Silent Eight, a cybersecurity startup leveraging AI to combat fraud, today closed a $15 million funding round. The company says the funds will be used to accelerate current hiring efforts and fuel customer acquisition as it expands to new geographies.
While technologies like embedded chip cards and two-factor authentication have helped reduce financial fraud, the problem remains widespread. According to a report from Javelin, the number of consumers falling victim to identity fraud exceeded 14 million in 2018. At least 3.3 million of those were held partially liable for fraud committed against them, with out-of-pocket costs hitting a record $1.7 billion.
Silent Eight’s platform claims to avert fraud by learning how to conduct investigations from past alerts. It recognizes anomalous behavior by drawing on databases and watchlists and provides a degree of transparency regarding financial decisions.
Silent Eight says its systems can scan structured, semi-structured, and unstructured databases in a range of formats, such as online news articles, screening engines, and case management systems. The company says it can also process petabytes of data to identify potential relationships. For each solved alert, Silent Eight outputs a decision with a summary of supporting evidence and reasoning.
Silent Eight’s platform is in limited release with select customers, including Standard Chartered Bank, which has been using it since December 2018 across over 70 markets in the U.S., the U.K., Singapore, and Hong Kong. But Silent Eight says it plans to publicly launch the platform by the end of 2020. In place of a license fee, the company plans to only charge customers for fraud it helps solve.
This latest funding round — which brings the seven-year-old company’s total raised to over $15 million — was led by SC Ventures (the venture capital arm of Standard Chartered) with participation from existing backers.
“Since the beginning of 2020, Silent Eight has doubled in scale, with more and larger clients added to its roster and a growing pipeline going into Q4,” a spokesperson told VentureBeat. “The company has also successfully built new solutions to help banks to navigate new challenges brought by COVID-19. To address this new dynamic, Silent Eight has launched an on-demand cloud-based AI solution to enable continuous real-time name, entity, and transaction screening.”
The global fraud detection and prevention market is anticipated to reach $23.3 billion this year, according to Grand View Research, and Singapore-based Silent Eight is by no means the only contender. Two years ago, PayPal acquired AI-powered fraud detection startup Simility for $120 million. Sift Science meshes big data and machine learning to spot patterns and detect fake accounts, payment fraud, account takeover, and content abuse. Socure is developing a range of cloud-based identity verification and fraud prevention solutions. Other players include Singapore-based CashShield, Tel Aviv-based Forter, Paris-based Shift Technology, and U.K.-based Featurespace. Pindrop, which is based in Atlanta and counts Google Capital among its investors, is another rival.