A Practical Intelligence Strategy for Regulatory-Grade Fraud & AML Controls
Built for Modern Financial Services. Designed for Change.
Loci is a fraud and risk intelligence platform built on hybrid AI and symbolic reasoning.
It combines statistical signals, graph intelligence, and deterministic rule evaluation to produce explainable, auditable fraud decisions in real time.
At its core, Loci enables financial institutions to implement baseline regulatory-grade controls that scale across channels — without introducing operational complexity.
The Reality Financial Institutions Face
Fraud and AML controls don't fail because teams lack rules. They fail because intelligence is fragmented. Events live in logs, account state lives in profiles, and transactions are evaluated in isolation. Controls grow brittle as the business scales.
The result: slow reaction time, hard-to-explain decisions, and high operational overhead. What's needed is not more rules, but a clearer way to reason about risk.
A Recommended Intelligence Pattern
Across modern financial systems, an effective and regulator-aligned pattern has emerged: separate what happens from what is known, then bring them together at decision time. Loci is built to support this pattern natively through two complementary layers that power a single, coherent decision.
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Layer 1: Event Stream Intelligence
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Layer 2: State Snapshot Intelligence
Together, they power a single, coherent decision.
Layer 1: Event Stream Intelligence
Understanding recent behavior.
This layer captures discrete events as they occur, across channels.
Examples include:
- Authentication activity
- Credential or configuration changes
- Beneficiary and payee actions
- Registration and onboarding signals
Event streams answer questions like:
- What just happened?
- How often?
- In what sequence?
This enables:
- Velocity and burst detection
- Temporal correlation (events leading into transactions)
- Cross-channel context without coupling systems
Event intelligence is behavioral, time-bound, and dynamic.
Layer 2: State Snapshot Intelligence
Understanding baseline truth.
This layer captures what is currently known about an account or entity.
Examples include:
- Account lifecycle state (new, active, dormant)
- Known or trusted devices
- Typical locations or corridors
- Entity-specific thresholds and limits
State snapshots answer questions like:
- Who is this account today?
- What is normal for them?
- What constraints apply right now?
State intelligence is stable, deterministic, and explainable.
Why This Separation Matters
Events explain why something looks risky. State explains whether it should be risky. Together, they produce decisions that are easier to explain, easier to audit, and easier to evolve. This mirrors how regulators reason and how experienced risk teams think.
FLM: Composable Intelligence
On Loci, this pattern is expressed through Fraud Language Models (FLM). FLMs are composite, declarative models that combine event patterns and state conditions, incorporate statistical deviation and thresholds, and leverage network and graph-based signals.
Each FLM can reason across time, behavior, and baseline context without hard-coded logic or brittle dependencies. This makes intelligence composable, not monolithic.
What This Enables:
Using this approach, institutions can express controls such as:
- Dormant-to-active risk patterns
- High-velocity behavior following sensitive events
- Threshold breaches conditioned on lifecycle state
- Structuring and layering activity over time
- Pass-through and mule-like behavior
All with clear lineage and rationale.
Flexible by Design
This is not a one-size-fits-all framework. Organizations choose how often state is refreshed, events can be ingested in real time or near real time, and FLMs can be layered, tuned, or retired independently. Loci provides the infrastructure, not rigid prescriptions.
The Outcome
By aligning event intelligence with state intelligence, Loci helps organizations achieve regulatory-grade controls without bespoke pipelines, explainability without slowing decisions, adaptability without scaling headcount, and confidence across fraud, AML, and compliance teams.
This is how compliance becomes operationally lightweight and intelligence becomes accessible to everyone.
Take away
The future of fraud and AML defense isn't about accumulating more rules or deploying black-box AI. More teams are employing intelligence systems that are transparent, adaptable, and operationally sustainable; this is the way forward.
Financial institutions need controls that can explain themselves to regulators, evolve with emerging threats, and scale without adding complexity. Loci provides the foundation to make this standard practice, not an aspiration.
About Loci:
Loci is the intelligence infrastructure for modern finance. Loci is empowering every Defender, Analyst, and Enterprise system to operate with confidence, clarity, and adaptive insight. With Loci, everyone becomes intelligent, and the business achieves compliance without complexity.
Website & Demo
runloci.com | [email protected]