Global businesses are now identified through a North American Industry Classification System (NAICS) code, replacing the Standard Industrial Classification (SIC) system codes in 1997. NAICS codes are reviewed and updated every five years. The NAICS separates entities and businesses into industries based on relationships in their processes. Currently, there are 20 sectors and 1,057 industries.
Available AI solutions analyze NAICS codes for CB customers and compares the focal entity and counter parties of an alert to similar entities in transactional data that share common NAICS codes. The resulting AI analysis reports if the transaction makes sense from a valid economic purpose perspective, and if the entities are engaged in complementary lines of business.
In the graphic shown below, an AI agent was utilized to examine several months of CB transactional data after NAICS codes were matched to the entities. The AI agent reported expected and normal economic transactions which were graphically depicted by lines of varying widths based on statistics of prior similar transactions. Additionally, the AI agent reported the analysis in a table format with related transactional risk scores for each entity.
A new report by Aite-Novarica (Aite) examines what’s driving transformation in anti-money laundering (AML) compliance. Specifically, the impact report examines the current AML ecosystem, key trends impacting financial institutions (FIs) and their AML compliance functions, and how they invest in technology and innovation to tackle today’s ever-evolving risk landscape.
As AI makes it possible for anti-money laundering (AML) processes to become increasingly automated, efficient, and effective, rules-based transaction monitoring systems (TMS) are being supplemented with these solutions to drive down false positives, streamline...
With an eye on what’s next for AML, we recently connected with Ken Harvey, former COO/CIO of HSBC Holdings, who outlined eight technology megatrends that are impacting AML compliance. We also look at how AML compliance technology is being developed, advanced, and...