How Droit Built a Platform Processing Millions of Rule Checks Each Day

A trader at Goldman Sachs enters a derivatives order. Before the transaction executes, software checks it against thousands of regulatory rules across multiple jurisdictions. The system returns an answer in milliseconds: approved or blocked. No compliance officer reviews it. No lawyer signs off. That system is Droit, and it’s processing tens of millions of similar queries every day for the world’s largest banks.

The New York startup has raised $39 million to automate regulatory compliance through its Adept platform. Goldman Sachs, Wells Fargo, UBS, Morgan Stanley, and BNP Paribas all use the system in live trading operations. The company closed a $23 million Series B in March 2023 led by UBS, following a $16 million Series A in 2016 backed by Goldman Sachs and Wells Fargo.

Founders Brock Arnason, Satya Pemmaraju, and Anup Menon launched the company in 2012 after watching banks waste billions solving identical regulatory problems. Arnason had managed compliance programs at Morgan Stanley and UBS following the 2008 crisis, seeing how post-crisis reforms created a regulatory maze. A single cross-border swap might need to satisfy Dodd-Frank in the US, MiFID II in Europe, and dozens of other frameworks simultaneously. Every bank interpreted these regulations independently and built separate systems, duplicating work across the industry.

The waste was staggering. Financial institutions spent $274 billion on compliance in 2022, often consuming more than 5% of annual budgets. Arnason’s pitch was that regulations apply equally to all market participants, so there’s no competitive advantage in each bank solving the same problems. His solution was to centralize regulatory interpretation and distribute it as shared infrastructure, with banks paying subscription fees tied to transaction volume.

Getting there required Droit solving a brutal technical problem. Regulations are written in dense legal language full of ambiguity and cross-references. Droit needed to translate this into executable code that could return decisions in sub-millisecond latency without crashing trading systems. Any service interruption would halt operations at major institutions. In fast markets, delays of even 50 milliseconds cost money, and uptime had to be near-perfect.

The company went live with its first client in February 2014, starting with Dodd-Frank compliance. The system digitizes regulations using machine-readable legislation in the Akoma Ntoso XML standard, embedding directly into banks’ pre-trade systems through APIs. When traders enter transactions, the platform evaluates them against relevant rules in real time and returns a binary answer. It ships more than one data release per day on average, pushing regulatory updates to all clients simultaneously when rules change.

But the harder sell was the consensus model. Rather than each bank interpreting regulations independently, Droit convenes working groups of compliance experts from across institutions to agree on how unclear rules should be applied. This creates consistency across the financial system and gives regulators visibility into how mandates get implemented. It also requires banks to trust competitors with compliance logic, something most initially resisted. Convincing risk-averse institutions to outsource regulatory decisions to shared infrastructure took years of relationship building.

Strategic investors helped break through that resistance. Goldman Sachs, Wells Fargo, and principal trading firm DRW led the $16 million Series A in December 2016, becoming both investors and clients. Joanne Hannaford, (previously managing director of technology at Goldman Sachs), has said that the bank was pleased to back what could become the industry standard for regulatory-compliant decision engines. The investors stress-tested the platform in live production environments, validating that it could handle enterprise scale while funding global expansion.

That validation paid off. By January 2018, six banks had adopted the MiFID II trade compliance engine ahead of the regulation’s deadline. BNP Paribas deployed it across fixed income trading. Goldman Sachs rolled it out in both broker-dealer and asset management businesses. UBS integrated it across trading operations. Cyril Cottu, global head of e-commerce at BNP Paribas Global Markets, called it core to the bank’s digital strategy. The deployments proved the system could handle real-world complexity, though they also exposed limitations around edge cases and ambiguous regulations that resisted automation.

Those challenges haven’t slowed growth. The March 2023 Series B brought UBS in as both expanded client and investor through its venture arm UBS Next, with Goldman Sachs participating again. Mike Dargan, UBS chief digital officer, said the bank would extend Droit across wealth management to unlock revenue by simplifying real-time compliance. The $23 million round funded 70% headcount growth over two years and opened a Singapore office for Asian expansion, while accelerating product development into cross-border suitability tools and transaction reporting.

The company pushed further into new territory in July 2025 with Explore Mode, using newly patented technology that flips the traditional compliance model. Instead of checking complete transactions against rules, the tool lets institutions input partial details or desired outcomes to discover what’s legally possible. Banks can identify scenarios that fit defined constraints while meeting all applicable regulations, or upload millions of historical transactions for bulk evaluation to spot common reporting issues.

European expansion accelerated with the hiring of Jean-Marie Auffret as head of European sales. Auffret previously led sales at Deutsche Börse’s regulatory services division and Xtrakter, bringing deep relationships in a market facing updated reporting obligations. The appointment signals aggressive growth as institutions implement evolving frameworks and look for automated solutions.

Arnason, now CEO after Pemmaraju’s departure, describes the mission as treating law as data. The Adept platform converts legal texts into structured decision logic that drives automated compliance, with users accessing a digital library that displays regulation versions and annotations linking source text to decision models. Client relationships have proven sticky once banks integrate the system into core infrastructure, as switching costs are high and any downtime halts trading operations.

That stickiness has built predictable recurring revenue as the regulatory environment keeps expanding. Climate disclosure requirements, cryptocurrency regulations, and cross-border data transfer rules all create new compliance obligations that can be automated. Wealth management represents a significant opportunity beyond institutional trading, by applying the same technology to areas where regulations govern which products can be sold to which clients in what jurisdictions. As markets grow more complex and global, Droit has positioned itself as an essential piece of infrastructure for institutions managing billions in daily transactions.