In August 2025, ThetaRay completed an independent validation of its AML Transaction Monitoring and OFAC Screening Modules with the support of Kaufman Rossin. This validation confirms that ThetaRay’s AI models meet the governance, transparency, and capabilities regulators require from AI-powered compliance systems.

Given recent regulatory trends in the US, where FinCEN is proposing to modernize the Bank Secrecy Act, focusing on dynamic, risk-based compliance programs and enhanced oversight of third-party models, and considering EU mandates under the AI Act for financial services applications, which cover transparency, human oversight, and lifecycle monitoring, independent validation of AI models for sanctions screening, transaction monitoring, and Know Your Customer (KYC) is crucial.

Benefits to Financial Institutions

This announcement from ThetaRay will benefit financial institutions in several ways:

• Audit-ready assurance, enabling banks and fintech companies to provide regulators and auditors with independent validation of their technology vendor’s AI model;
• Efficient adoption, as third-party validation can help compliance and risk committees approve AI solutions faster, reducing procurement timelines;
• Regulatory compliance, ensuring that AI systems for transaction monitoring, sanctions, and KYC meet US supervisory guidance and EU AI Act standards;
• The ability to launch AI with confidence, knowing it has been tested against model risk standards and is designed to adapt to new regulatory requirements and typologies.

ThetaRay plans to extend third-party validation to more modules, improve validation cycles regularly, and scale assurance frameworks into additional jurisdictions. This ensures its AI platform remains aligned with worldwide standards. ThetaRay’s representatives highlighted that responsible deployment of AI involves not only optimizing the systems but also independently validating them, as regulators demand this assurance.

Kaufman Rossin noted that their review confirmed ThetaRay’s AML and OFAC modules meet expectations for accuracy, transparency, and governance, underscoring the need for accountability and oversight in using AI for financial crime compliance.