ISRAEL - Detecting Insider Trading and Financial Fraud

Arno Froese

In the wake of serious fraud, exchange rate manipulation, and other scandals at banks and other financial institutions, regulators have increased requirements to monitor and archive digital communications. Firms now need to be able to read and recall online conversations across all media among employees, and between staff and customers, as part of increased efforts to detect and prevent fraud and other crimes.

An average European bank generates more than 200,000 emails and 100,000 chat messages each day, with traders and other professionals talking on numerous platforms.

That makes complying with the growing forest of regulations a mammoth task, says Shiran Weitzman, CEO and co-founder of Shield, an Israel-based startup with a platform that helps financial companies adhere to the stringent rules related to communications and enables them to detect fraud and other nefarious behavior.

Shield offers an answer, helping the firms to meet their regulatory obligations while cutting the mounting costs.

The company, founded in 2018, has won multiple industry awards and, unusually for a startup that already has major customers and a growing revenue stream, is only now turning to investors, including Jerusalem-based OurCrowd, to raise a Series A funding round.

Shield uses natural language processing, artificial intelligence and other data analysis to flag suspicious communications on multiple platforms, while also detecting patterns and archiving relevant information. Shield’s customers include several major banks, and the company has recently signed new partnerships, including a deal with mobile archiver TeleMessage to capture and store WhatsApp and other mobile messages.

Shield is part of the rapidly growing field of regulatory technology, or regtech for short, which is expanding and using new methods to help firms comply with government regulatory requirements meant to reduce fraud and financial crime. The rules are constantly changing, and the costs of compliance are growing, according to Deloitte.

“RegTech is more than a buzzword,” Deloitte reported. “RegTech promises to disrupt the regulatory landscape by providing technologically advanced solutions to the ever-increasing demands of compliance within the financial industry.”

The global market for regtech is growing more than 21% a year, and is expected to reach more than $33 billion by 2026, according to a report from market research firm Facts and Factors.

“The pandemic has created even more communication channels, with people working from home,” Weitzman says. “Employees are talking on Microsoft Teams, WhatsApp, Zoom and everything else. This means firms have an inability to control and review risk in the ways they used to. Compliance officers can no longer stroll the trading floor.”

“There was exponential growth this year, probably several years’ worth. It was happening before COVID, but COVID just expedited it,” Weitzman says. “We see a huge demand for our services now because of this.”

Shield’s technology monitors and archives communications on multiple platforms, allowing employees to conveniently use tools like WhatsApp, text messages and Zoom. The system works partly by using algorithms to identify suspicious or irregular comments, then notifies compliance teams to check them out further., 31 March 2021

Arno's Commentary

This is unprecedented; there is no such thing as learning from history in this case. Welcome to the new age of AI and electronic global control. It is all but impossible to make use of modern communication, whether it’s email, text messages, etc. without being monitored. Now the computer must control the computer: Shield insists it can “flag suspicious communications on multiple platforms.”

Again, Israel is at the forefront, providing services that are effective and, above all, protective.

We believe that this latest step denotes progressive fulfillment of Bible prophecy, with the world’s ultimate goal of having total control of everything and everybody on planet earth.

Arno Froese is the executive director of Midnight Call Ministries and editor-in-chief of the acclaimed prophetic magazines Midnight Call and News From Israel. He has authored a number of well-received books, and has sponsored many prophecy conferences in the U.S., Canada, and Israel. His extensive travels have contributed to his keen insight into Bible prophecy, as he sees it from an international perspective.

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