ThetaRay Can Detect Money Laundering Attempts Before They Are Carried Out, Says CEO

Israel-based cybersecurity company ThetaRay Ltd. can detect money laundering attempts before they are carried out, according to CEO Mark Gazit. “We use artificial intelligence to address a problem that is perhaps the most painful and most critical issue in finance today, money theft and laundering,” he said. Gazit spoke Wednesday at Calcalist's annual Capital Markets Conference, held in collaboration with BDO and Psagot Investment House Ltd. in Tel Aviv.

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Banks today have more data and more technology to protect than most other organizations, and they still have money stolen from them and still see money laundered, Gazit said. According to him, the reason why a lot of financial crimes go undetected is that the security systems operated by financial institutions are based on existing formulas and models—in order for these systems to detect a certain crime you need to teach them the specific model. Gazit also said a lot of financial crime detection happens through recognizing anomalies, but this strategy leads to a lot of false alarms.

“Our system is intuitive, it does the same thing we humans do naturally, like the intuition that lets us know who to friend on the first day of school or hear a small noise while driving and know there’s a flaw in the car,” Gazit said. “Our AI algorithms detect more money theft and laundering and even reduce incidents of false alarm,” he said.

Founded in 2013 and based in central Israel, ThetaRay uses machine learning algorithms to detect system behavior anomalies and threats such as ATM hacking, insurance fraud, and SWIFT-based attacks. Last month, the company received an unspecified investment from Amsterdam-headquartered ABN AMRO Bank NV, made as an expansion of ThetaRay’s $30 million round announced in July. The company has raised about $60 million to date from investors including Jerusalem Venture Partners (JVP), General Electric, SVP Investments, Israel’s Bank Hapoalim, and Israel-based equity crowdfunding company OurCrowd Ltd.