Luis Pinedo departed Santander after nearly 16 years to take a new position with fintech ThetaRay, aiming to lead the banking industry into the AI future of financial crime compliance.

ThetaRay appointed Pinedo as chief strategic customers officer, the company announced last week. Pinedo was most recently group vice president of compliance at Santander, where he led the bank’s global financial crime compliance (FCC) transformation across operating models, processes and technology platforms.

“The main challenge that you have … in finance and crime compliance in a bank is how you can make sure that you are able to [identify] particular behaviors that are related to something that could be suspicious,” Pinedo told FinAi News.

To detect fraud and money laundering, systems must analyze substantial amounts of data — including a customer’s payment history, details about the account receiving the money, government alerts and more — and cross-reference that data to determine if the activity is suspicious. AI can do this faster and more efficiently than rule-based legacy systems and human workers, Pinedo said.

ThetaRay’s agentic AI investigation platform, named Ray, has been implemented by many FIs, including:

• ClearBank;
• Mashreq Bank;
• Online payment platform Payoneer; and
• Santander.

Ray annually monitors more than $20 trillion in transactions, ThetaRay Chief Executive Brad Levy said in a July 7 release.

Pinedo stressed that an effective FCC system balances effectiveness and manageable alert volumes.

“Most other vendors are running based on rules, meaning that if A plus B is equal to C, or greater than C, then you get an alert,” Pinedo said. “ThetaRay is not following this approach, it’s [using] artificial intelligence. … The number of alerts is even much less than we were seeing in the past with the rule-based system.”

In an interview with FinAi News, Pinedo discussed how FIs need to embrace AI for FCC and how he will help them do so. What follows is an edited version of that conversation:

FinAi News: How are you going to draw on your 16 years with Santander in your new role?

Luis Pinedo: The main responsibilities that I’m going to have are, on one hand, to define the strategy of the product. Already it is interesting to see someone that is coming from the [banking] industry, [who can answer]: What are the kinds of expectations that the banks have in terms of these kinds of new tools?

The other part … is basically to be the one connecting with the customers — and particularly the big customers. The idea is to help those customers [move] from legacy compliance models to the new kinds of models that we have. The idea of ThetaRay was, “let’s bring someone that would speak the language of our customers.”

I was there [at Santander] for 16 years, so any time that I’m speaking with the banks, with our customers, I understand them very well — because I was sitting in the second line of defense of Santander globally.

FinAi News: What challenges do you foresee for crime compliance in the banking sector and how do you and ThetaRay plan to tackle them?

LP: It’s to explain better how artificial intelligence could be a gamechanger.

Explainability, governance, model validation, traceability — all these concepts are very important. … It’s very important for us to eliminate the fears of artificial intelligence, which, by the way, are quite reasonable.

I’m working a lot in the first days to be super transparent with the industry about the tool … and also the implementation. It is [helping] our customers to see in risk language, not in technical language, that our solution is something they should [embrace] for crime compliance.

FinAi News: In terms of crime compliance, what is the next evolutionary step for the banking industry?

LP: The use of artificial intelligence is something that is going to be the biggest [turning point] for the industry. We need to modernize our defenses as quickly as possible because the criminals are using the latest technology in order to avoid our controls, the banking industry’s controls.

The use of artificial intelligence [in FCC] is giving you effectiveness and efficiency. But, once again, we need to have people within the FIs who really understand how this kind of system works.

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