Kord secures £6.4m to combat AI-driven fraud and process payments in regulated industries

UK fintech Kord has successfully secured £6.4 million in Series A funding to enhance its platform designed to combat AI-driven fraud and streamline payment processing within highly regulated industries. The platform offers a unified infrastructure for identity verification, Anti-Money Laundering (AML) compliance, document signing, and digital payments, targeting sectors such as legal, conveyancing, property, and financial services. This investment addresses the escalating threat of sophisticated AI-enabled fraud, including deepfakes and synthetic identities, which pose significant risks and contribute to administrative delays in high-value transactions. Kord's solution aims to replace fragmented legacy systems, thereby improving efficiency, reducing economic losses from failed transactions, and bolstering regulatory compliance for firms operating in these critical sectors.

The landscape of financial transactions in regulated industries is undergoing a profound transformation, driven by both technological advancements and the escalating sophistication of cyber threats. In a significant development, UK fintech Kord recently announced securing £6.4 million in Series A funding. This substantial investment is earmarked for scaling its innovative platform, which is specifically engineered to combat the rising tide of AI-driven fraud and to streamline payment processing for sectors such as legal firms, conveyancers, estate agents, and financial services companies.

The funding highlights a growing recognition of the urgent need for robust, integrated solutions to address the dual challenges of complex regulatory compliance and increasingly intelligent fraudulent activities. Traditional, fragmented systems are proving inadequate against modern threats like deepfakes and synthetic identities, which AI tools can generate at speed and scale. Kord's integrated approach seeks to provide a comprehensive answer, unifying critical processes from client onboarding to secure payment execution.

This article will delve into the regulatory and fraud landscape necessitating such innovations, analyse Kord's proposed solution within this context, and explore the implications for legal and financial practitioners in the UK. The central thesis is that integrated RegTech platforms like Kord are becoming indispensable for firms navigating the complexities of high-value transactions, ensuring both security and compliance in an era defined by advanced digital threats.

The emergence of Artificial Intelligence has dramatically reshaped the fraud landscape, enabling criminals to perpetrate scams with unprecedented speed, scale, and sophistication. AI-driven fraud now includes the creation of highly convincing deepfakes, synthetic identities, and forged documents such as utility bills and payslips, making it increasingly difficult for traditional verification methods to detect illicit activities. This surge in AI-enabled financial crime poses a significant threat across various regulated industries in the UK, particularly in high-value transaction environments like property sales and legal settlements.

In the UK, regulated sectors operate under a stringent framework designed to prevent financial crime and protect consumers. Key legislation includes the Payment Services Regulations 2017 (PSR 2017), which governs payment services, mandates Strong Customer Authentication (SCA), and outlines provisions for fraud prevention and safeguarding customer funds. Recent amendments to the PSR 2017 and guidance from the Financial Conduct Authority (FCA) have introduced mechanisms, such as a four-day payment delay rule, to combat Authorised Push Payment (APP) fraud, where victims are tricked into authorising payments to fraudsters. Complementing this are the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), which impose obligations on firms, including legal professionals, to conduct risk assessments, customer due diligence (CDD), enhanced due diligence (EDD), and report suspicious activities.

For law firms specifically, the Solicitors Regulation Authority (SRA) Accounts Rules are paramount. Rule 3.3, for instance, strictly prohibits the use of client accounts as banking facilities, requiring payments into and out of client accounts to be in respect of regulated services. Breaches of these rules, often stemming from inadequate controls or a misunderstanding of client money principles, can lead to serious regulatory action. The FCA, as the primary regulator for payment and e-money firms, maintains ongoing oversight, setting conduct standards and recently publishing a landmark review on the impact of AI on retail financial services, which underscored the amplification of fraud and cyber risks. This complex regulatory environment, coupled with the evolving threat landscape, necessitates innovative solutions that can seamlessly integrate compliance and robust fraud prevention.

Kord's strategy directly addresses the challenges posed by both regulatory complexity and AI-driven fraud through its integrated platform. By unifying identity verification, AML compliance, document signing, and payment processing into a single, FCA-regulated system, Kord aims to replace the "patchwork" of disparate legacy tools that many firms currently rely upon. This consolidation is critical, as fragmented systems often create vulnerabilities that sophisticated AI-generated deepfakes and synthetic identities can exploit.

The platform's AI-driven fraud detection capabilities are designed to verify client documents against a broader array of data sources, making it significantly more difficult for fraudulent identities to bypass security checks. This is a crucial advancement, given that AI tools can now generate highly convincing fake documents and deepfake voices/videos, which have been shown to bypass standard verification processes in some instances. By providing secure digital wallets and dedicated bank accounts for client money, Kord also offers a mechanism to help law firms and other regulated entities comply with stringent safeguarding requirements, such as SRA Accounts Rule 3.3, which prohibits using client accounts as banking facilities.

Despite the clear benefits of such integrated solutions, a significant gap persists in the adoption of advanced anti-fraud tools across UK finance and property businesses. Research indicates that more than half of identity verification checks are still conducted manually, even as firms express high awareness of the growing threat from AI in financial crime. This reliance on manual processes creates a disparity between the sophistication of fraud risks and the effectiveness of detection systems, leaving many firms exposed. Kord's API-driven and easy-to-integrate modular tech stack seeks to bridge this gap, accelerating client onboarding and reducing administrative delays that annually cost the UK housing market hundreds of millions in failed transactions.

Furthermore, the legal implications of AI-driven fraud extend to corporate liability. The Economic Crime and Corporate Transparency Act 2023 introduced a 'Failure to Prevent Fraud' offence, holding large organisations criminally liable if they fail to prevent employees or associated persons from committing fraud for the organisation's benefit. While AI systems cannot possess dishonest intent, organisations deploying them could face scrutiny for not having "reasonable procedures" in place to prevent AI-facilitated fraud. This underscores the necessity for robust, AI-powered fraud prevention systems. Concurrently, the UK Jurisdiction Taskforce has suggested that lawyers could be deemed negligent for *failing* to utilise AI where it would constitute reasonable care and skill, although it also cautions against AI "hallucinations" and stresses the paramount importance of human oversight and verification of AI outputs.

Kord's successful £6.4 million funding round signifies a critical step forward in the battle against AI-driven fraud and operational inefficiencies within the UK's regulated industries. Its integrated platform, by unifying identity verification, AML compliance, and payment processing, offers a compelling solution to the complex challenges faced by legal firms, conveyancers, property professionals, and financial services companies. The ability to counter sophisticated threats like deepfakes and synthetic identities, while simultaneously streamlining compliance and reducing administrative friction, positions such RegTech innovations as essential tools for modern practice.

For practitioners, the implications are clear: a proactive approach to adopting advanced, integrated fraud prevention and compliance technologies is no longer merely advantageous but increasingly a professional imperative. Firms must move beyond outdated manual checks to keep pace with the evolving threat landscape and to meet their stringent regulatory obligations under frameworks like the PSR 2017, MLR 2017, and SRA Accounts Rules. Furthermore, the evolving discourse around corporate liability for AI-driven fraud and the potential for negligence claims arising from a failure to utilise AI effectively underscore the need for continuous vigilance, strategic investment in technology, and ongoing staff training. Legal and financial professionals should closely monitor further regulatory guidance on AI adoption and liability, as well as the broader market's embrace of integrated RegTech solutions, to ensure they remain secure, compliant, and competitive in this rapidly changing environment.