Restoring Trust in the Financial System with AI

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Financial institutions are seeking more advanced technology that can protect their networks against money laundering and cybercrime and enable them to increase profits. ThetaRay is rising to the challenge of helping banks and fintechs with unique and powerful AI (Artificial Intelligence) solutions that can imitate human intuition.

Today’s financial crime is sophisticated cybercrime, and it is much more severe and widespread than in the past. Criminals no longer need to take risks, they can simply stay at home and use the advanced technology available to everybody to launder money, finance terrorism, or engage in human or drug trafficking.

One of the reasons for the increased severity of the risks faced by banks and payment services providers is the digitization of authentication processes triggered by the Covid-19 crisis. Today, bank accounts are opened digitally, unlike in the past when customers had to appear in person at the bank. Consequently, the ability of banks to authenticate the identity of customers is significantly reduced. Moreover, when a bank transfers funds between branches or countries, it is exposed to significant risks as it has no way of verifying identities along the entire transfer chain.

Providing customers full trust

Alongside the developments in financial crime and its sophistication, regulations are becoming stricter.  Legacy rules-based tools are no longer capable of contending with the complexity of a large number of players in the financial system with the boom in fintech and the new possibilities available for transferring funds. This applies to hundreds of countries and dozens of types of currency, not to mention new cryptocurrencies entering the global financial stage.

Fintechs offer less expensive services, which among others, are used by migrant workers to send money home. These companies require solutions to enable them to obtain an entry ticket into the world of financial regulation, along with the high degree of credibility required for money transfers.

AI has changed the rules of the game.

It is precisely here where ThetaRay enters the picture. Using a sophisticated form of AI, “artificial intelligence intuition,” it is able to understand what is normal within big data and what is abnormal. The ThetaRay AI engine analyzes the data and consequently understands the behavior of the entities. It labels the unusual transfers that are outside the norm, and all this is accomplished automatically, without the need to teach the system what an unusual/normal transfer looks like. In each proof-of-capability we perform for a bank or a fintech, we find a high number of deviations from the norm, including typologies unknown to the bank or payment fintech.

ThetaRay monitors more than 11 billion transactions a year with valued at over  $15 trillion, belonging to more than a billion accounts worldwide. The solution delivers a 95% level of precision in identifying investigation-worthy cases compared with the legacy solutions offering a rate of only 5%-30%. The number of false positive alerts generated by ThetaRay is up to 99% lower than the existing, legacy solutions, and accordingly, it can help reduce the amount of time required for investigating alerts by at least 50%.

The average deployment time of such a solution is about six weeks compared with 6-12 months for legacy solutions.

ThetaRay’s cloud-based solution allows it to offer its solution as an out-of-the-box SaaS to small and medium-sized banks, as well as payment fintechs.

Written by: Mark Gazit, ThetaRay CEO and President

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