Money laundering fight increasingly goes high tech

A total of 57% of respondents among 852 participating AML compliance professionals and Association of Certified Anti-Money Laundering Specialists (Acams) members have either deployed AI/ML or plan to do so in the next 12 to 18 months.

“Despite one of the most difficult years on record, our survey found that AI and ML adoption is robust and growing,” said US software provider SAS which conducted the survey with Acams and accountants KPMG.

“Over a fifth (21%) of AML professionals are ahead of the curve and have already deployed AI and ML in their AML processes. 

“A significant minority (15%) are piloting AI and ML solutions and a further 21% plan on adopting the tech within the next two years,” SAS wrote in its conclusion to the Acceleration through adversity: the state of AI and machine learning adoption in AML compliance survey.

“More organisations than ever are using AI and ML to reduce false positives, ease caseloads, streamline reporting and save on operational costs …

“Covid-19 has been a powerful motivator for adoption, building on an already supportive regulatory environment. Continued disruption and resource constraints are likely to accelerate uptake even further.”

Coronavirus has led to rapid changes in customer circumstances and behaviour, exacerbating already heavy compliance caseloads for banks, the report said.

Its conclusion noted: “Reducing the cost of compliance is a strong consideration, but it’s the improved accuracy of decision [making] and the automation of repetitive tasks that makes adoption the logical choice … adopters are already experiencing substantial cost and efficiency improvements.”

SAS also commented that while fraud practitioners have utilised AI and ML technologies for decades, the AML industry has been slow to change “plagued by high false positive rates and manual processes intended to meet the letter and spirit of regulatory expectations”.

The report pointed out the sums spent on compliance are huge: in the US alone banks spend $25bn (€21.2bn) a year on meeting AML regulations.