky, and the other is not.

All of our technology is entirely cloud-based, keeping it secure and easily integrated into any existing IT system.

In your opinion, what industries and organizations should be especially concerned about reputation management?

The short answer is all industries. In a digital world, the public profile is everything and if you get something wrong, it can be a permanent black mark on your digital footprint – the shop window for any institution.

Consumers are now armed with huge reams of data about your organization and who you choose to engage with. It’s a race to stay ahead and make sure you don’t get caught out by making business decisions that don’t align with your values.

And whilst you can protect and uphold your own standards, what about the people you do business with?

You need to know more about them than anyone else who might go looking. You need to have an answer to any regulator, investor, customer, journalist, or boss who asks “didn’t you Google them before signing the deal?”

How did the recent global events affect your field of work? Did you notice any new flaws or gaps in your industry?

Russia’s invasion of Ukraine threw sanctions and globalized risk exposure into stark relief. Organizations had to scramble to comply with the largest ever package of sanctions. Failure to comply meant severe legal and financial penalties. Governments were also scrambling to uncover bad actors and implement meaningful sanctions.

For both the government and corporates, existing tools which consolidate databases of sanctions lists were insufficient. What about the people who need to be sanctioned or are about to be sanctioned? This work would fall to manual desktop research which could take months to conduct on any kind of scale. We were quick to integrate sanctions data into our tool. But we wanted to go further and provide a textured understanding of the research subject which would enable our users to see if someone was likely to be sanctioned – due to a known association with Putin’s allies for example.

The pandemic was also significant. The move to virtual meetings means that trust has to be established in a different way. Background due diligence is more important than ever whether to protect against risks or find opportunities. Existing ways of doing this were insufficient. Google biases results based on previous searches, for example, preventing you from getting a full and fair picture. But running a deep investigation on everyone you meet is impractical. You don’t have to settle for a cursory glance on a search engine to get an understanding of the person behind your next zoom call. We provide full, contextual research reports on any subject, in minutes.

Besides having a clear view of the risk landscape, what other measures do you think can enhance business operations?

A standardized due diligence process. Standardizing due diligence processes is a matter of both efficiency and certainty. It puts a system on an otherwise freeform process that is dependent on different analysts and their respective research training, tenacity, and capacity. Utilizing a singular platform helps businesses and organizations develop long-lasting protocols and standards for their due diligence.

Using a system that maintains a clear and consistent audit trail is also essential. Beyond compliance with regulations, businesses need to be able to refer back to the documents on which major decisions were made in order to continually better their strategies.

What threats can a company be exposed to if it fails to conduct appropriate background checks on its business partners or new employees?

Regulatory scrutiny can extend from a slap on the wrist and increased monitoring to business-ending fines, imprisonment, and the removal of licenses. But the reputational risks can be more significant. Consumers and investors can all lose confidence in a company leading to crippling losses after the release of one bad news story. With the rise of social media, everyone can be judged by the court of public opinion in an afternoon on Twitter.

On the other hand, many due diligence processes end up being a bottleneck and just a tick-box exercise. This can lead to missing out on business opportunities and a poor onboarding experience. Businesses need a quick, accurate and comprehensive tool that can help them onboard the right customers faster.

Talking about cybersecurity, what measures do you think are necessary for every modern business?

If I had to pick one thing, I would say effective staff training. The weakest link is usually through someone who hasn’t been taught about the risks of phishing or CEO fraud or password management.

Another risk is the number of usernames & passwords that get used and passed around the company. Invest in a good password management system so you can have unique, secure passwords for all accounts. This means that if one gets hacked, you just change that password – not everything.

Can you share some tips for businesses looking to improve their reputation and online presence?

The main thing is not to get caught out in the first place. Having the right due diligence measures in place can help you to maintain a strong reputation as a discerning, values-led organization.

Transparency also plays a role in this. Be open and communicate your decisions, and have strong evidence to back them up.

Share with us, what’s next for Xapien?

Working in even more languages. We currently auto-translate 108 different languages and scripts into English and run our NLP profiles over them to extract insights. But we want to do them all!

Even better ESG reporting. We’ve worked with experts in fields across environmental, social, and governance risks and standards to teach our machine learning and NLP technology to recognize, understand and categorize any manner of ESG risks. But this is a continually evolving space. We want to empower our customers with an unprecedented level of nuanced understanding of their ESG risk exposure.

Perpetual KYC – the holy grail of a bank’s compliance dept.



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