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Flagright secures $4.3m to enhance AI-native AML solutions in FinTech

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Flagright, an AI-native AML compliance platform, has announced the successful closure of a $4.3m seed funding round.

This financial boost aims to propel the development of Flagright’s solutions and support its international expansion. The funding round was spearheaded by Frontline Ventures and included investments from a group of distinguished angel investors.

The company specializes in utilizing AI to tackle financial crimes, a critical need in today’s tech-driven financial landscape. Historically, financial institutions have faced challenges such as the notorious $25m fraud incident in Hong Kong, involving deepfake technology. Such incidents underscore the growing sophistication of financial fraud, which increasingly involves AI technologies. Reports indicate that in 2023, deepfake usage in FinTech surged by 700%.

Flagright was founded in 2022 by Baran Ozkan and Madhu Nadig after they identified a gap in the market for effective, efficient, and high-quality financial compliance services. The founders aimed to create a solution robust enough to meet their own high standards as consumers. The platform initially focused on real-time transaction monitoring but has since evolved into a comprehensive suite of AML compliance tools, thanks to advancements in AI and machine learning language models (LLMs).

Today, Flagright offers an innovative ecosystem that includes dynamic risk scoring, automated case management, real-time transaction monitoring, and AML screening. It boasts integration with top-tier data providers like LSEG and Dow Jones, ensuring its compliance capabilities are second to none. The platform is renowned for its banking-grade reliability, delivering 99.99% uptime and real-time data processing in under 700ms. According to user feedback, Flagright has significantly reduced false positives by 93% and decreased manual monitoring efforts by 87%.

With the new funds, Flagright is set to further accelerate its product innovation and global expansion. The company is also introducing a new product family, AI Forensics, which aims to revolutionize compliance workflows in screening, monitoring, governance, and quality assurance. The AI Forensics for Screening tool has already shown promising results, reducing false positives by 93% and cutting down alert investigation times by 80%.

Flagright CEO Baran Ozkan expressed enthusiasm about the funding, stating, “This investment not only validates our vision but also equips us to scale new heights in AI-powered compliance solutions.”

Previously, Flagright had garnered support from influential investors like Y Combinator, Pioneer Fund, and Moonfire Ventures, who have reaffirmed their confidence in the company’s direction by contributing to the latest funding round.

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