Can This Bengaluru Startup Crack India’s Compliance Conundrum With AI?

For decades, the financial industry has relied on teams of consultants, lawyers, auditors, and internal compliance officers as the backbone of regulatory assurance. From interpreting complex rules to assessing internal controls, this human-centric model has long provided the “peace of mind” that institutions, whether banks, insurers, asset managers, or fintechs, are audit-ready. But this approach has remained heavily manual and consultant-led. It is not only expensive and time-consuming, but also offers compliance that is valid only at a single point in time, leaving businesses vulnerable to regulatory scrutiny. 

Meanwhile, the regulatory landscape has grown more complex and dynamic. Authorities such as the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Insurance Regulatory and Development Authority of India (IRDAI) are continuously updating their frameworks to address emerging risks, ensure consumer protection, uphold data privacy, and maintain systemic stability.

This widening gap between growing regulatory complexity and outdated compliance methods has created a massive opportunity for regulatory rechnology aka regtech. Regtech startups are leveraging advanced technologies like artificial intelligence (AI), natural language processing (NLP), blockchain, and real-time data analytics to bring automation, accuracy, and continuous monitoring into the compliance process. 

In India, the transition to regulatory tech is also not without hurdles such as data privacy concerns, integration with legacy systems and the need for continuous updates to match evolving regulations.

“The biggest challenge I have consistently seen in compliance is that financial institutions don’t just buy software — they buy peace of mind. And for that, they have always turned to consultants. Software alone has never been able to fully interpret regulation, so businesses still needed humans to bridge the gap. They trust the people more than the tools,”  Ritesh Singhania, cofounder of Zango AI, told Inc42.

That’s where players like Zango AI come in. 

With Zango, the founders are offering a hybrid ‘software+services’ model that delivers not just automation, but ongoing trust, continuous monitoring, real-time compliance, and the assurance that your business is audit-ready at all times.

Founded in September 2024 by seasoned entrepreneurs and long-time friends Singhania and Shashank Agarwal, Zango AI is a regulatory tech startup that helps financial institutions automate, manage, and stay ahead of complex regulatory requirements through a combination of AI and expert oversight.

Headquartered in London, Zango is built on a cloud-first architecture. Its revenue model includes subscription pricing based on the number of modules and jurisdictions, along with usage-based pricing for AI agents determined by the volume of regulatory scans, campaign reviews, or product launches. Typical deal sizes range from $70,000 to $180,000 annually, with smaller clients in the high five-figure range and larger financial institutions paying six figures, according to  Singhania.

Zango’s Core Thesis

Both founders of Zango AI come from deep, first-hand experience with the pain points of compliance in financial services, but from different countries. Singhania spent nearly a decade building compliance products for asset managers, pension funds, and financial institutions in the UK, while Agarwal has built AI-powered risk and fraud detection platforms at scale for some of the leading fintech players in India.

Despite their different backgrounds, they kept encountering the same core problem, that in this space, businesses don’t just want tools, they want trust. And that trust has traditionally come from consultants, not software.

“My previous venture, ClearGlass, focussed on regulatory transparency for asset managers and was even backed by a global insurer. Yet, even in that setup, clients continued to rely heavily on consultants to implement the tools, because software could not alone accurately interpret complex regulations and provide the level of assurance financial institutions need to feel confident during audits or regulatory reviews,” said Singhania.

Agarwal felt the same. After founding Thirdwatch, a fraud detection startup that was acquired by Razorpay in August 2019, he went on to serve as director of product management at PhonePe, where he oversaw ML (machine learning) platforms and enterprise risk and faced a similar challenge as implementing a compliance tool still required consultants and nearly a year of work.

These shared pain points became the core thesis behind Zango – rethinking how trust in compliance is delivered, not just through people, but through scalable, intelligent technology.

Launching the startup wasn’t an issue, as both cofounders came in with deep domain expertise. However, the biggest challenge wasn’t building the product, it was building trust. To solve the credibility gap, they began working with some of the biggest global names.

“We started with the EU as our home ground, as it’s one of the toughest regulatory environments in terms of data. Proving ourselves there helped validate the product and laid the foundation for global expansion,” the cofounder added.

Since its launch in 2024, Zango AI has expanded from the UK to the US and, most recently, established its subsidiary in India. It works with five enterprise clients, including global names like Juni, Monzo, and Novobanco. It hasn’t onboarded Indian clients yet, it is actively targeting major players like PhonePe and Razorpay as potential partners in the near future.

