Wayne, PA (June 7, 2017) – QuantaVerse, innovator of data science and artificial intelligence (AI) solutions purpose-built for identifying financial crimes, today announced an analysis that financial institutions can use to test the effectiveness of their AML programs. The CCO (Chief Compliance Officer) Checkup is a service whereby QuantaVerse’s AI solution will analyze transaction data to detect “false negatives” or anomalous behaviors that may have been missed by an institution’s existing transaction monitoring system (TMS).
These risks take the form of fines, penalties and forfeitures for violations of BSA and other regulations. Despite increased investments in AML systems, this risk is increasing year over year. In 2016 alone, $42 billion in fines for AML non-compliance were paid to federal regulators by the largest North American and European financial institutions.
Transaction monitoring technology is essential for the maintenance of an effective AML program. However, transaction monitoring systems are failing to flag many transactions that represent serious risks for financial institutions. Legacy TMS are incomplete because they rely solely on rules-based engines. If a financial crime does not violate a stated rule, the TMS won’t flag it. Unlike static rules-based TM engines, AI-enhanced systems are dynamic in that they can detect patterns of behavior and analyze the intent of those patterns to identify suspicious activities.
The QuantaVerse solution also provides financial institutions with a virtuous feedback loop that improves performance of their TMS by recommending new rules for catching new criminal behavior patterns that are uncovered during AI analysis. This provides financial intuitions with documented guidance on TMS rule scenarios and model tuning and drives continuous improvement of their AML efforts over time.
Financial institutions can take full advantage of QuantaVerse’s CCO Checkup with minimal effort and no long-term commitment. Included in the CCO Checkup, participating financial institutions receive a QuantaVerse Financial Crimes Report (FCR) detailing the five cases scored highest by the AI solution and representing the greatest risk to the institution. The QuantaVerse FCR also includes all the supporting documentation necessary for the case to be efficiently analyzed by an AML investigator and all that is required for a suspicious activity report (SAR) to be created if indicated.
In one CCO Checkup, the analysis of a single month’s worth of previously unflagged transaction data detected thousands of end-clients who had originated suspicious transactions, representing tens of millions of dollars of likely illicit cash flows. One end client, in particular, generated suspicious transactions totaling millions of dollars that were worthy of closer examination.
“Money laundering continues to be a serious problem for banks. Fortunately, advancements in AI and machine learning technologies promise to greatly reduce the risk these transactions represent,” explains David McLaughlin, CEO and Founder of QuantaVerse. “Our CCO Checkup provides financial institutions a fast method to evaluate an AI-powered solution, while also dramatically lowering BSA risks. They will see first-hand how AI can easily improve upon the effectiveness of their existing TMS and AML processes while greatly reducing their exposure to fines and reputational damage.”
QuantaVerse is the emerging leader in data science-powered risk reduction solutions, purpose-built for identifying financial crimes. Utilizing proprietary data science algorithms including artificial intelligence (AI), machine learning and big data technologies, QuantaVerse integrates and filters institutional data and related external data – including public Internet data, unstructured deep web data, as well as government and commercial datasets – to significantly improve AML, KYC and BSA compliance and prevent money laundering and the crimes it supports. For more information, contact QuantaVerse at (610) 465-7320 or visit www.QuantaVerse.net.
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.