The reprehensible crimes of human trafficking and human smuggling continue to be a growing concern across the globe. There is a heavy reliance on local, state, federal, and international law enforcement agencies in fighting these problems, but in reality, financial institutions (FIs) and data science companies are equal partners in the global fight against human trafficking and human smuggling. FIs face perceived insurmountable challenges daily in analyzing thousands of transactions while trying to detect, investigate, and report suspected transactions related to human trafficking and smuggling, and other criminal activities. However, new artificial intelligence (AI)- enhanced data science solutions are available to supplement existing FI transaction monitoring (TM) systems. AI solutions can provide tactical and surgical analytical answers to the human trafficking/smuggling problem. The AI-enhanced machine learning (ML) component can ultimately provide FIs with a strategic solution to assist in predicting where new and undetected human trafficking/smuggling activity might occur in their institution.
Human trafficking and human smuggling organizations generate enormous profits for transnational criminal organizations (TCOs). That money has be to laundered through various local, regional, national, and global banks for the TCOs to be operationally effective and profitable. According to data from the United Nations Office on Drugs and Crime(UNODC), human smuggling of migrants from the Africa Regions to Europe, and South America to North America, generates approximately $6.75 billion in revenue. The Africa Regions to Europe smuggling routes alone raises about $150 million. The UNODC also documented that the average cost of smuggling one migrant ranges from $2,000 to $10,000. Consider the reported three million migrants per year that are estimated to be smuggled into the United States per year from South America, and one can understand the magnitude of the cash generated.
Human trafficking is different than human smuggling because traffickers exploit the migrants by placing them into the sex trade, forced labor, or domestic servitude. Human trafficking, like smuggling, generates enormous profits for TCOs. The UNODC estimates that human trafficking generates approximately $3 billion per year for European trafficking groups alone. Unfortunately, one in five human trafficking victims are children. Exemplifying the magnitude of the human trafficking problem, victims from at least 127 countries have been exploited.
Government and law enforcement agencies can’t solve this problem on their own. FIs need to bolster their systems to target human trafficking and human smuggling money laundering typologies. AI is uniquely situated to target the complex many to one, one to many, and funnel account typologies that dominate the trafficking the underworld of the TCOs’ financial infrastructure. AI solutions can assist AI to identify inter-related institutional accounts, cross-border accounts, and alternative funding mechanisms that the TCOs might be using in the trafficking and smuggling endeavors. Data science companies are poised to help FIs win the fight against human trafficking and human smugglers.
A key part of the role of Chief Compliance Officer is satisfying both regulatory guidelines and the regulators that monitor their programs. That has meant staying the course with an AML program that checked regulatory boxes even if outcomes were less than effective....
Financial institutions have for years banked on rules-based transaction monitoring systems (TMS) to root out money laundering and other financial crimes only to be served up false positives that result in paralyzing inefficiencies and runaway costs. Although an...
False positives caused by Volume and Value (V&V) calculations violating a rule or a threshold are a significant cause for concern among anti-money laundering (AML) teams. According to industry estimates, close to 50% of the alerts generated by transaction...