How AI-Driven Customer Risk Assessment (CRA) is Transforming CDD

February 5, 2024
CMO Vered Gottesman asks CPO Dagan Osovlansky about ThetaRay’s new CRA product Vered: ThetaRay just launched CRA – Customer Risk Assessment.  What differentiates ThetaRay’s CRA from existing customer due diligence products on the market? Dagan: Customer due diligence (CDD) requires a comprehensive process covering multiple aspects of understanding the customer. ThetaRay’s CRA product focuses on the risk assessment aspect as part of this entire KYC (Know Your Customer) process. With our new CRA product, ThetaRay conducts a continuous risk assessment throughout the full customer lifetime, not just during onboarding.  Unlike traditional CDD solutions, which often rely on broad classifications and stereotypes, ThetaRay’s CRA product takes a deeper dive into who your customer is by assessing risks on an individual basis. This provides a more accurate and fair picture of each customer throughout their lifecycle. ThetaRay does this by taking data from both demographic/static sources as well as from current and historical transactions. We can assess the risk of a particular individual based on behavior, not just demographic information. So while it is true that certain static data points such as country of residence might be more correlated with financial crime, insights from actual behavior including transactions are more accurate.  ThetaRay’s CRA is fully automated and uses machine learning, which is very different from the rules-based systems available on the market today. With rules-based systems, you set certain criteria and give weight to whether or not the criteria were met and so on. The problem with this is the amount of data and indicators that can be included are very limited. Furthermore, current transaction and behavioral data is not even taken into account.  V: CRA allows you to configure the criteria and cadence of risk assessment throughout the customer journey. How does that work? D: We enable our customers to add criteria or change the weight of criteria, which gives them flexibility.  In addition, CRA allows for cadence calibration. Most due diligence cadences take place once a year for risky customers, or once every two or three years for low-risk customers. While more advanced solutions can trigger an assessment each time your KYC data changes, such as when you move addresses, it’s still based on the same time-limited capabilities.  To truly prevent bad actors from infiltrating banks, one needs to assess risk almost constantly. Thanks to the dynamic, automated process CRA offers, ThetaRay detects high-risk customers much faster compared to three-year-old KYC information that only tells a partial picture at best.  Furthermore, CRA’s superior accuracy means you’ll actually reduce the number of customers categorized as high-risk. That’s because during onboarding, a customer is assessed but only from existing demographic and other static data. As the customer begins to execute transactions every day or week, ThetaRay can assess customers based on behavior and adjust their risk. For example, maybe a customer’s geographic location has a significant amount of financial crime. However, when you see how the customer behaves and that his or her behavior matches the information in the KYC, it becomes

Anti-Money Laundering (AML) New Year’s Resolutions

January 15, 2024
Top Five Things Organizations Can Do to Modernize Their Approach to Addressing Financial Crime By Vered Gottesman, ThetaRay CMO

Kicking Off 2024: The Biggest AML Penalties of 2023

January 14, 2024
As we delve into 2024, it's crucial to reflect on the significant AML penalties of the past year. 2023 witnessed some of the largest fines in the industry, signaling a vital wake-up call for financial institutions

The Hidden Costs of False Positives And How They Impact Your Bottom Line

November 22, 2023
In the world of business, we're bound to encounter our fair share of shady dealings. Picture this: your customer is ordering, but their delivery address doesn’t match the address on their card. Red flag, isn’t it? Or, your loyal customer, Joe, is suddenly going all out with a massive order. That doesn’t sound like your usual Joe. And here's another head-scratcher – orders are raining in, but they're all small fries in terms of money.

Cracking Financial Crime: OpenAI Solution for a Futuristic Investigation Makeover

November 13, 2023
In today's ever-evolving landscape of financial crime, the integration of AI capabilities has become not just an option but a necessity. This strategic alliance between artificial intelligence and human analysts has the potential to revolutionize the way we approach financial crime investigation and reporting. At ThetaRay, we understand the power of AI in this critical domain and have embarked on a groundbreaking collaboration with the technology based on OpenAI to redefine the rules of the game.

Grey List / Black List Update 2023

September 10, 2023
The Grey List and the Black List, created by the Financial Action Task Force (FATF), categorize countries based on their perceived risks and compliance with international standards in countering financial crimes. The FATF is an intergovernmental organization established to combat money laundering, terrorist financing, and other financial crimes globally. The Grey List  The Grey List, officially known as “Jurisdictions under Increased Monitoring,” consists of countries with strategic deficiencies in their frameworks to combat money laundering, terrorist financing, and proliferation financing. These countries are urged to take corrective measures. The Black List The Black List, referred to as “High-Risk Jurisdictions subject to a Call for Action,” includes countries considered severe criminal threats to financial systems. These countries may be involved in activities like weapons proliferation or have not met FATF’s Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) requirements. As a result, FATF member nations are recommended to implement stricter compliance measures, including enhanced due diligence for transactions involving countries on the Black List. According to the FATF, here are the countries that are currently blacklisted and greylisted (updated June 2023): Black List – High-Risk Jurisdictions Subject to a Call for Action: Democratic People’s Republic of Korea Iran Myanmar The Grey List – Jurisdictions under Increased Monitoring  Albania Barbados Burkina Faso Cameroon Cayman Islands Croatia Democratic Republic of Congo Gibraltar Haiti Jamaica Jordan Mali Mozambique Nigeria Panama Philippines Senegal South Africa South Sudan Syria Tanzania Turkey Uganda United Arab Emirates Vietnam Yemen For more information, visit https://www.fatf-gafi.org/en/countries/black-and-grey-lists.html.