Financial institutions embrace AI to tackle money laundering

There are further indications that financial institutions are increasingly teaming-up with technology firms to boost their financial crime fighting capacity by the use of artificial intelligence (AI).

In April, big data start-up Quantexa announced that following a successful pilot, its technology is supporting HSBC with the bank’s work to combat money laundering.

HSBC will integrate Quantexa technology into its systems this year. The technology will allow HSBC to spot potential money laundering activity by analysing internal, publicly available, and transactional data within a customer’s wider network.

The deployment of the technology follows a pilot of the software with HSBC in 2017 and will see the global bank and data start-up work together to better detect potentially illegal activity in its broader context, helping the bank fulfil its regulatory responsibilities and provide better understanding of the overall risk.

In a similar development, Crèdit Andorrà Financial Group says it has selected NICE Actimize to strengthen its anti-money laundering (AML) solutions strategy.

The bank will integrate a suite of NICE Actimize AML solutions into its financial crime operations to more effectively address AML regulations.

Crèdit Andorrà says it has chosen the technology firm’s Suspicious Activity Monitoring, Customer Due Diligence (CDD) and Watchlist Filtering solutions because of NICE Actimize's continued investment and commitment to AML technologies, including intelligent automation and machine learning capabilities.

NICE Actimize's functionality for CDD supports the complete lifecycle assessment and re-assessment of customer risk as part of Know Your Customer regulatory requirements including complex beneficial ownership structures, the bank said.

The move by both banks follow recent developments in RBS and OCBC Bank which have also turned to FinTech to guide their suspicious activity reports and AML work.

In November last year, OCBC said that it became the first Singapore bank to tap AI and machine learning to combat financial crime.  The bank partnered with Fintech firm, Thetaray, to use its AI solution to identify potential suspicious transactions.

OCBC says the solution has reduced the volume of transactions reviewed by AML compliance analysts by 35 percent, and increased the accuracy rate of identifying suspicious transactions by more than four times.

The bank also says it the first bank in Singapore to establish an AI unit to strategically develop in-house AI capabilities, with an initial investment of $10 million over three years.

Indeed, 82 percent of respondents to KPMG’s Global FinTech Report 2017 said they would increase FinTech partnerships in the next three to five years, while 77 percent expect to adopt blockchain as part of an in-production system or process by 2020.

A key message from the report (available here) was that FinTech and financial services are competing less and coming together, and financial institutions are embracing the disruptive nature of FinTech. It said around 30 percent of large financial institutions are currently investing in AI.

These developments and how they impact upon banks and financial crime will form part of vital discussions at the 2018 International Financial Crime Forum to be held in Kuala Lumpur on July 18 & 19.

Organised by ICC Financial Investigation Bureau (FIB), the meeting will explore topics including Artificial Intelligence solutions in identifying financial crime – highlighting anomalies and irregular patterns, whether they work in a constantly evolving environment, and big data analyses in a post       Facebook world.

Another highlight of the forum is changing technology and its implications on compliance policies. This will cover biometrics and identity verification, removing ‘black’ monies from the economy through demonetisation and Distributed Ledger Technology, among other things.

“The Forum provides delegates the opportunity to gain awareness on the changes being affected due to technological innovations. It is ideal for those from financial sector institutions such as national financial intelligence units, international bank compliance and risk departments, regulators, lawyers, accountancy firms, stock brokers and law enforcement agencies,” FIB says.

To register go to https://www.icc-ccs.org/KL2018
Or Contact: Cyrus Mody (cmody@icc-ccs.org)
ICC Commercial Crime Services
Cinnabar Wharf
26 Wapping High Street
London E1W 1NG United Kingdom
Telephone: +44(0)207 423 6960 Fax: +44(0)207 423 6961 Email: FIB@icc-ccs.org