London, 23rd February 2022: Financial Crime Intelligence startup Schwarzthal Tech has raised £150,000 in a pre-seed funding round from SFC Capital, the UK’s most active seed-stage investor. Schwarzthal Tech uses AI to fight financial crime by gathering publicly available information and building an individual’s network to support investigations into potential criminals. Schwarzthal Tech will use the funds to further develop the platform, build a marketing team as well as filing for an intellectual property patent on their unique “Know your Network” methodology.
Economic and financial crime are growing across the globe. In the UK, economic crime costs the government and UK taxpayers billions of pounds per year. Know your customer (KYC) policies were implemented across financial institutions to tackle this problem. KYC processes take place when a bank or financial institution onboards a new client and are aimed at assessing the level of potential risk the customer could pose. The goal prevent banks from storing money resulting from criminal activity, including mob activity, terrorism or drug trafficking. However, the globalisation of financial crime means that it rarely involves only one individual or company, which is why knowing not only your client but also their network has become increasingly important for financial institutions across the world.
Schwarzthal Tech’s know your network (KYN) methodology introduces a multi-dimensional and comprehensive view of a clients’ connections to give financial institutions a holistic risk assessment. It’s AI-driven platform aims to provide better and faster tools for investigators and compliance professionals and to democratise the fight against financial crime. The platform’s advanced technology uses algorithms to enable users to assess potential customers’ connections with criminal or suspicious networks and perform in depth assessment.
Schwarzthal Tech’s platform gathers publicly available information in different languages across databases globally – political exposure and sanctions list, company registries, social media, etc. – to build an individual’s network and create a visual presentation of the network to present to the customer. Users are then able to assess potential customers’ connections with criminal or suspicious networks and perform in depth assessment. Furthermore, the platform’s AI is trained to connect information found on databases, media and other public sources to establish connections on an ongoing basis and keep the networks updated.
Schwarzthal Tech is the brainchild of Marius-Cristian Frunza, renowned expert and author of various books on the topic, including: Introduction to the Theories and Varieties of Modern Crime in Financial Markets, Solving Modern Crime in Financial Markets, Value Added Tax Fraud). Marius-Cristian played a key advisory role during the production of Netflix documentary Lords of Scam (2021) – about the rise and fall of scammers who defrauded the EU carbon quota system and made millions in the process -, where he is also interviewed as a financial crime expert. Marius-Cristian came up with the idea for Schwarzthal Tech after witnessing first-hand how organised crime networks infiltrated and abused the carbon emissions market in the 2000s, as a result of which tens of billions of dollars fell into the hands of transnational organised crime.
Marius-Cristian Frunza, CEO and co-founder of Schwarzthal Tech: We are very excited about working with SFC Capital to further our mission to democratise financial crime globally. It is no longer enough to look at individuals as isolated entities: they are connected to complex networks of people and companies across the world that make it difficult to find criminal activities. Schwarzthal Tech’s platform will help expose connections to criminal rings, corruption and illegal activities and prevent money laundering and fraud from potential individuals.
Ed Stevenson, Investment Manager at SFC Capital: Financial crime is becoming increasingly sophisticated and difficult to fight. The work Schwarzthal Tech is doing is already helping tackle financial crime and we are proud to be a partner on their journey. Marius-Cristian’s vast knowledge on the subject and incredible experience in financial crime research puts the company a step ahead of others in the sector: he already knows what needs to be done.