The global fight against financial crime – 5 fintechs leading the charge

If financial crime was a major talking point pre-pandemic, the last 12 months has thrust it into the limelight even further, with changing business & customer behaviour prompting fraudsters to take advantage of the global shift towards digitisation. Take fraud for example – according to the Action Fraud team, there were 6,000 cases of covid-related fraud and cyber-crime recorded by the UK’s police forces during the pandemic, with £34.5m stolen since 1st March 2020.

Further, you’ll have done well to miss the breaking news in the finance industry earlier this month when the FCA kicked off criminal proceedings against NatWest, who allegedly failed to comply with money laundering rules between 2011 and 2016. The FCA claims that deposits totalling £365m (£264m in cash) were made into a UK account during that five year period and alleges NatWest’s AML systems failed to monitor and scrutinise the transactions. This marks the first time the FCA has taken criminal action against a bank.

Life may finally be reverting to something that resembles normal, but the last 12 months has accelerated the rate of financial crime and thus the fight against it. Here, we’ve taken a look at five rapidly growing fintechs who are making it their mission to protect businesses and consumers from the increasing number of fraudsters operating globally.

Shield (Tel Aviv)

Shield uses artificial intelligence to help large banks and financial institutions comply with fast-changing regulations.

According to The Times of Israel, European banks generate, on average, over 200,000 emails and 100,000 chat messages each day due to traders and other professionals talking across numerous platforms. Shield helps financial institutions stay on top of multiple communication chains, enabling companies to adhere to the stringent rules tied to communications and detect fraudulent behaviour.

Headed up by CEO Shiran Weitzman, Shield uses data analytics such as natural language processing and AI to flag suspicious communications, detect patterns, and archive relevant information.   Alongside the several major banks they serve, Shield recently signed a partnership with mobile archiver TeleMessage to capture and store WhatsApp and other mobile messages.

Elucidate (Berlin)

Founded by CEO Shane Riedel in 2018, Elucidate recently made the headlines for its impressive €2.5 million pre-Series-A funding round, led by Frontline Ventures, taking its total raised to over €5 million in just seven months.

It’s a financial crime risk management company enabling financial institutions to benchmark and price financial crime risk through an automated platform they call the Elucidate FinCrime Index (EFI), developed in partnership with leading global correspondent banks.

Elucidate’s mission is to become the universal standard in financial crime risk management – its EFI Index uses probability and machine learning to “predict and prevent financial crime before it happens”, and is the only regulated financial crime risk tool in the industry. The tool is currently used by over 2,700 financial institutions and Elucidate provides risk scores for customers across five continents.

ComplyAdvantage (London)

Led by founder and CEO Charles Delingpole (former Market Finance), London-based ComplyAdvantage automates AML risk monitoring through advanced machine learning to help companies maintain high standards of compliance oversight and uncover hidden risks during customer onboarding and throughout the client lifecycle.

Its proprietary database is derived from millions of data points that provide dynamic, real-time insights across sanctions, watchlists, politically exposed persons, and negative news. This improves how companies screen and monitor clients and transactions and ultimately reduces dependence on manual review processes and legacy databases by up to 80%.

In July 2020, mid-pandemic, the company announced a growth funding round of $50 million to expand its reach and operations.

Elliptic (London)

Founded in 2013 with a London HQ, Elliptic is a blockchain analysis firm and global leader in crypto asset risk management solutions, enabling financial institutions and cryptocurrency businesses to manage risk on the blockchain. Its two main products, Navigator and Lens, help customers detect and prevent crypto-related financial crime.

CEO Simone Maini describes Elliptic as “the global standard for blockchain intelligence”. Specifically, they identify financial crime and illicit activity on the bitcoin blockchain. Their clients not only include financial institutions who primarily use their AML software, but also law enforcement agencies who have used the company’s forensics software to track bitcoin terrorist funding.

Fascinating data analysis from the firm has revealed headline-grabbing trends in recent months, including a report in November of a $1bn transaction of bitcoin funds believed to have originated from Silk Road – the online black market shut down by US federal authorities in 2013.

Revelock (Alcobendas)

Known up until recently as buguroo, the firm has this week changed its name to Revelock as it accelerates its mission to “reverse the rising tide of online bank fraud.”

As part of the rebrand, Revelock has announced a new Advisory Board, which now comprises a number of digital identity experts to further reinforce the firm’s ability to protect banks, fintechs and their own customers from the increasing number of online fraud attempts.

Revelock leverages behavioural biometrics and hybrid AI to perform Know Your User processes, continuously verify their BionicID digital fingerprint, and prevent account takeover by RATs, zero-day malware, bots, phishing, and social engineering scams.

Its CEO & founder Pablo de la Riva is on a mission to “proactively stamp out bank fraud”, and the company has just unveiled the Revelock Fraud Detection & Response Platform to boost its ability to protect against more threats and further reduce the operational costs of fighting fraud.

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