Tookitaki raises $26m in Series A funding

Group led by Viola FinTech, SIG Asia behind fund injection, to help lift headcount, fine-tune products

Singapore-based regulatory tech firm Tookitaki has raised US$19.2 million (S$26.2 million) in Series A funding as it seeks to expand its presence in international markets.

The firm received US$11.7 million in investment, adding to the US$7.5 million raised earlier this year.

A group, led by Viola FinTech and SIG Asia Investment, was responsible for the fresh injection of funds, which will help Tookitaki increase its employee headcount across its three offices in Singapore, India and the United States by up to 100 per cent, as well as fine-tune its products.

"Our vision has always been for our compliance technology to become globally accepted by financial institutions around the world, and (the investments) put us in a better place to deliver on that vision," said Tookitaki co-founder and chief executive Abhishek Chatterjee yesterday.

Tookitaki offers two artificial intelligence-powered software platforms.

The first is an anti-money-laundering solution that aims to help banks better monitor and detect suspicious transactions and comply with regulatory requirements.

The second software streamlines an increasingly costly and time-consuming data validation process known as reconciliation, which is used in the finance and accounting sectors, among others.

Tookitaki was co-founded in 2014 by Mr Abhishek and Ms Jeeta Bandopadhyay, who is the firm's chief operating officer.

Mr Abhishek, a former associate at JP Morgan, noticed in the wake of the 2008 global financial crisis that regulators became stricter over financial checks and balances.

At the same time, the volume of digital banking and e-commerce transactions was rising steadily, putting pressure on the rules-based systems traditionally used by banks to detect money laundering, and leading to banks incurring huge fines from regulators.

In the most recent such example, Australia's second-largest bank, Westpac, was accused by the country's financial watchdog last Wednesday of 23 million money-laundering breaches and failing to report more than US$7.5 billion in international transfers over a six-year period.

Each breach carries a maximum penalty of US$14.3 million.

"One problem with the rules-based system is that the bad guys also know the rules and are using it as a not-to-do list. Another is that it tends to produce too many false positives," said Mr Abhishek.

"What we try to do with our machine-learning algorithm is to understand the behaviour of banks' customers, to both learn how to detect new instances of risky transactions and reduce the number of false alerts."

A pilot run by United Overseas Bank last year using Tookitaki's anti-money-laundering technology achieved a 5 per cent increase in true positives and 40 per cent decrease in false positives.

Mr Abhishek said that aside from expanding into the US and Europe, the firm also intends to improve its products by investing in the growth of its research and engineering teams in Singapore and India.

About 60 per cent of Tookitaki's 70 current employees are based in Singapore.

"With the almost 20 years' experience that Viola has in the anti-money-laundering sector, we found Tookitaki's approach to be very unique," said Viola FinTech general partner Tomer Michaeli.

"Its pragmatic way of creating an overlay on top of legacy systems helps increase accuracy and significantly lowers operating costs for financial institutions," he added.