The Internet of Things may herald a new age of information sharing and automation, but it can also facilitate misdeeds like money laundering and terrorism.

Fortunately, new cyber threats are spawning new cyber weapons against them, some of which are being developed in Singapore.

The Republic not only supports local start-ups in this sector, but also attracts those overseas to set up shop to develop such software.

One of them, Israeli firm ThetaRay, is planning to hire Singaporeans for its new technical office here over the next few months.

"Singapore is very supportive of start-ups, and people there have an awareness of big data and cyber security," ThetaRay chief executive Mark Gazit told The Straits Times at an Industrial Internet conference organised by General Electric in San Francisco last week.

ThetaRay, which was founded in 2013 and set up a Singapore office earlier this year, has clients around the world, including some Singapore banks. He declined to reveal who they were.

ThetaRay specialises in detecting abnormal behaviour - whether in bank transactions or jet engines - by measuring a large number of variables and looking for abnormal relationships between them.

Over time, as a huge number of measurements are accumulated and analysed, the computer learns how to automatically detect events that deviate from the norm.

Unfortunately, the sheer number of variables - up to 2,000 at a time, measuring every detail of the system's behaviour - and the sheer number of, say, bank transactions in a day is too much even for a supercomputer to handle.

This is where Mr Gazit's team comes in: it has figured out how to do it in a matter of microseconds using normal computers.

Their method exploits a principle similar to the kinetic theory of gases. Instead of trying to track every molecule or variable, it examines the collective behaviour of the system just as one measures the volume, temperature and pressure of a gas, to detect abnormalities.

Mr Gazit said this method can identify five to six times more anomalies with an error rate 100 times lower, and in a much shorter time, than standard machine-learning methods.

It is useful in financial institutions, where existing methods for detecting money laundering get it wrong much of the time, putting a strain on the regulatory system with false alarms, said Mr Gazit.

"Machines and data are enabling humans to be much more effective in finding the needle in the haystack, finding the next terrorist. In fact we are looking for a needle in a needle stack, which is even harder," said Mr Gazit.

Such is the challenge for another start-up, Singapore-based Apvera, which recently secured $1.7 million from Spring Singapore, global investment firm ACP and other investors to improve its threat detection software, Insight 360.

The software aims to collect real- time data on activities in and outside an organisation which it analyses for an overview of its security situation in real time. It can warn of potential threats to digital data such as intellectual property and client information.

Apvera said signature-based methods of threat detection - like virus scanners that search for known threats by their identity or "signature" - are no longer enough.

"Thanks to the support we have received from government organisations such as Spring, Singapore is the perfect location for us to build our business and expand it to new clients - not just in Asean but also globally," said Apvera chief executive Eric Meyer.

Meanwhile, ThetaRay continues to look towards global applications for its technology, too.

The company is one of 270 partners developing applications for Predix, a universal cloud-based industrial operating system introduced by industrial conglomerate General Electric (GE) in February last year.

Predix, which can be customised to a company's specific needs, analyses industrial data for everything from improving efficiency to predicting and correcting equipment failures before they happen.

Mr Ganesan Ramu, head of partner and customer engineering at GE Digital, told The Straits Times at GE's Minds + Machines conference in San Francisco on Nov 15: "GE supports start-ups through collaboration or financial support or both. About 10 start-ups currently have their products available through Predix."

Last month, Minister for Communications and Information Yaacob Ibrahim announced an investment of $10 million by Singapore in the Asean Cyber Capacity Programme, while StarHub and its partners will spend $200 million over the next five years to support Singapore's cyber security sector.

And back in 2014, the National Research Foundation awarded $42 million in grants for seven projects under its National Cybersecurity R&D Programme.