Utilizing Data Science and Artificial Intelligence to “Tune-Up” Bank Compliance Programs

Much like homeowners who re-organize or clean their homes in the warmer months, it’s imperative for financial institutions (FIs) to give their compliance programs a tune-up as they make their way into a new business quarter. The compliance industry recognizes that approximately 95 percent of all transaction monitoring system (TMS) alerts are false positives. This is an alarming statistic that FIs deal with daily through increased personnel and IT costs, but the time has come […]

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Trade-based Money Laundering is No Match for Artificial Intelligence

Trade-based money laundering (TBML) is rapidly becoming a preferred method of money laundering for transnational drug trafficking and terrorist organizations. Simply defined, TBML is the process by which criminal organizations utilize legitimate international trade to mask their criminal proceeds. They do so by selling counterfeit goods, falsifying trade documents, over/under invoicing and falsifying financial statements. TBML is effective for criminal groups because trade finance is document-intensive, requiring financial institutions (FIs) to expend significant effort to […]

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Artificial Intelligence Can Reduce Money Laundering Risk Related to Shell Companies

It wasn’t until after the Panama Papers were released that shell corporations (“shells”) gained their high level of notoriety. The Panama Papers revealed Mossack Fonseca’s activities in which the law firm was linked to numerous shell companies owned by politically exposed persons (PEPs) and other noteworthy clients. Notoriety or not, shell companies represent the highest risk customers and present many challenges for financial institutions’ (FIs) KYC and CDD efforts.  Money launderers, fraudsters, and other financial […]

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Data Science and Artificial Intelligence Enhance Correspondent Banking Transaction Monitoring

Two key challenges within large banks for transaction monitoring investigations include establishing an economic purpose and verifying complementary lines of business for correspondent banking (CB) customers. Banks often find themselves filing conservative suspicious activity/transaction reports (SARs) because the necessary data is unavailable. Fortunately, data science and artificial intelligence (AI) solutions are available to assist banks in verifying business relationships for CB customers. Global businesses are now identified through a North American Industry Classification System (NAICS) […]

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Artificial Intelligence Can Improve Financial Institutions’ Counter-Terrorist Financing Detection and Reporting

The combatting of terrorist financing (CTF) is a prime concern for global financial institutions’ (FI) which serve as a front-line defense mechanism for local, state, federal, and international law enforcement and intelligence agencies. Terrorist attacks have evolved from large complex attacks to smaller ones perpetrated by one to two attackers, often from the same country where the attack occurs.   Another dynamic that FIs have had to adapt for is the foreign fighter typology where citizens […]

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