Home Artificial Intelligence Pandemic spurs banks’ AI adoption for AML

A third of financial institutions are accelerating their AI and machine learning (ML) adoption for anti-money laundering (AML) technology in response to COVID-19. Meanwhile, another 39% of compliance professionals said their AI/ML adoption plans will continue unabated, despite the pandemic’s disruption. These industry trends and others are explored in a new AML technology study by SAS, KPMG and the Association of Certified Anti-Money Laundering Specialists (ACAMS).

The report, Acceleration Through Adversity: The State of AI and Machine Learning Adoption in Anti-Money Laundering Compliance, and a complementing survey data dashboard examine insights provided by more than 850 ACAMS members worldwide. ACAMS surveyed each about their employer organizations’ use of technology to detect money laundering, estimated in the range of 2% to 5% of global GDP – or US$800 billion to US$2 trillion – annually.

AI and ML have emerged as key technologies for compliance professionals as they look to streamline their AML compliance processes to fight financial crime and money laundering. More than half (57%) of respondents have either deployed AI/ML into their AML compliance processes, are piloting AI solutions or plan to implement them in the next 12-18 months.

“As regulators across the world increasingly judge financial institutions’ compliance efforts based on the effectiveness of the intelligence they provide to law enforcement, it’s no surprise 66% of respondents believe regulators want their institutions to leverage AI and machine learning,” said Kieran Beer, Chief Analyst and Director of Editorial Content at ACAMS. “While many in the anti-financial crime world – the regulators and financial institutions alike – are just coming up to speed on these advanced analytic technologies, there’s clearly shared hope that these tools will produce truly effective financial intelligence that catches the bad guys.”

It’s not just the largest financial institutions leading the charge on technology adoption either. Twenty-eight percent of large financial institutions, those with assets greater than $1 billion, consider themselves innovators and fast adopters of AI technology. However, encouragingly, 16% of smaller financial institutions (those valued below $1 billion) also view themselves as industry leaders in AI adoption.

“Seeing a strong percentage of smaller financial organizations label themselves industry leaders debunks the myth that advanced technological solutions beyond the reach of smaller financial organizations,” said Tom Keegan, Principal U.S. Solution Leader for Financial Crimes and America Forensic Technology Services, KPMG. “With both smaller and larger organizations subject to the same level of regulatory scrutiny, it’s important that these numbers continue to rise.”

Regardless of institution size, the pressure on banks to meet COVID-19’s disruption head on, while boosting accuracy and productivity, is the likely impetus to the industry’s accelerating use of advanced analytics for AML. The two primary drivers of AI and ML adoption, according to respondents, are to:

1) Improve the quality of investigations and regulatory filings (40%).
2) Reduce false positives and resulting operational costs (38%).

“The radical shift in consumer behavior sparked by the pandemic has forced many financial institutions to see that static, rules-based monitoring strategies simply aren’t as accurate or adaptive as behavioral decisioning systems,” said David Stewart, Director of Financial Crimes and Compliance at SAS. “AI and ML technologies are dynamic by nature, able to intelligently adapt to market changes and emerging risks – and they can be integrated into existing compliance programs quickly, with minimal disruption. Early adopters are gaining significant efficiencies while helping their institutions comply with rising regulatory expectations.”

For more insight into the state of AI and ML adoption in AML compliance, check out the on-demand AML webinar, The Truth Revealed: Global Insights on the Adoption of AI in the Fight Against Money Laundering and Financial Crime.

About SAS
SAS is the leader in analytics. Through innovative software and services, SAS empowers and inspires customers around the world to transform data into intelligence. SAS gives you THE POWER TO KNOW®.

SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. Copyright © 2021 SAS Institute Inc. All rights reserved.

You may also like

logo-white

Your Trusted Source for Capital Markets & Related News

© 2024 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.