Unlike many other kind of wrongdoings, in financial crime illicit transactions have an appearance of legitimacy, making them harder to spot. Money launderers, for instance, in the attempt to disguise the provenance of such profits, make several transactions in the legitimate financial system.
Recently, I outlined some of the most frequent situations AML officers face on daily basis and how to focus on unusual activities.
Whilst certainly not exhaustive, you can see that AML prevention is very much linked to the investigation of any unusual activity.
Very broad, isn’t it?
The issue is that there are no fixed schemes and wrongdoers ingenuity is limitless, which, needless to say, complicates compliance officers tasks, particularly if they are operating for a large organization.
By the anti-corruption viewpoint, things are not very different since off the books founds are often created by means of – apparently – legitimate operations.
Here you can read more about it Managing third parties corruption risks
Is Artificial Intelligence Useful then?
Yes, indeed. Amongst the others:
- Software don’t get bored or tired,
- Computers don’t make mistakes with numbers
Without questioning anyone’s ability, it is a fact that compliance can be a rather repetitive task; computers simply don’t have problems with that.
Can we leave compliance up to AI?
Not yet. AI is a great tool to manage incredible amount of data in no time but its use is not without risks.
Human mind is able to read between the lines, to go beyond numbers which is equally important in fighting financial crime.
That said, should AI overlook a sensitive account or transaction, your organization will still be held liable for that, that is why you need to plan in advance what AI can or cannot do.
Bearing in mind the links above, I would suggest to leave riskiest transactions/accounts to the compliance officers, leaving the routine to AI (under strict human supervision).
Using artificial intelligence will definitely improve the way how (large) organizations fight financial crime, particularly it all strengthen the KYC process, however, it shall not be used in lieu of well trained compliance professionals.