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October 15, 2021updated 20 Dec 2021 2:39pm

Child trafficking, AI, the financial sector and the ThetaRay solution

By Douglas Blakey

If human trafficking was not profitable, it would not exist. But how can it be made unprofitable? ThetaRay, the cybersecurity and big data analytics company that provides a platform for detection of unknown threat and risks to protect critical infrastructure and financial services, has a solution.

Moreover, ThetaRay can highlight a recent example of the solution successfully beating the criminals and protecting a major bank client.

Forced labour: $150bn in illegal profits

A sobering 27% of human trafficking victims are children. Forced labour generates $150bn billion in illegal profits annually. This is therefore a real challenge for all banks, incumbents and challengers, in mature and emerging markets.

As Yaron Hazan, ThetaRay’s VP of Regulatory Affairs tells RBI, existing systems no longer work to fight financial crime in general and the detection of child trafficking profits is just one significant such example.

Says Hazan: “ThetaRay technology detected a child trafficking scheme. One of the largest banks in the world found that a subsidiary in Europe was used to launder money intended to finance child trafficking.

“It was a very sophisticated scheme. Specifically, it involved many cross-border banking transfers related to ‘medical tourism’ without clear business activity. It is the kind of crime that is almost impossible to discover unless you know what you’re looking for.

ThetaRay VP of Regulatory Affairs Yaron Hazan speaks with RBI editor Douglas Blakey

“The ThetaRay system discovered it in days. The bank immediately filed an SAR, and a law enforcement investigation revealed that it was tied to child trafficking.”

Advanced AI technology is able to detect sophisticated money laundering schemes linked to this sort of crime.

The hope is that, if banks can proactively and continually stop illicit profits from getting through and alert authorities to suspicious accounts, some traffickers will be apprehended, and others will decide it is not worth the risk.

It is just one example of ThetaRay’s advanced AI and its development of algorithms that go beyond machine learning to mimic the way that human intuition, common sense and gut feeling work.

The ThetaRay USP

ThetaRay says that its technology is the only end-to-end solution that uses artificial intuition for data integration and alert triage.

In addition, it is one of the only packaged SaaS offerings that analyses SWIFT traffic, risk indicators and client/payer/payee data to detect anomalies indicating money laundering activity across complex, cross-border transaction paths. It is also one of the only AI-driven AML solutions that can be easily integrated and deployed within days. And with minimal implementation required.

With proven innovative data integration all the way to alert resolution, ThetaRay’s solution increases detection capabilities for both supervised and unsupervised data, and includes profiling and advanced analytics assessments, all in one platform.

The move to digital has created an exponential increase in high-risk transactions and threats.

ThetaRay is taking those algorithms and converting them into well-defined and well-packaged products. As a result, it is helping large financial institutions solve these problems.

The pandemic has not just accelerated the drive to digital. In security terms, it made a challenging situation even worse.

Covid also coincided with the financial industry and payments ecosystem increasing their adoption of cloud-based systems to accommodate remote working.  As a result, there is an increasing requirement for solutions that can detect money laundering in a cloud-based environment.

ThetaRay partners with Google Cloud

So ThetaRay’s announcement in June of a global partnership with Google Cloud to protect banks, fintechs, PSPs and payments infrastructure companies against money laundering activity hidden within cross-border transactions was timely. Through the alliance, ThetaRay’s Cloud-Based AML Solution for Cross-Border Payments will be available as a service on Google Cloud.

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