Fighting financial crime with AI: FIAU's vision for the future
As regulatory demands grow more complex, technology has become indispensable for ensuring compliance with anti-money laundering (AML) and counterfinancing of terrorism (CFT) regulations. The Financial Intelligence Analysis Unit (FIAU) advocates for advanced solutions like machine learning and AI to navigate the challenges of data analysis, transaction monitoring, and identity verification.
Adopting technological solutions to ensure adherence to one's obligations has become almost necessary as subject persons face increasing, and at times apparently conflicting, obligations. The FIAU has been a proponent of technology in AML/CFT, and it has been receiving considerable attention even at the European level through the work of the European Banking Authority. One example is the ever-increasing push for transactions to be carried out electronically and within the shortest time possible. In such a situation, the main challenges are twofold: how to analyse the ever-increasing volume of data and information to identify the transactions that need to be analysed in more detail and, potentially, be reported to the FIAU, and how to carry out the said analysis in a manner that does not influence negatively on consumer expectations.
The answer lies in adopting transaction monitoring systems that include machine learning and artificial intelligence elements. This allows for swifter and more accurate data analysis, as the software itself can detect patterns that may not be so easily identifiable by the human element. Monitoring parameters will also evolve to consider changes within a customer's activities and transactions, ensuring a more rapid response to alternations that may otherwise take quite some time to be highlighted.
This is just the latest aspect where technology can facilitate compliance. Earlier uses can be found across many aspects of AML/CFT. Screening software solutions are probably one of the earliest uses of technology in this area, allowing subject persons to access an increasing volume of adverse information through a single point. Increasingly diversified customer bases would require access to information from a broader range of sources. While the internet may be helpful in this regard, it does not come with a function to regularly screen one's customer base periodically.
Coupled with the aspect of adverse media is the need to have as accurate a risk understanding as possible of the ML/FT risks presented by one's customers and ensure that it is kept as up-to-date as possible. Software solutions in this area can be fed through screening solutions and transaction monitoring systems to ensure the risk assessment is always current. In addition, it also ensures that the risk assessment methodology is consistently applied.
Needless to say, technological solutions are also crucial for identity verification. As the world moves more online, services are more likely to be delivered over laptops, tablets, smartphones and smartwatches. The absence of a brick-and-mortar reality where business employees meet customers physically increases vulnerabilities associated with identity theft and forged documents. Hence, there is a need for software solutions that can identify forged or false documents and assess whether a prospective customer is a human person and whether the appearance coincides with that of the photograph on the identification document.
Technology is an ever-evolving reality, with each step in that evolution presenting an opportunity for new and swifter services.
However, these new opportunities are exploited not only by legitimate actors but also by illicit ones. And as the adage goes, one must fight fire with fire, which is why technology within the area of AML/CFT is here to stay and will play an ever-greater role in mitigating threats and ensuring compliance. It is always important to remember to use systems or software solutions calibrated to one's needs and realities, testing them occasionally to ensure they are working as they should be.
As regulatory demands grow more complex, technology has become indispensable for ensuring compliance with anti-money laundering (AML) and counterfinancing of terrorism (CFT) regulations. The Financial Intelligence Analysis Unit (FIAU) advocates for advanced solutions like machine learning and AI to navigate the challenges of data analysis, transaction monitoring, and identity verification.