Data Sutram Raises $9 Million to Enhance Fraud Prevention and Regulatory Compliance
Published by Economic Times
Introduction to Data Sutram
Data Sutram, a Mumbai-based fintech startup, has successfully raised $9 million through a combination of primary and secondary funding. The company specializes in helping financial institutions slow down fraud and ensure regulatory compliance, addressing critical challenges faced by banks and lenders today.
Funds Utilization and Expansion Plans
According to Rajit Bhattacharya, founder and managing director, the funds will be directed towards expanding the team, enhancing product capacity, and accelerating the development of their artificial intelligence (AI)-driven platform. Data Sutram also aims to break into other sectors, including cryptocurrency, real-time payments, e-commerce, fast trade, and insurance.
Rising Importance of Fraud Prevention
Bhattacharya highlighted that recent trends show a significant surge in fraud within the banking and financial sectors, largely driven by the digitization wave and the increasing issuance of loans. The rise in digital transactions and account openings has opened new avenues for fraudulent activities.
A Comprehensive Approach to Identity Verification
To combat these challenges, Data Sutram is focused on building a holistic understanding of identities. The startup collaborates with some of the leading banks in India to implement innovative solutions aimed at mitigating fraud risks. This process has been a valuable learning experience, contributing to the maturity of their products.
Innovative Use of AI in Financial Services
Founded in 2018, Data Sutram leverages AI and external data from over 250 sources to assist companies in reducing payment and insurance fraud, as well as managing cybersecurity risks. Their proprietary trust score analyzes millions of digital footprints to identify various fraud models, including identity theft and synthetic identities.
Collaboration with Major Financial Institutions
The company has established partnerships with prominent financial institutions in India, including HDFC Bank, Axis Bank, IndusInd Bank, Union Bank of India, PIRAMAL Finance, and L&T Finance. These collaborations help bolster their efforts in enhancing security and trust within digital finance.
Future Prospects and Recent Funding
In a recent funding round in 2023, Data Sutram secured $3 million led by Bharat Fund, with participation from other investors such as Singularity Growth Fund and IIFL. Such investments are key for the company to adapt to the evolving challenges of fraud prevention and regulatory compliance in India and similar emerging markets.