IBM publishes whitepaper on the use of AI in AML compliance

Tech giant IBM has published an extensive whitepaper on the use of artificial intelligence (AI) in anti-money laundering (AML) compliance.

Fighting financial crime with AI  looks at how cognitive solutions are changing the way institutions conduct surveillance and manage AML, financial fraud and compliance.

Systemic threats

The report suggests that fraud and compliance challenges are reaching a critical point against a tide of new regulations that are making AML and know your customer (KYC) compliance increasingly tough.

This means financial institutions across the globe are dealing with systemic threats when it comes to financial crimes including fraud, money laundering and insider trading.

Complex and changeable

As part of their mandated compliance and fraud prevention programmes, financial institutions will have a variety of systems and technologies in place according to the whitepaper.

But it says that with complex and ever-changing fraud and financial crime patterns, these tools lack the ability to quickly and effectively stop criminal incidents.

Higher costs

The authors of the whitepaper say that to remedy this technical failing, financial service organisations have been increasing the amount of human capital to examine AML alerts, investigate potential fraud and monitor for conduct infractions.

However, as transaction levels continue to rise, so will the number of analysts and investigators required to sustain adequate standards. This situation leads to higher costs, but without a corresponding increase in return.

Case studies

The whitepaper presents a series of case studies showing how AI has supported AML efforts at financial institutions.

One case study describes how a top 10 global bank speeded up its AML investigations by 200 per cent while another describes how a large UK bank lowered false positives by 70 per cent.

A top 20 US bank used AI to conduct enhanced due diligence investigations 60 per cent faster.

Deploying AI

IBM’s view is that financial institutions are gaining value from cognitive AI solutions.

The whitepaper provides a checklist for those interest in deploying AI and gives reasons why organisations should act on AI now.

Fighting financial crime with AI can be found here.

Categories: Trade Based Financial crimes News

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