Summary
Founded in 2021 in Singapore, Transparently.ai’s mission is to bring transparency and trust to global markets using cutting-edge AI technology to detect accounting manipulation and fraud in corporate financial statements.
Transparently.AI's system, the Transparently Risk Engine, uses machine learning and forensic accounting techniques to analyze vast amounts of financial data, providing risk scores, ratings, and comprehensive reports. This enables early detection of malfeasance, often 2-3 years before market awareness.
Financial institutions like pension funds, investment managers, banks, and auditors can leverage Transparently.AI to enhance corporate monitoring, improve investment decisions, and mitigate losses. Auditors can use it for risk evaluation and audit planning, banks for fraud risk monitoring and creditworthiness assessment, and asset managers for stock screening and portfolio risk evaluation.
Validated by use-cases with Big Four auditors, asset managers, regulators, a global bank, and a major sovereign wealth fund, Transparently.AI offers a unique, AI-driven approach to forensic accounting, bridging the gap between traditional research and advanced technology. It is an essential tool for financial institutions seeking to protect against accounting fraud and improve their operations.
Description of fintech solution
The Transparently Risk Engine harvests information from publicly available financial records and applies rigorous forensic analysis to the data in order to identify if a company is manipulating its accounts and is in danger of failure as a result.
Taking learnings from forensic accounting, automated signal detection approaches for financial crime and machine learning, Transparently’s software hunts for the digital DNA likely present in the manipulation of accounts and financial crime.
The TRE produces a 0-100 percent risk score, which measures the probability that a company is manipulating its accounts. It also supplies an A+ to F letter rating, which measures the quality of a company's accounting.
Describe your key innovations
Transparently.AI has built an array of about 200 financial models into the risk engine, which is designed to replicate the investigative activities of forensic accountants, activist short sellers and auditors. The system is designed to identify patterns of behaviour that would never typically be considered by these industry participants.
It is a wholly unique AI-driven process, in which we specifically apply various types of advanced machine-learning techniques to accounting data. It begins with our system ingesting millions of data points from a global data set of publicly available financial records, to which it applies our proprietary models and algorithms to identify high-priority risk factors that can be used as cues for action.
Our proprietary algorithms are designed to account for the diversity within the global company data set. Underpinned by Natural Language Processing, these dynamically weighted algorithms take into account differences that occur between various regions, sectors and market capitalisation tiers.
Alongside these algorithms, our system applies proprietary mathematical and statistical models that detect measures and incentives of manipulation. Our models and algorithms function in a continuous learning loop to promote the accuracy of predictions by our system.
The TRE sifts through and analyses its massive trove of corporate financial data points to deliver a 0-100 percentage score that ranks the probability of a company collapsing as a result of its accounting malfeasance. It details a company’s accounting performance across 14 clusters of accounting characteristics such as asset and income quality, accruals management, gearing and smoothing activity.
Importantly, the system also delivers a letter risk rating (A+ through F), which provides an overall indication of both the absolute and relative risk (compared to region and sector) of issues with accounting quality.
All of this is captured in an automated custom report (up to 50 pages) that also includes information on what to do next, what to investigate, what questions to ask and identify where in the accounts things don’t look quite right.
The TRE produces this report in seconds, which is a fraction of the weeks or months that a team of human analysts would need to produce similar analysis. Thanks to the power of AI and machine learning, we have developed a unique solution that make it possible to routinely, quickly and continuously monitor large portfolios of companies well beyond the capacity of a human analyst.
This system produces highly accurate results of accounting manipulation well before evidence is publicly disclosed, on average, 2-3 years ahead of market awareness.
Solution Lifecycle
Commercialized
Founder's Background
Transparently.AI has two founders: CEO Hamish Macalister and CTO Mauro Sauco.
Hamish is a Regtech/Fintech inventor, and data scientist. He has completed projects in partnership with both private and public (government) entities, is a technical advisor for fintech projects, an international speaker on quantitative finance topics and has, for many years, been an adjunct faculty member with SMU.
Hamish has also been an award-winning quantitative portfolio manager, headed strategy and quant teams at organisations such as Citigroup and Deutsche Bank and held non-exec directorships with companies in the transportation, property and distribution industries. Hamish has a PhD in Finance, a Master's degree in Economics and a Bachelor's degree in Accounting.
Mauro was the Technical Director for the Office of the CTO at Google, for 6 years until April 2023, when he joined Transparently full-time. He is a Cloud Computing expert with more than 20 years designing, building and operating large scale systems. Prior to arriving at Google Mauro worked at IBM, leading the Cloud and Artificial Intelligence teams.
Mauro also served as Vice President of Cloud and Advanced Services at 1-NET MediaCorp and spent 10 years at Amazon.com leading the teams responsible for launching and operating Amazon Web Services in Asia. He is passionate about Artificial Intelligence & Open Source, and has contributed to many open-source projects, including early contributions to the development of Linux.
Founded (Years of Incorporation)
2021
How are you funded today?
Seed
Money Raised
$4 million
Number of employees
15
Presence In Region
ASEAN
Asia
Europe
Global
Oceania
Southeast Asia
Technology
Artificial Intelligence
Cloud solutions
Data automation
Machine Learning
Natural Language Processing (NLP)
Regtech
Risk Assessment
HQ Country
Singapore
What are the top 3 key benefits your solution will bring to the Asset Management Industry?
Fund managers can use our system to:
1. Help them conduct due diligence, as they're vetting companies for investment. They can use our tool to search for any hint of accounting malfeasance hidden within a company's accounting.
2. Generate investment and short-selling ideas. By using our filter tools, asset managers can search for companies with the highest or lowest levels of accounting risk within any market.
3. Evaluate risk within investment portfolios. Asset managers can use our tool to monitor overall exposures to accounting risk within their existing portfolios.
Tell us more about your past client engagements to date and your market penetration?
Customer confidentiality agreements prevent us from revealing specific names, but our biggest customers are:
* A Big Four auditor uses our product as part of its client review and on-boarding process.
* A large global bank uses our system to trigger early investigations in the corporate fraud division.
* Global regulators use our system to monitor for fraud risk in their jurisdictions
* One of the largest pension funds in the APAC region uses our tools as a screening tool for its investments
* A major sovereign wealth fund in Asia had previously used Transparently.AI as part of its screening toolkit for investment due diligence.
Do you have any case studies of your solution? If yes, please share it in less than 200 words
Please refer to this link for a whole case study piece on how Firth Investment Management uses our product as part of its due diligence questionnaire when vetting new stocks to buy.
https://www.transparently.ai/blog/how-one-stock-picker-uses-ai-for-investment-management
Awards/Accolades
Inducted into Google for StartUps Accelerator: AI First (Singapore) in 2024.
Inducted into Franklin Templeton Singapore FinTech Incubator program in 2024.
Marketing Video
