Silent Eight, a Singapore-based financial crime prevention firm, announced yesterday that it had raised $40M in Series B funding. HSBC and Standard Charter’s venture wings were listed as investors.

Why should we care?
Using machine learning to identify financial crimes, Silent Eight fulfils a growing need for financial institutions. The growth in fintech-based scams—like those facing Zelle—and other illegal schemes has brought sizeable fines against banks for insufficient security protocols as well as collaboration with shady entities. In 2020, 28 financial institutions across 14 countries received $6.8B in compliance violation fines. The largest was a $900M fine brought against Australian bank Westpac for failing to report 19 million international transactions. These enforcement measures explain why financial institutions like HSBC, which is a Silent Eight customer, and Standard Charter have invested in the Singapore-based firm. Both banks seek to minimize their exposure to major financial crimes, while also demonstrating their investment—both symbolically and financially—in compliance measures. If scams and financial crimes continue to proliferate, then we may see compliance and security as product differentiators marketed more aggressively by banks to set them apart from competitors.