How Zango Is Solving Compliance With AI

To help financial institutions stay compliant in a fast-changing regulatory environment, Zango takes an AI-native approach by blending legal intelligence with modern machine learning to move from point-in-time audits to continuous, real-time assurance. The B2B startup works directly with banks, fintechs, insurers and other regulated businesses to help them remain compliant and audit-ready at all times. The platform makes it easier for institutions to interpret and implement complex financial regulations, especially when launching new products, features or campaigns. It also helps the companies beyond market risk disclaimers to plan out campaigns in compliance with financial promotion rules, fair lending regulations, advertising standards, customer suitability checks, and mandatory disclosures.

Instead of relying on manual monitoring or scattered consultant reviews, Zango automates the end-to-end compliance stack using purpose-built AI agents.

Zango fine-tunes existing large language models (LLMs), particularly Google Gemini, chosen for its extended context window. “Regulatory documents are long and complex, and Gemini allows Zango to process entire policy files without chunking, reducing hallucinations and preserving legal accuracy,” the founder said. 

But AI alone isn’t enough. Zango pairs its models with legal expertise. Instead of product managers, it works with lawyers who act as domain-specific AI trainers, ensuring that the AI can interpret regulation across different legal frameworks, including the UK’s common law, Europe’s civil law, and hybrid systems in the US and India. This legal nuance forms the core of Zango’s IP.

Zango offers five core compliance modules:

• Horizon Scanning: 24/7 regulatory monitoring tailored to each client’s geography, licence, and products. It filters out 80% of irrelevant regulatory noise, providing real-time alerts on updates that matter based on geography, product, and licence.
• Obligation Mapping: It identifies gaps between existing internal controls and new regulatory obligations, reducing review cycles from one to three weeks to under two days.
• Policy Management: Streamlines internal policy updates and version control, complete with a full audit trail. 
• Controls Mapping: Matches internal business controls to regulatory obligations.
• Risk Acceptance Tracking: Flags compliance gaps and tracks risk decisions at the business level.

On top of this, Zango helps teams across marketing, product and operations stay compliant by using AI agents that run real-time checks. It reviews marketing content to catch misleading claims, supports product teams with region-specific compliance guidance during launches, continuously monitors operations to flag regulatory gaps, and automates evidence collection to keep businesses audit-ready at all times.

Is India The Right Market?

India’s financial sector is undergoing rapid digitalisation and consequent regulatory tightening. For instance, the finance ministry recently communicated revised guidelines for the Central Know Your Customer (CKYC) to all financial sector regulators. New guidelines have also mandated regulatory impact analysis and public consultation before changes are implemented, a step towards more transparent and accountable rule-making.

India’s financial ecosystem is at the intersection of rapid digitalisation and intensifying regulation. However, some of the biggest challenges for a brand like Zango include price sensitivity and enterprise go-to-market (GTM) hurdles.

According to Zango’s founder, many Indian companies still prefer hiring compliance personnel over investing in software, making the business case for automation tools harder than in Western markets. There’s also a mindset challenge that firms often view compliance as a checkbox exercise or a fine to be paid, rather than a preventive strategy, which reduces the urgency to adopt regulatory tech proactively.

“Another key challenge is GTM execution. While India is known for its world-class product talent, enterprise sales in sectors like banking and insurance demand deep relationships and timing. You can build a world-class product in India, but cracking GTM here, especially for banks, is the real moat,” the founder added. That’s why Zango’s playbook is to first prove itself in Europe, where regulation is stricter and budgets are larger, then return to India with validation, customer case studies, and a more mature product.

Still, the company is in active conversations with major Indian financial institutions and large banks. The brand wants to demonstrate that it isn’t just reducing compliance costs, instead, it positions itself as a partner helping firms grow faster with confidence that risks are managed and compliance is built-in.

To serve Indian businesses, Zango will also bring its core AI-powered regulatory solution but adapt it for local needs, especially B2C-facing use cases. “How do companies like PhonePe communicate with consumers, and how do they prove to the regulator that they’re doing the right thing? That’s where we’ll bring value,” added  Singhania.

The year-old startup is still at a very early stage to comment on revenue, but has joined a growing cohort of Indian startups like Sprinto, IDfy, Signzy, Digio, and VComply. Zango’s differentiated edge lies in offering a full-stack regulatory intelligence platform that combines AI with deep legal reasoning. The company has been heavily investing in its technology, hiring lawyers and AI engineers to strengthen its product foundation.

Earlier this month, the startup raised $4.8 Mn in a seed funding round led by Nexus Venture Partners, with participation from existing investors, including South Park Commons, Notion Capital, No Label Ventures, and Start Ventures. It plans to use the fresh capital to expand its teams in Bengaluru and London and to continue building AI-native product modules for governance, risk, and compliance.

It may still be early to say if the market is fully ready for a brand like Zango, but the rise of digital financial products and growing scrutiny from global investors signal increasing urgency around compliance. Success in Indian regulatory tech, however, will ultimately depend on timing, positioning, and proving long-term value.

[Edited By Sanghamitra Mandal]