Hawk AI, an anti-money laundering and fraud prevention platform for banks, raises $17 million • businessroundups.org

Hawk AIa German company developing anti-money laundering (AML) and smart fraud prevention for financial institutions has raised $17 million in a Series B funding round.

For now, Hawk had AI raised $10 million, and with another $17 million in the bank, the company said it intends to strengthen its product development and global expansion plans. The Series B round was led by Sands Capital, with participation from Picus Capital, DN Capital, Coalition and BlackFin Capital Partners.

It’s estimated that until Every year $2 trillion in ill-gotten gains are laundered, representing a staggering 5% of global GDP. only 1% recovered from these illegal profits. And this is where Hawk AI sets up its stall.

Founded in Munich in 2018, Hawk AI serves to improve how banks and payment companies manage their compliance risk through a cloud-native, modular AML surveillance system that promises the “highest level of explainability” in its AI-powered decision engine. which is crucial for audits and regulatory investigations.

“Financial institutions and regulators need to be able to understand and trust AI-driven decisions,” Hawk AI co-founder and CEO Tobias Schweiger told businessroundups.org. “The full explainability of such AI is key to building trust and acceptance.”

Hawk AI offers products such as payment screening, customer screening, transaction monitoring, transaction fraudand customer risk assessmentwhich enables its clients to build their own risk assessment model by combining static data (e.g. product or geographic data) with dynamic data (e.g. transactional data such as reports of suspicious activity).

Its clients include European spend management platform Moss, an American payment processing company North American Bank Cardand that of Brazil Banco do Brasil America.

Black box

In addition to the old space incumbents such as farin, BAE systemsand Oraclethere are other notable new entrants to this space including financial fraud unicorn Feedzai and VC Supported Feature Space. However, Hawk AI touts its cloud-native credentials and SaaS business model as one of its key differentiators, compared to the clunky local implementations of many of the legacy players.

But the company is keen to emphasize that it is focused on addressing the “black box” world that AI and machine learning algorithms typically live in. It’s essential to understand why an algorithm made a specific decision, and companies need to be able to justify why a customer was flagged. as a potential scammer.

It’s worth noting that other anomaly detection software does provide insight into what factors led to a flag. But Hawk AI says its patent-pending technology also tells users what the “expected range” of normal behavior is, providing a score for each risk factor in natural human language. The company says this context is key to assessing whether or not a case qualifies as suspicious activity.

“For Hawk AI, explainability consists of two areas,” Schweiger said. “What is the justification for an AI-driven, individual decision and how have the algorithms been developed that contribute to AI? Compliance officers must be transparent about both.”