Applicant name: ThetaRay
Applicant Type: Private Company
Website: www.thetaray.com
Headquarter City: Hod Hasharon
Headquarter Country: Israel
Innovation Name: ThetaRay SONAR AML Transaction Monitoring
Innovation Type: Product
Category: Compliance Solution of the Year
Status of Innovation: In-Market
Innovation Active Since: 05/01/2021

Innovation Description: ThetaRay’s category-leading artificial intelligence (AI) engine, named SONAR, uses unsupervised machine learning that enables uncovering of unknown and known money laundering cases for financial institutions.

ThetaRay’s AI and machine learning technology, a methodology called “artificial intelligence intuition,” uses proprietary unsupervised and semi-supervised machine learning algorithms that replace human bias. This empowers the system with an unmatched ability to recognize anomalies and find unknowns outside of normal behavior, compared with rules-based or supervised machine learning solutions.

The ThetaRay machine-learning (ML) methodology and algorithms are applied to dozens of risk indicators associated with financial crimes. This risk-based AI approach paints a clear picture for compliance teams that enables them to detect abnormal activity within large sets of data and to effectively calculate and pinpoint transactions indicating suspicious activities. ThetaRay’s ML process also provides insights into customer identity in cases with limited visibility where KYC information is lacking, creating risk profiles of non-customers and transparency across complex paths.

Using 19 patented algorithms, the system identifies the abnormal customer or transactional behavior patterns which deviate from the expected or “normal” behaviors from an AML risk perspective. In this way, differs from rules-based approach by enabling a multi-dimensional view of the data, meaning, not relying on specific scenario or threshold to generate an alert but measuring several risk indicators and data points to find the unusual events.

This enables the rapid discovery of both known and unknown money laundering threats, with a peerless 95% detection rate and a 99% reduction in false positives compared to rules-based solutions.

Innovation Inspiration: Developed by world-renowned mathematicians, ThetaRay AI is based on 20 years of research by Prof. Ronald Coifman of Yale and Prof. Amir Averbuch of Tel Aviv University. ThetaRay brings a transformational approach to big data analytics, isolating problems buried beneath big data and pinpointing opportunities concealed within traditional systems.

Allowing the data to lead to the abnormalities, instead of telling the system what to look for in a rules-only based method, ThetaRay’s AI can thereby detect new and unpredictable typologies, or “unknown-unknowns.”

Financial institutions find great benefit in the use of unsupervised machine learning to detect unknown financial crime typologies and significantly reduce the false positives associated with legacy, rules-based systems.

With ThetaRay, clients obtain measurable value in days and achieve full deployment in a matter of weeks. From that point on, ThetaRay’s system runs automatically, without intervention from client personnel and with the continuous support of an adaptable platform.

Who can benefit from your innovation most? Leading fintechs and banks are transforming their compliance today with ThetaRay. New customers that chose ThetaRay in 2022 to improve their risk coverage and compliance operation include Payoneer, MFS Africa, Travelex Bank and Mashreq Bank. MTOs and regulators can benefit from ThetaRay AI innovation as follows:

Grow business – ThetaRay’s solution instills the trust into cross-border payments that enables organizations to accelerate growth and revenues , expand business into new areas and with new partners and onboard customers and financial institutions that would otherwise reject them.

Improve customer satisfaction – ThetaRay enables higher customer satisfaction since the good customers get a highway, and only the rogue players hit a barrier, making payments faster and cheaper.

Reduce compliance costs – ThetaRay’s solution cuts the cost of managing compliance and provides overall operational savings by reducing false alerts by up to 99% and analyst investigation time by 50%.

Increase risk coverage – ThetaRay SONAR significantly reduces exposure to de-risking and fines, ensuring safe and secure payments.

What are you most proud of about your innovation? The digital payments boom that took off globally during the pandemic is opening new access and lower costs for the unbanked to the world economy, providing opportunity for prosperity and financial empowerment. All people should be able to send and receive money under fair terms when they need it. In parallel, however, the trend by banks to de-risk to protect their channels from being a clearing house for potentially dirty money is a threat that can reverse the progress in bringing billions of people better access to the world economy. This is fundamentally wrong.

New technologies using artificial intelligence for data analysis make it possible for banks to reduce their AML exposure without having to de-risk, which enables them to open the arteries of the banking system to all. Tech is also enabling the growing number of payments service providers to facilitate cross-border payments and remittances, but they must meet regulatory requirements. For FinTechs, the ThetaRay solution is, therefore, a game-changer offering two major benefits. First, the solution doesn’t create a counterproductive situation by being a heavyweight that blocks and slows business. Second, it serves as a value layer for FinTechs, PSPs and other financial institutions by opening doors to business.

Why do you think you should win this category? For FinTechs, the ThetaRay solution is a compliance game-changer offering two major benefits. First, the solution doesn’t create a counterproductive situation by being a heavyweight to operate requiring huge teams, and slowing transfers and business. Second, it serves as a value layer for by opening doors to business and to financial ecosystem partnerships with financial institutions that would otherwise reject them. A cloud-native SaaS solution, ThetaRay SONAR enables fintechs to acquire best of breed technology and quickly ramp up compliance.

Cross border payment traffic is estimated to grow to $39.9 trillion by 2026, providing a significant source of revenues for banks and a doorway for FinTechs, especially in the developing world, to access global payment markets.

As digital payment velocity increases, AML compliance managers are exposed to enormous volumes of data. Bad actors continuously develop new modus operandi, changing criminal schemes faster than investigators can get on the trail of crime. ThetaRay’s breakthrough SONAR AI-powered transaction monitoring solution uses sophisticated, innovative Artificial Intelligence (AI) technology to deliver an end- to-end solution for effective and efficient Anti-Money Laundering (“AML”) controls.

SONAR is a cloud-native solution, offering fast and easy access for payment fintechs looking to enter the market with a solution requiring minimal manpower and the ability to scale.


Full Name: Natalya Rahmany
Role: Director of Sales and Marketing Operations
LinkedIn: https://www.linkedin.com/in/natalya-rahmany-896a2031/

Full Name: Nina Gilbert
Role: PR and Content Manager
LinkedIn: https://www.linkedin.com/in/nina-gilbert-58285a4/