Hawk, a fraud and money laundering prevention provider, raised $56 million.
The mentioned company, based in Germany, received the specified financing as part of the Series C funding round. The firm released the relevant information on Tuesday, April 8. The company stated that the mentioned money will help it to finance further product line innovations and fuel expansion efforts, especially in the United States.
The firm noted that its solutions help banks go beyond the traditional, rule-based approach to combating money laundering and fraud. In this context, it was separately highlighted that traditional systems generate significant problems for compliance teams, including a huge number of false positive alerts that need to be checked, which leads to staffing challenges and costs.
The company also separately noted that criminals may find ways to subvert the rules that would cause their illegal activity to be overlooked. The firm claims that its artificial intelligence-powered tools can improve the accuracy of uncovering more financial crimes while reducing the number of false positives.
Hawk chief executive officer Tobias Schweiger stated that every financial institution that wants to reduce compliance workloads and improve the accuracy of risk detection should use machine intelligence to achieve appropriate goals. According to the head of the company, the performance results in the mentioned area are compelling. It was noted that in some cases Hawk managed to increase the accuracy of alerts to almost 90% and at the same time significantly reduce the number of false positives. Tobias Schweiger also stated that the company uncovers twice as many previously undetected cases of novel criminal activity.
Hawk announced the funding round at a time when banks are showing increased activity related to anti-money laundering and fraud efforts. At a hearing before Congress last week, representatives of the banking sector called for a whole government approach to combating payment and investment scams.
Darrin McLaughlin, executive vice president and chief anti-money laundering and sanctions officer for Flagstar Bank, testified on behalf of the American Bankers Association, stating that one in three American adults has experienced financial fraud as a victim. It was separately noted that in this case, the data for the last 12 months is meant.
Darrin McLaughlin stated that the bad actors used cutting-edge technologies, social media, and telecommunications to target the life savings of residents of the United States. He told this to the House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions. According to him, a strategic approach is needed that includes the banking industry, government, and stakeholders. He also noted that regulatory reforms allow to focus on the real threat.
Currently, most financial institutions use technologies such as artificial intelligence and machine learning to uncover and prevent fraud. The results of a special industry study indicate that last year in the United States more than 70% of financial institutions leveraged the mentioned technologies for the specified purposes. In 2023, the corresponding figure was 66%. It is worth noting that AI not only detects suspicious activity but also draws attention to patterns in the methods of criminals.
The issue of cybersecurity has become more relevant against the background of the intensive development of advanced technologies. In this context, it is worth noting that scammers also have access to artificial intelligence tools. As a result of using AI, their activities have become more sophisticated. One of the tools for countering this threat in the virtual space is the personal awareness of users. For example, an Internet search query such as how to know if my camera is hacked will allow anyone to get information about signs of unauthorized access to the device. Digital literacy is an effective tool for countering cybercrime, which in the vast majority of cases is aimed at stealing victims’ money.
As we have reported earlier, Octane Raises $6.75 Million for Cybersecurity Solution for Blockchain.
