Some of the key highlights from the discussion with anti-money laundering (AML) expert and Founder & CEO of QuantaVerse, David McLaughlin, include:
- Top Financial Crime Trends in 2017
- Cybersecurity and instances of cyberattacks, especially account takeovers and application fraud, were a major financial crime trend that spiked in 2017
- The industry is still suffering from bad results ($1 trillion in bribes, $2.5 trillion in money stolen and laundered through the financial system)
- The application of AI and machine learning into AML efforts was a trending topic in 2017
- Financial institutions are looking at how to improve efficiency and cutting costs while still reporting in a way that keeps regulators satisfied
- Individual accountability was ramped up on the enforcement equation with respect to FCPA and AML
- Top Issues to Tackle in 2018
- How to best operationalize AI and machine learning to fight financial crime within AML, audit, corruption and fraud efforts
- Some incorrectly view AI/machine learning as a black box; decisions that machine makes can be fully audited
- Regulators and legislators are starting to recognize that the existing capabilities of AML programs are ineffective
- In testimony to the U.S. Senate Committee on Banking, the president of The Clearing House said, “one of the most pressing needs in enhancing the U.S. regime is to enable financial institutions to innovate their AML programs…and AI and machine learning could revolutionize this area”
While this is debated, the problem persists as legacy AML technology such as transaction monitoring systems (TMS) have little to no ability to identify and assess risk created by shell companies. And while policies, procedures, and processes, if applied correctly, can protect financial institutions from becoming conduits for some fraction of money laundering, terrorist financing, and other financial crimes, identifying shell company risk continues to be elusive.
On the final day of the FIBA conference, QuantaVerse Founder and CEO, David McLaughlin, participated on the “Customer Profiling, Use of Innovative Technologies in Onboarding and Risk Assessment” panel. David Schwartz, President and CEO of FIBA, set up the panel discussion by emphasizing the importance and impact that innovative technologies have on risk assessment and the customer onboarding process.
CASE STUDY: AI-Powered Entity and Alert Adjudication Streamlines Financial Crime Investigation Processes
Based on these outcomes, the bank is moving QuantaVerse AI solutions into production. Moving forward, the bank will be better equipped to find hidden financial crime risk while automating 70 percent of its AML investigation processes, enabling investigators to focus their time and talents on the most complex cases.