ThetaRay Raises $57 Million for AI-Driven Financial Crime Detection

Payments firm ThetaRay has raised $57 million to boost its financial crime detection capabilities.

The growth round, announced Tuesday (Sept. 5), was led by Portage and will allow ThetaRay to accelerate its global growth plans.

“Global payment infrastructure too often fails to accurately differentiate between perfectly legitimate transactions and ones from bad actors dealing with illicit funds,” Peter Reynolds, ThetaRay’s recently appointed CEO, said in a news release.

“We’re proud to be at the forefront of the revolution to make global transactions easier, safer, and cheaper and are keenly aware of the massive vote of confidence this investment is in both our technology and our team,” he added. 

ThetaRay offers a cloud-based transaction monitoring and screening tool that uses artificial intelligence (AI) to track transactions and permit the safe flow of funds, helping banks and FinTechs reduce the risk of financial crime. Its customers include Santander, Travelex, Mashreq Bank, MFS Africa and ClearBank.

“Global trade has suffered from payment networks becoming risk averse, seeing global interbank corridors reduced by 40%, causing global payments to become hard to complete, unpredictable and costly,”  the release said. “ThetaRay turns this trajectory on its head, and ushers in financial inclusion, unlocking business across regions and industries.” 

The funding comes at a time when AI is proving to be both a blessing and a hindrance for payments security, as noted here earlier this year.

“We continue to see a hockey stick increase in digital identity information being compromised and used for synthetic identity fraud, account takeover fraud and other types of digital identity abuse,” Erika Dietrich, head of risk services for ACI Worldwide, told PYMNTS in May.

That fraud has been fueled in part by bad actors using AI tools like ChatGPT to commit digital identity fraud. But it has also helped companies build their defenses.

As PYMNTS has reported, there is a “greenfield opportunity” for businesses to automate the verification of counterparties’ identities, payment details and accounts, with 42% of consumers saying they want to verify their identity every time they pay for a good or service. 

“Tapping AI tools to power authentication and enterprise-level digital identity verification has become crucial to helping firms identify and protect against today’s unique variants of digital fraud,” PYMNTS wrote. “Still, many global businesses lack access to the modern digital tools needed to identify fraud vulnerabilities and mitigate their risks.”

Although 38% of businesses are using document and identity authentication tools, PYMNTS Intelligence shows that a little more than 7 in 10 businesses said they need additional digital fraud solutions.