Israel technology firm ThetaRay will license a financial crime detection tool that monitors transactions for correspondent banking to Emirati bank Mashreq, the companies said on Monday.
It is ThetaRay's first direct licensing agreement with a bank from the United Arab Emirates, Chief Executive Mark Gazit said, declining to disclose the annual fee.
The Israeli-developed tool uses artificial intelligence to identify financial cyber threats like money laundering or fraud so users can take action against suspicious transactions.
"It's almost like a scanning machine," Gazit told Reuters.
Dubai-headquartered Mashreq, which in the past has paid penalties for violating US sanctions, said the solution allowed banks to "effectively thwart financial crime risks in the increasingly complex space of cross-border payments."
The UAE, the Middle East's financial and trading hub, has in recent years tightened banking and financial regulations - and urged banks to increase anti-money laundering efforts - to tackle a perception it is a hot spot for illicit money.
ThetaRay's Gazit said he hoped the Mashreq deal would pave the way for more contracts in the UAE and other Arab countries.
Israel and the UAE in 2020 established ties under a US-brokered deal that expanded to Bahrain, Morocco and Sudan.
Gazit also said the company planned to remain private in the near term and could soon raise on the "higher side" of tens of millions of dollars to help it expand and build capacity.