The Trailblazers: Introducing Shield
Center-stage startups may soon become gamechangers, but their journey may already contain a valuable lesson for us all
Innovation Spotlight
Shield helps people and organizations turn compliance into a competitive edge; moreover, it has revolutionized financial compliance. Startup founders CEO, Shiran Weitzman, CTO, Ofir Shabtai and CBO, Eram Noam explain:
“Shield is a modern, agile, hybrid-cloud solution that enables organizations across highly regulated industries to ‘read between the lines’. It allows compliance teams to easily monitor all communication channels, such as Teams, WhatsApp and Zoom, from a single platform. Our end-to-end platform, equipped with extensive protection and transparency, offers greater flexibility, visibility, and control of alerts or triggers, especially when they could contain sensitive and confidential data.”
Center-stage startups may soon become game-changers. On their way to the top, they can provide … [+] valuable lessons for other entrepreneurs
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The platform reduces the typical 99.99% false-positive rate by 97% with a 90% relevancy rate. It also utilizes natural language processing and machine learning capabilities to enrich relevant data, providing a comprehensive market abuse detection solution that extracts business insights, increases the efficiency of operations, and provides a competitive edge.
Shield was founded in 2018 in Israel; a UK branch was established later on. In 2022, Shield launched its U.S operations and opened an R&D facility in Lisbon, Portugal. The company has over 100 employees across the globe.
Where did the idea come from?
“The introduction of Basel III, Dodd Frank, MiFID II, MAR and many other regulations led global banks and financial institutions into a competition for compliance. As financial regulations were increasingly introduced across the globe, we recognized an opportunity to develop a cutting-edge platform — built around artificial intelligence (AI), machine learning and other advanced technologies — that could replace the outdated legacy vendors who were dominating the market. Banks and financial institutions were becoming more reliant on electronic communication channels like Slack, Zoom and WhatsApp, (a rising trend due to the pandemic and today’s work-from-home environment), and we wanted to enable compliance teams in financial services and other highly regulated industries to access their employee communications, and provide them the insights they needed to stay ahead of market abuse, internal bad actors, and regulatory risks that were until now, largely invisible.”
What capital have you raised so far?
“After impressively bootstrapping ourselves since our launch, we kicked off 2022 by announcing a $15 million Series A funding round in January and wrapped up the year by announcing a $20 million Series B capital raise in December.”
What were the first steps you took to realize your idea?
“Our award-winning communication compliance platform started with the simple belief that there is a better way to address compliance. Before founding Shield, Shiran was the owner of his own consultancy firm, and one particular client project inspired him to find a better solution so that banks could stay compliant across electronic communication.
Involving one of Europe’s leading banks, the project dealt with a specific challenge in communication compliance. It took over two years to solve the problem, required multiple platforms, and ended up costing the bank millions of dollars. It was then that Shiran, being an entrepreneur at heart, realized that this was a market failure that he could solve.
“As AI capabilities continue to develop, we expect to see further automation of monotonous processes … [+] across industries and use cases.”
Eric Sultan
Banks and their customers were becoming reliant on personal devices and messaging applications beyond email to conduct every-day business. Shiran understood that there was an immediate need for an end-to-end communication compliance platform to mitigate risk and prevent nefarious behavior from going unchecked. Then the pandemic hit; everybody started working from home and needed Zoom to accomplish any kind of business. This new work mode only accelerated an already rising trend in finance.”
What would you say is your wow factor?
“Too many organizations are struggling with compliance because the insights they need in order to stay ahead of market abuse, internal bad actors, and increasing regulatory risk are invisible to them. Their outdated systems aren’t able to keep up with all the false positives and the sheer volume of data that needs monitoring. We enable them to “see more, know more, solve more” through AI/ML, which models human behavior and generates relevant alerts that add critical context and inform decisions.”
How are you changing your customers’ bottom line?
“Today, financial organizations really need to see everything – and that’s just not happening. Right now, they’re monitoring seven different channels with seven different tools, none of which communicate with each other, and none of which cover WhatsApp or voice communications. All these different portals and workflows have compliance teams running in circles. And things are still falling through the cracks. They don’t have a “needle in a haystack” problem. They have a ‘’lot of different needles in a lot of different haystacks” problem – with no way to see what’s really there.
Compliance teams are more informed thanks to our modern, agile solution, which enables easy monitoring and analysis of all communication channels. Financial organizations can be proactive instead of reactive with AI/ML because it uncovers insights contained in vast amounts of unstructured data.”
What was your turning point?
“Over the past two years, since the pandemic hit, there has been a sharp annual rise of nearly $50 billion in financial crime compliance costs, making our solution vital to today’s business environment. The pandemic caused a proliferation of electronic communication apps like WhatsApp, Zoom and more, creating massive data, risk, and compliance challenges for regulated enterprises, including regulator investigations and the threat of massive fines. We were able to address evolving compliance concerns through a modern, tech-driven approach suited to today’s economy.”
What mistakes would you say you’ve made along the way?
“Like many startups, our number one weakness is that we’re not big enough. We’ve had to scale quickly and continuously prove ourselves, which has led to some gaps in service offerings. However, our venture funding and impressive customers are proof of the robustness of our platform.”
What did you not know about the market or about operating a startup that you can now teach others?
“The challenges of bootstrapping, and how hard it is to fund a business for more than two years before raising investor capital.”
What were the game changers along the way?
“The pandemic increased the reliance of global businesses on electronic communication channels, however, because we already understood the crucial role these channels play in the modern workplace, we were able to shape our solution so that it addressed inherent security, risk and compliance concerns.”
Marketing strategy: how did you pave the path to your clients?
“Since we were bootstrapped for so long, we really took on guerilla tactics when it came to marketing. At one point, we even sent out hand-written letters to prospective customers, which actually led to a couple of introductory calls. We don’t have a B2B or B2C approach; instead, we adopt a human-2-human approach, which we think resonates and allows us to stand out. In our early days, we spent close to nothing on marketing; however, as we’ve grown, our approach has changed. We focus on maintaining a social media presence, event attendance, media relations, and much more.”
Where will you be in a year from now?
“After raising a total of $35 million through two capital raises in 2022, we will continue to address the surging demand for an AI-driven communications compliance platform by further expanding our markets.”
What will the industry look like 5/10 years from now?
“As AI capabilities continue to develop, we expect to see further automation of monotonous processes across industries and use cases.”
