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BusinessKarza Technologies helping banks to address financial frauds

Karza Technologies helping banks to address financial frauds

Published: 5th Aug 2021 7:35 pm | Updated: 6th Aug 2021 5:29 pm

Hyderabad: Karza Technologies, which developed and offers 350 application programming interfaces as web applications and microservices, is helping banks, financial institutions and payment platforms to digitise their operations, monitor transactions and mitigate risks.

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The company is looking to further enhance its existing portfolio as well as introduce new solutions to address identity and account takeover risks. The company plans to expand its presence to Southeast Asia and South America while strengthening its base in India, according to a top official.

The company focuses on onboarding verifications, risk mitigation, due diligence, investigations, shell entity identification, and corporate governance across banking, payments and insurance sectors. It also takes up due diligence to meet governing standards for Know Your Customer, Anti-Money Laundering, and obligations of regulated entities under Prevention of Money Laundering Act.

With integrated intelligence on over 20 million entities from more than 850 sources, Karza has helped avert frauds worth Rs 2,500 crore so far. It has been appointed by Indian banks and financial institutions to obtain information on any kind of negative screening, financial intelligence, ownership information, network mapping, entity profile and statutory information.

Omkar Shirhatti, co-founder & CEO, Karza Technologies, told Telangana Today, “The two primary reasons for loan frauds are falsification of documents through document tampering, forgery, fake identity or KYC, and promoter diversion of funds into ‘related’ parties. Banking, which has been largely manual, has seen massive digitisation in onboarding and we realised there was a need to automate the process and deliver intelligence to banks and NBFCs, without compromising on risk management. We are also helping payment platforms for merchant onboarding, validation and risk assessment.”

“We deliver an on-boarding suite of services, verification of channels, cross-validation of data, thorough risk-assessment models to understand the behaviour of users and underwriting and due diligence suite for SMEs. We have built a network graph to understand relationships with undisclosed related parties to identify hidden risks,” he added.

The company uses big data engineering to track negative information and news on defaulters from various documents and establish reliable linkages. It has built a name and address similarity algorithm to stitch together alerts and lists.

Shell companies

Shirhatti added, “We are working on a shell entity index score that we will roll out in a couple of months that will help distinguish genuine companies from those that are created for pure-play money laundering, benami or invoice hawala activity. Today, we are able to detect up to 85 per cent and we will launch it once we reach upwards of 95-97 per cent.”

Karza has also identified a cluster of 30,000-35,000 directors who have been associated with several shell companies. In 2010, such directors floated around 8,200 companies in a single month. This number went down to over 6,000 companies in a month in 2012. The number tends to be reducing. These directors create anywhere between 800 and 900 companies in a month now. Karza is constantly interacting with several government departments to track the shell companies.


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