Our Innovation Analysts recently looked into emerging technologies and up-and-coming startups working on innovative solutions to tackle corruption, money laundering, and terrorism financing. As there is a large number of startups working on a wide variety of solutions, we want to share our insights with you. This time, you will discover 7 promising anti-money laundering solutions.
Heat Map: 7 Top Anti-Money Laundering Solutions
Using the StartUs Insights Discovery Platform, covering 1.379.000+ startups & scaleups globally, we identified 555 relevant solutions and picked 7 to showcase below. These companies were chosen based on a data-driven startup scouting approach, taking into account factors such as location, founding year, and relevance of technology, among others. Depending on your specific criteria, the top picks might look entirely different.
The Global Startup Heat Map below highlights 7 startups & scaleups developing innovative anti-money laundering solutions. Moreover, the Heat Map reveals regions that observe a high startup activity and illustrates the geographic distribution of all 555 companies we analyzed for this specific topic.
HAWK:AI – Real-Time Transaction Monitoring
One of the biggest challenges facing anti-money laundering investigations is the time it takes to reach any kind of resolution. To add, organized criminals use sophisticated and high-tech methods to keep up their illegal practices. There is also evidence to suggest that the existing techniques of tackling financial crime are outdated. For example, globally, thousands of people are part of a government financial crime blacklist and the total money laundered annually currently hovers 2% – 5% of global GDP. Given all of this, startups are working on artificial intelligence (AI) solutions that increasingly play a key role in helping financial institutions detect, tackle, and prevent financial crimes.
HAWK:AI is a German startup that performs AI-based real-time transaction monitoring and enables financial crime prevention compliance. The end-to-end AML solution aids financial companies with transaction monitoring, investigation, filing, and audit trails. The startup’s AI detects patterns in crime across financial institutions, while reducing the number of false positives, and offers traceability and audit trails for automated processes. The solution helps financial institutions lower their spending on AML compliance and also improves the efficiency of several processes.
riskCanvas – Financial Crimes Software Suite
The mandate and implementation of know-your-customer (KYC) in financial institutions exist mainly to protect banks from being used for money laundering. KYC helps banks and other financial institutions identify accounts quickly and detect unusual transactions. For this purpose, technology plays a crucial role in improving regulatory and AML compliance within financial institutions. Startups are building AI algorithms and RegTech approaches to tackle various challenges preventing financial services from complying with AML regulations.
The US-based startup riskCanvas deploys a three-pronged approach to help financial institutions tackle financial crime. The startup’s financial crime software suite includes its Entity Analytics Module, a platform for enriching customer profiles, risk scoring customers and accounts, and analyzing networks. The Investigation Management Module is a comprehensive case management platform for accelerating investigations. Lastly, the startup’s Transaction Surveillance Module allows financial crime investigators to design, test, and execute various transaction scenarios. Together, these AML tools provide fraud teams within financial institutions with a robust solution for financial crime prevention compliance.
HydraAML – Digital Money Marking Technology
The existing methods of detecting illegal activities and related financial transactions are ineffective, resource-intensive, and often expensive. This encourages emerging startups in the field of AML to develop suitable technology-based tools to counter the sophisticated threat of financial fraud. Some examples of anti-money laundering tools include augmenting processes, tracking transactions, and using AI to detect patterns in isolated transactions that breach predefined limits. However, even these measures may not be enough to tackle all types of financial crime.
HydraAML is a British startup developing digital money marking technology to offer financial institutions a tool to counter money laundering. HydraAML marks the digital money with a coded string of characters that contain all the necessary details and offers a readable and expandable system for managing dozens of transactions. Moreover, using a money marking technology, the startup aims to reconstruct and identify the entire trail of money, from its origin to its final use. Along with the markers, the startup’s patent-pending CashDNA solution utilizes AI to make different packages of money identifiable and traceable across transactions and systems.
Salv – AML Data Intelligence
Financial and organized criminals are constantly trying to game existing systems to avoid being caught for their actions. For example, banks rarely have access to data from other banks. However, data is essential to detect money laundering patterns and accounts. Advancement in data privacy and security solutions, as well as data anonymization for data sharing, helps startups develop novel solutions for financial fraud detection. Such smart anti-money laundering solutions significantly help reduce the time spent by compliance professionals to complete their investigations.
Estonian startup Salv bridges the AML intelligence gaps for financial crime compliance teams by providing access to secure third-party data. AML Bridge Estonia provides financial institutions with a more complete data-driven picture of their compliance processes. The solution enables customer risk scoring, transaction monitoring, and reputational risk management. Additionally, Salv’s solution is GDPR-compliant and pursuing SOC2 compliance to protect the flow and management of data. The startup also helps financial institutions adopt a risk-based approach to fighting financial crime and keep up with constantly-evolving regulations.
Quantexa – Financial Crime Prevention for Governments
One of the most influencing factors for government-related negligence and lethargy is poor public financial management. The journey from the sources of income, such as debt, national production, and natural resource income, to public service delivery, is full of financial leaks, resulting in inefficient policy implementation. The ability to quickly detect such money misuse, and act on the information, can save governments billions of dollars. GovTech startups are developing AI-based solutions to help governments detect and manage financial fraud.
Quantexa is a US-based startup building a scalable, integrated, and modular Contextual Decision Intelligence (CDI) platform. CDI provides governments and financial institutions with analytics and visualization, as well as data aggregation and network generation solutions. For governments, CDI is useful in detecting tax fraud, improving customs controls, monitoring benefits, and visualizing robust networks. The solution also empowers law enforcement agencies to fight financial crime. The solution helps government agencies improve financial crime prevention compliance and investigation processes, while also enabling secure data sharing across jurisdictions.
bronID – AML for Investment & Trading
The securities and derivatives sector attracts a wide range of criminal threats, often involving sophisticated tactics and methods. Moreover, an annual increase in the number of scams related to stock markets and insider trading forces companies to protect their information and money. Given the direct impact public markets have on the short-term health of any economy, startups are developing useful tools to combat money laundering of publicly-owned money.
Australian startup bronID helps businesses protect themselves from the adverse impact of financial crime. The startup provides tools and policies to effectively combat money laundering and counter terrorism-financing (CTF). In addition to improving compliance with AML policies, bronID also conducts independent reviews and detailed assessments. This fills the gaps in existing AML and CTF policies and procedures.
KYC Global – AML for Natural Resource Companies
Natural resource companies from the oil & gas (O&G) and mining industries require strict measures to achieve financial crime compliance and manage reputational risks. The significant risk of bribery and corruption, and the ineffective screening of suppliers, counterparties, and business partners, prompt the industry to seek technology-driven compliance and RegTech solutions. Further, by screening for money laundering practices, natural resource companies stand to improve efficiencies and reduce considerable overhead and delay costs.
KYC Global is a Japanese startup offering RiskScreen, an easy-to-use platform to enable AML policy compliance. RiskScreen allows compliance professionals to screen parties against Dow Jones sanctions, watchlists, politically-exposed persons (PEPs) databases, and public search engines. The solution also scours the deep web, in real-time and in a single application. The startup achieves optimal compliance by facilitating frictionless internal data economies to manage the risk of financial crime.
What about the other 548 solutions?
While we believe data is key to creating insights it can be easy to be overwhelmed by it. Our ambition is to create a comprehensive overview and provide actionable innovation intelligence and enable you to achieve your goals faster. The 7 anti-money laundering solutions showcased above are promising examples out of the 555 we analyzed for this article. To identify the most relevant solutions based on your specific criteria, get in touch.