This system is tackling Indonesia’s $422m payment fraud

This article is a part of Startup Spotlight, a series that features young, up-and-coming startups.

Image credit: Timmy Loen

After building real-time fraud detection systems at fintechs like GoCardless, OVO, and Shopee, Brian Lee saw a recurring gap. Financial institutions were adopting faster payments, but their fraud prevention tools remained slow and cumbersome. He founded Sokratech to build a platform that allows risk teams to keep pace with both threats and regulators.

😟 Problem

Real-time payment systems in Indonesia, like BI-Fast and QRIS, have seen explosive growth of 53% and 213%, respectively.

However, the fraud detection systems at most banks still operate in batches, creating a critical delay. This mismatch allows fraud and money laundering to flourish, with digital scam losses in the country reaching US$422 million last year.

Regulators are now enforcing change. Bank Indonesia and OJK (Financial Services Authority of Indonesia) now mandate that all financial institutions implement real-time fraud detection and anti-money laundering (AML) monitoring. Existing solutions from legacy vendors are often too expensive and can take over a year to deploy, making them unsuitable for many local banks and fintechs.

💡 Solution

Sokratech provides a real-time fraud and AML monitoring platform for financial institutions. When a transaction occurs, its API returns an approve, review, or reject decision in under 100 milliseconds.

The platform is designed so compliance teams can manage it directly, without relying on engineers. It can also be deployed on-premise for institutions with strict data residency requirements. Key features include:

• No-code rule engine: A drag-and-drop interface allows compliance staff to build, test, and deploy fraud detection rules in minutes.
• AI-powered recommendations: The platform suggests optimal rules and thresholds based on an institution’s actual transaction data.
• Backtesting and simulation: Teams can test new rules against historical data to see their potential impact before going live.
• Real-time behavioral profiles: The system builds a profile of normal behavior for each customer and instantly flags deviations.

Photo credit: Sokratech

📊 Market size

The global fraud detection market is projected to reach US$32 billion by 2025, with Asia-Pacific being the fastest-growing region.

In Indonesia, new regulations are forcing mandatory adoption across about 105 commercial banks, over 100 payment providers, and crypto exchanges. Sokratech targets these institutions, as well as an estimated 500 mid-tier financial companies across Southeast Asia that need affordable, fast-to-deploy solutions.

🤝 Team

Brian Lee. CEO and founder. Previously worked as a fintech data scientist at Shopee for over six years.

🚀 Traction 

🏆 Competition

💰 Financials