Numerous applications for AI within AML programs

by Ray Birch, CUtoday.info

A number of financial institutions, particularly major banks, are turning to artificial intelligence (AI) to help them with their anti-money laundering (AML) programs.

The institutions are leveraging AI not only to improve how they sift through AML alerts to stay abreast of the latest threats, but are also using AI to make Suspicious Activity Report (SAR) submissions streamlined and faster, according to Aite Group. The banks, some of which are now in pilot tests, are also using AI to catch money laundering incidents and block them as they occur. Typically, the majority of money laundering incidents are discovered well after the transaction has been completed.

The moves come at a time when regulators are placing stricter rules on FIs, expecting them to not only catch but prevent more money laundering incidents. New customer due diligence rules are in place. In 2017, federal and state regulators stepped up AML enforcement, for example, and Citibank paid a $70-million penalty to the Office of the Comptroller of the Currency for violating its 2012 consent order relating to Bank Secrecy Act and AML deficiencies. Merrill Lynch paid $26 million, half to the Securities and Exchange Commission and half to the Financial Industry Regulatory Authority, for failing to detect and report suspicious banking activity involving billions of dollars in transactions.

 

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