Dagan Osovlansky, Chief Product Officer at ThetaRay talks about the benefits of using AI to prevent financial crimes while highlighting more on what FIs can do to ensure better protection and security for end users in this catch-up with Global Fintech Series:
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Hi Dagan, we’d love to hear about some of ThetaRay’s most recent fintech innovations and enhancements.
ThetaRay recently made significant strides in the fintech sector with our cutting-edge AI-powered solutions for trusted global payments. In September 2023, we raised $57 million in a growth round led by Portage, with continued support from investors JVP, OurCrowd and others. This funding is helping accelerate our global expansion to meet the growing demand for advanced financial crime detection technology. Among our most recent innovations and enhancements are two holistic risk management AI products: Client Risk Assessment (CRA), launched early this year, and our recently acquired screening solution.
ThetaRay’s leading innovation is our Transaction Monitoring product, powered by patented AI algorithms, which quickly identifies potential anomalies and suspicious activities in financial transactions. ThetaRay’s solution reduces investigation times by over 50% and achieves a 99% accuracy rate in minimizing false positives, setting a new standard in the industry for financial crime detection.
When it comes to the latest ways in which AI is redefining how financial crime is managed, what top trends are piquing your interest from the global fintech market?
AI is truly transforming financial crime management, bringing several exciting trends to the forefront. One major trend is the use of AI to tailor solutions to institutional risk for financial crime detection.
This trend is pushing fintech companies to adopt AI-powered solutions. This enhances the effectiveness of their anti-money laundering framework, by increasing their risk coverage and helping them grow a compliant business. Additionally, AI is increasingly being used to develop behavioral analytics models that assess the risk profiles of individuals and entities. In a proactive approach, machine learning is helping more and more fintech companies to move beyond the one-size-fits-all strategy by allowing them to segment customers by risk level. Lastly, machine learning algorithms are being employed to analyze real-time data, allowing for more accurate detection of suspicious activities and reducing associated risks.
With the rising demand of real-time payments, this real-time detection is a game-changer in monitoring suspicious activity all while enabling seamless customer experiences. These trends are not only improving the efficiency and effectiveness of financial crime detection but also fostering a more personalized innovative financial services landscape.
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Tell us more about ThetaRay’s recent acquisition of Screena and how this will change the game for end users of the tool?
Our recent acquisition of Screena, a European screening company, is a strategic move to bolster our AI-powered financial crime detection product suite. This acquisition reinforces our commitment to providing state-of-the-art AI solutions for compliance, integrating insights from a full risk management portfolio. For end users, this means access to a first-of-its-kind integrated AI risk management platform that leverages unsupervised and semi-supervised machine learning for anti-money laundering efforts.
ThetaRay’s product suite employs dynamic risk detection methodologies to enhance both efficiency and performance. Our fintech clients benefit from a unified, accurate view of risk across their entire portfolio, eliminating the need to interpret data from separate silos or manage multiple integrations with distinct solutions. By working harmoniously, ThetaRay’s solutions provide deeper risk insights and more precise alerts, enabling customers to detect financial crimes with greater effectiveness.
What about today’s state of financial crime should modern fintechs and financial institutions pay more attention to?
In today’s landscape, there are several critical areas that fintechs and financial institutions need to pay close attention to. One of the most pressing issues is compliance with FinCEN’s beneficial ownership reporting requirements. Ensuring transparency and preventing illicit activities is crucial for both large and small institutions. Additionally, as institutions increasingly partner with third parties, robust risk management practices are essential to mitigate potential risks associated with these partnerships.
Effective management of sanctions programs is another vital area to focus on to avoid legal and reputational risks.. Thirdly, using AI-driven tools for non-documentary identity verification is becoming increasingly important for enhancing financial inclusion and ensuring secure customer identification. Lastly, the growing popularity of cryptocurrencies has introduced new avenues for financial crime. AI-driven tools can monitor cryptocurrency transactions, identify potential risks, and ensure compliance with emerging regulations in this space. By prioritizing these areas, financial institutions can better navigate the complexities of modern financial crime and enhance their overall security and compliance efforts.
Please share five thoughts on the future of AI and fintech before we wrap up.
- The future of financial services will be profoundly shaped by AI, driving a new era of hyper-personalization where customer experiences are meticulously tailored to individual preferences and needs. This shift will redefine customer engagement and satisfaction, making financial services more intuitive and responsive.
- AI algorithms will continue to advance, offering increasingly sophisticated methods for detecting and preventing financial crimes. The combined use of AI and big data analytics will enhance the security of financial systems, providing robust protection for both institutions and their customers against ever-evolving threats.
- The rise of AI-powered RegTech solutions promises to revolutionize compliance processes. By streamlining and simplifying these complex tasks, AI will allow financial institutions to adhere to regulatory requirements more efficiently, freeing them to focus on growth and innovation while maintaining rigorous standards.
- As AI improves at analyzing unstructured data, financial institutions will gain deeper insights from sources like social media and news, enhancing their ability to identify emerging risks and opportunities.
- AI-powered solutions are set to play a pivotal role in the evolution of digital wallets and mobile banking. Particularly in remote or underbanked regions, these advancements will ensure that more people have access to essential financial services, fostering economic participation and growth in areas that need it most.
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ThetaRay is a pioneer in the field of AI-powered Anti-Money Laundering (AML) transaction monitoring and screening, delivering solutions to fintechs, banks, and regulatory bodies across the globe. ThetaRay’s technology enhances trust in both cross-border and domestic financial transactions, enabling compliant business growth. In turn, customers can confidently expand their business and deliver innovative products to cohorts and jurisdictions previously considered high-risk.
Dagan Osovlansky, is Chief Product Officer at ThetaRay
