- Satheesh Kumar Paddolker, Dr. Rajiv Kaushik- Singapore- NA- 5- Fintech- NAFraudsters take advantage of the loopholes in an organisation's processes to slip through. But, when you apply a technology that has no holes and cannot be altered you get the means to block out all fraudsters.Kratos Innovation Labs is a fintech startup that wants to save banks millions of dollars by employing their simple solution. The founders Satheesh Kumar Paddolker and Rajiv Kaushik have conceptualised and designed a product called x-DeFraud which they plan to launch soon in the market.The founders assure that the solution will help in saving the financial institutions millions of dollars. "The idea is fraud prevention and save millions of dollars instead of spending more for fraud detection," says Paddolker.Without revealing too much about the solution for which the company is in the patent approval stage, co founder Kaushik says that it employs the blockchain technology without asking the banks to share their sensitive information."x-DeFraud detects and prevents fraud by storing all the supporting documents in a trading cycle on a distributed ledger system (Blockchain). With pre-defined algorithms, all the documents flowing in the distributed ledger are x-rayed by x-DeFraud system to prevent fraud. All the participating banks will get access to fraud control in terms of credit history of the person looking to borrow from banks," says Kaushik.The solution removes the need to keep manual checks on the inventory at each step - a process which involves immense scope for human errors.The founders claim to have finalised one major financial institution as their first client and are in talks with three more in different countries to participate in their proof of concept.The trade finance industry is already looking for solutions to prevent fraud and the recent instances (Standard Chartered Bank lost close to $200 million in China in 2014 while Citi lost $400 million in Mexico in the same year) have only spurred the interest of the venture capitalists in startups offering a solution."We have already received interest from 7-8 venture capitalists from India and they are very keen to be a part due to the scope of the problem area. However, more than money we are looking for partners who are well connected with the financial institutions of the world," claims Kaushik.The founders are keen to use the 'ease of using' feature as one of the best factors of the solution given the considerable workflow in financial institutions. "This will become an intrinsic part of any bank's current blockchain initiative to ensure that this does not disrupt or add to the current workflow of these institutions.The solution, assures Kaushik, will also help in improving the credit rating of the banks by preventing fraud and keeping their book keeping transparent.The startup has simultaneously applied for patent approval in seven major geographies. The revenue model will vary from institution to institution and will either be pay per use or chargeable as a percentage of potential fraud prevention.Regulatory differences across geographies and constraints put by regulators regarding sharing transactional information have been a blessing to the fraudsters but the founders assure that x-DeFraud plugs these gaps without compromising the compliance obligations of the financial institutions.